How do I offset the cost of the Royal Mail price increase?

What matters for businesses is that an increased postage rate does not mean the same rise in your campaign's total cost.

Many factors other than postage affect a campaign's total cost. Data quality, the format you select, the type of paper, the postage category, and the production and fulfilment processes can all have an impact. Reviewing these aspects before your next campaign could reduce costs and offset some, or even all, of the rise.

If you have campaigns planned for the coming months, review your mailing arrangements now and speak to your provider about the options available before the new rates take effect. When you talk to your provider about rates, you should try to negotiate. Ask whether your volumes qualify for different rates, whether changing your mailing schedule could reduce costs, and whether there are any commercial terms available that are not shown in standard pricing. If you are considering a longer-term arrangement, check what volume commitments or other conditions would apply. Also confirm collection dates, deadlines and any additional charges so you know exactly what you will be paying. A straightforward conversation about your planned campaigns may uncover options that are not immediately obvious from the published rates.

We don't want to adopt a single drastic measure to reduce costs; instead, we should review the entire campaign from start to finish and identify where we can eliminate unnecessary costs.

Data cleanse

Why cleaning data saves you money

Although you can't lower the price you pay for postage, you can cut back on what you spend when you send mail to wrong or out-of-date addresses.

Poor data quality can accumulate over time. According to DataIQ research cited by Royal Mail, bad data quality can cost businesses as much as 6% of their annual turnover. Royal Mail also mentions that data can become outdated because people move, businesses close, and customer details change.

You will have to pay for printing, handling and postage if you keep sending out obsolete records, even if the person or business you intended to contact never receives them.

Before your campaign goes to print, review your mailing data and remove records that are no longer accurate or useful. A quarterly check is a sensible starting point, although larger campaigns may justify a review before each mailing. Look for duplicate records, incomplete addresses and contacts who have moved or are no longer suitable for the campaign.

Address verification and change-of-address services can help identify records that need attention. Royal Mail and other providers also offer data cleansing services to improve your database's accuracy. If you manage your data internally, your CRM system or spreadsheet software may also catch common errors.

The key is to make data checking part of your normal campaign process, not something you do only when a problem appears. Clean data means fewer wasted mailings and a better chance of your campaign reaching the people you actually want to reach.

The key issue isn't the extra cost of posting each item; it's whether every item you pay to produce and send has a good chance of reaching the right person.

How long ago did you last carry out a proper review of your mailing data?

Review your format

Less can sometimes be more

Just because a mailing has more pages doesn't mean that it becomes more effective.

You could cut printing and paper use by eliminating pages in your campaign that add little to the main message, making the communication easier to read. Moreover, a simpler format would also help ensure that the final product stays within the requirements of a given postage category.

This also applies to the paper used. Switching from 120gsm to 100gsm will reduce material use without making any noticeable difference to the final mailing. The actual amount saved will vary depending on your printer, paper supplier, order quantity, and the specifications you use, but for several thousand pieces, even a small decrease in cost per item can amount to significant savings. For instance, if the lower paper weight saves you just 2p per item, a mailing of 1,000 pieces would save £20; if your mailings consist of 5,000 items, the total saving could be £100 per campaign. This simple switch can quickly add up over a number of campaigns during the year.

The savings on each item may be small, but when thousands of items are involved, minor production efficiencies can add up.

Before you remove any content or substitute paper stock, check the effect on the final mailing, especially its weight and size. A change that moves an item into a different postage category might cost more than the paper savings.

Look at your mailing format

Can your Large Letter become a Letter?

A major opportunity lies in examining the physical format of your mailings.

To show just how much the format can influence the cost of postage, the current published 2nd Class rate for a Letter weighing up to 100g with Royal Mail is 91 pence, whereas the rate for a Large Letter weighing up to 100g is £1.55. The difference is therefore 64 pence per item. Again, these are the 2nd Class prices set out by Royal Mail, not the DSA rates, but they illustrate why the size, thickness, and weight of a posting matter.

A Royal Mail letter can be up to 240mm × 165mm × 5mm and weigh up to 100g; if the completed item exceeds any of these limits, you may need to send it in an alternative format.

So it is not enough for the item to weigh under 100g; the dimensions and thickness also matter.

A redesign can sometimes make a big difference. For example, reducing the finished size, using fewer pages, altering the way it folds or modifying the method of construction could get the mail within the specifications for a Letter.

To illustrate, a difference of 64p for 10,000 items would amount to £6,400 before considering other costs or any mailing rates that may apply.

The amount you save will vary depending on the service and rates you choose, so check the final dimensions and weight before deciding on the print specification.

Review the cost of doing it yourself

Could sending your mail via an external company increase efficiency?

The cost of running a mailing campaign includes postage.

If you run your campaigns yourself, you may also have to pay for printing, data preparation, addressing, folding, inserting, sorting, equipment, storage, staff time, and handling returned or undeliverable mail.

Some of these costs appear on an invoice, while the rest are included in the working day and are therefore much harder to spot.

A specialist mail house can combine printing, fulfilling, and mailing into a single process and achieve efficiencies that are hard to obtain on its own. For a given campaign size and specification, outsourcing can lower the total cost per item rather than just adding another supplier.

If you are considering outsourcing your mailing, look beyond the headline price when comparing providers. Ask about their experience with campaigns similar to yours and look for genuine case studies or customer references where available. Make sure the quotation clearly sets out what is included, including production, fulfilment, postage and any additional charges.

Also check turnaround times, especially if your campaign has a fixed collection date or a tight deadline. You should also be comfortable with how the provider handles your data and find out what systems and processes they have in place to keep it secure and accurate.

Finally, think about how well the provider can adapt to your requirements. Can they handle your usual volumes, work with different formats and accommodate changes when a campaign does not go exactly to plan? A provider that understands your requirements, communicates clearly and gives you a transparent view of the total cost may provide greater value than simply choosing the lowest quote.

For example, suppose you handle a 5,000-piece campaign in-house. In that case, you could spend £1,200 on printing, £800 on staff time, £300 on materials and £4,550 on postage. The total would be £6,850, or £1.37 per item.

An overseas campaign could be very different indeed. In this case, if printing and fulfilment cost £1,150 and postage £4,250, the total would be £5,400, or £1.08 per item.

These figures are not typical but illustrate market rates, since actual costs will vary by campaign. The advantage of the calculation is that it lets you compare the total cost of handling the mailing yourself with the cost of having a specialist produce and fulfil it.

The lowest rate does not mean the lowest total campaign cost.

Look at the campaign as a whole

Small savings can add up

No single solution applies to every mailing campaign.

For one company, the biggest opportunity may be removing outdated addresses. For another company, it might be reducing the number of pages or changing the final format. With a bigger campaign, changing the format might have a more obvious impact on the total cost.

What matters is more than the rise in postage.

For example, imagine a campaign where you can:

• Eliminate the addresses that are no longer valid for mailing.
• Use less paper.
• Simplify the finished format.
• Make sure the item stays within the limits of a lower postage category.
• Reduce internal handling and processing time.
• Have a specialist mailing service handle the production and fulfilment.

These changes shouldn't affect the campaign, since some will make the mailing more efficient while improving the recipient experience.

The outcome doesn't have to be a single major saving; it's simply a matter of spotting a number of smaller costs that you can cut down before they accumulate.