News Focus: Post - Big businesses welcome Royal Mail's PiP plans

by Melanie May, Direct Response 26-May-06

Most of the UK's top 1000 firms believe Pricing in Proportion (PiP) will have a beneficial effect on direct mail by encouraging better targeting and lower volumes, new research shows.

PiP comes in on August 21. Under the new pricing structure, light bulky items, such as poster tubes and large sized cards, will be more expensive to post, while small but heavy items, such as books and DVDs, will cost less.

While the changes have met with criticism from some in the industry who believe they will stifle creativity, Royal Mail's expectation is that two-thirds of business mail will be unaffected. Research from mail communications firm Corporate Mailing Matters (CMM) supports this, revealing that two-thirds of the UK's top 1000 firms believe PiP will result in better targeting of direct mail.

CMM said the move to lower volumes has already begun, with marketers increasingly focusing on aligning customer value and the uplift in response that better targeted and more creative mailings can bring.

"As organisations look to identify, understand and grow the value of each customer, our research indicates that marketers are to alter the size and format of direct mail according to customer value over the next two years in reaction to this," said Yolanda Noble, CMM chief executive.

"Consequently, PiP may be viewed as a positive influence on the industry, encouraging further advances in direct mail targeting."

See feature, page 39.