Magazine article Marketing

The Letterbox Revolution

Magazine article Marketing

The Letterbox Revolution

Article excerpt

Ken Gofton attended the UKDirect convention in Jersey this month which saw an exchange of views and experience across the DM sector. Here he looks at how the Post Office is limbering up for a taste of competition

For most of us, the cost of posting a letter isn't a big issue - it's somewhere around the price of a daily newspaper. We may not even be sure of what first-class and second-class costs these days, still less what the discounts may be for high-volume direct mail.

But, when the Post Office starts a fundamental review of the way it charges for the mail, we should take notice. Even for those on the fringe of direct marketing, it can affect the choice between different media in integrated campaigns. For the committed, it's a major issue.

The Royal Mail is heading for a shake-up, and knows it. Increased competition is a certainty. The Post Office needs the kind of make over that transformed BT from sleepy state monopoly to astute commercial operator.

Direct mail is massively important to the Post Office. It is a [pounds]1.5bn sector and the fastest growing part of the market. This is why marketing director Jim Cotton-Betteridge was at the second UK Direct convention, held in Jersey.

Monopoly end-game

"There is no question that our monopoly will go overtime," Cotton-Betteridge said. "It is only a question of when. The European Union intends to deregulate the industry in 2003, and it is not impossible that it could happen sooner.

"But that is not the primary motivator for this review. We are trying to give as good a deal to business as we can, within the Government-set revenue targets. It is a total revenue package, which means that if someone gets a better deal, someone else gets a worse one.

"The only way we can give a better discount to direct mail is to demonstrate that it will generate additional revenue or cost savings."

Almost anything seems to be up for discussion, from the simple but sweeping to the deeply technical. The DM industry, for instance, has been lobbying for direct mail pricing to be divorced from what the public pays - that is, not expressed as a percentage of the consumer rates.

Details of two new services to encourage small- and medium-sized companies to make more use of direct mail will be revealed next month, according to Cotton-Betteridge. …

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