Royal Mail Prices 2023: 6 Tips for Unlocking Discounts
In 2022, Royal Mail prices increased across the board – by 10p for a first class stamp to 95p, and by 2p to 68p for a second class stamp – and certain products rise again in January and March 2023.
The state of the UK economy is forcing businesses to search for ways to improve operational efficiencies, in all parts of their organisation. While postage prices can seem small to some, for those who use print and mail as part of their customer communications channel mix, the costs can stack up.
Fortunately, it‘s possible for organisations to get better prices with a postal optimisation drive. There are multiple Royal Mail products that offer bulk mail users significant discounts when applied correctly.
With that in mind, it’s also possible to improve postal optimisation even further with print and mail providers that have access to a C9 licence, which enables them to offer postal optimisation on bulk mail sent through Royal Mail. They can drive savings further by recommending the right mix of Royal Mail products, based on a number of criteria including volume, location and type of mail.
In this article we will give you tips on what to look for and how to make savings across the whole print and mail journey.
For the fundamentals of postal optimisation, see our article Postal Optimisation in a Digital World.
- Conduct a postal audit
- Pay attention to document composition
- Reduce size and weight where possible
- Find the right product for each letter
- Partner with a service provider
- Keep an eye on Royal Mail incentives
1. Conduct a postal audit / review
In the quest for operational efficiencies, a good place to start is with your customer communications. There are ways for organisations to get better prices for their postage.
It’s not simply a choice of first or second class post. Many are unaware that there are multiple products with different pricing depending on what they are sending, the volume they are sending, where it’s going and how quickly it needs to get there.
First, to get a clear picture of exactly where you can make savings without compromising on service, we recommend conducting a postal audit/review . This will give you an objective overview of every step of the print and mail process, so you can identify the quick wins and the deeper improvements.
The typical postal journey looks like this:
- Document Composition
- Data Processing
2. Pay attention to document composition
Paying attention to the composition of your documents will help you with your response rates, which will reduce the need for more mail, and save on unnecessary postage. The first few seconds when a customer opens a letter are critical to catching their attention. Are you placing the most important information in the right areas, or burying it in dense text?
It’s in the interest of Royal Mail for printed communications to be effective so that customers keep using their services. They offer rewards to customers who trial new ways of using post by redesigning their document composition, which is why a CDA (customer direct agreement) is very useful.
We talk about the benefits of partnering with CDA holders further down in this article. Go there now.
3. Reduce size and weight where possible
Royal Mail charges by weight, so we suggest you look at ways of reducing the amount of paper in each item. For example, evaluate whether an insert could be replaced as an onsert (extra information printed onto the letter itself), and reduce holding stock and extra printing.
If your inserts contain large amounts of information, e.g. terms and conditions booklets, you could simply add a URL, a barcode or a QR code that takes readers to a digitised version on your website.
4. Find the right product for each letter
Are you using the right Royal Mail products for your post?
Understanding the content of your documents and sorting them to fit with the appropriate rate can bring significant savings. If you are sending all of your post through one product, you could be missing out on more economical postage.
For example, sending your direct mail via Advertising Mail is cheaper than Business Mail. And if some of your documents are less urgent than others, you can separate and send them via an economy service, such as second class or Mailmark Economy.
5. Partner with a service provider
There are two main ways a CDA holder can reduce mail costs.
- There are discounted prices only they have access to
- Their volumes are high enough to unlock Royal Mail bulk discounts
For the very best prices, a specialist partner with a CDA can take on responsibility for the postal journey up to the “final mile”, which is covered by Royal Mail staff.
Print and mail service providers use a form of arbitrage to compile multiple clients’ post in bulk. As far as Royal Mail are concerned, the post is all from one client (the service provider) and the higher the volume, the better the discounts.
A specialist service provider will have a close relationship with Royal Mail and be involved in all developments in the postal industry.
At Adare SEC, we are board members of all the key postal industry bodies so we are able to advise clients in advance of all developments that could influence their business. Since we have a CDA that means we have a direct relationship with Royal Mail, and are able to influence policy in the interests of our customers.
Though tempting to try and achieve these discounts in-house, earning a CDA with Royal Mail is simply not realistic for most organisations. To qualify, you need to be sending at least 6 million items a year in the post.
Even if that is achievable, that volume of mail requires infrastructure such as multiple printers, warehousing, data processing, composition software and sorting staff. It all comes with maintenance and real estate costs, not to mention the energy bills.
See our article on what to look for in a print and mail provider.
6. Keep an eye on Royal Mail incentives
As there are various ways that postage is charged and discounted, and volumes change day to day, there are always new ways to save.
Royal Mail is constantly testing and innovating their products, which means print and mail service providers should always be updating their best practice in order to get the best ROI for clients.
Royal Mail offers incentives – promotions that encourage the use of mail, while offering opportunities to optimise postage prices. A good service provider will keep an eye on these incentives to make sure customers are getting the best prices.
For a glossary of postal operator terms, see our Glossary of Print & Mail Terms.