Royal Mail plots payment by results offer

Royal Mail is planning a payment-by-results price offer as one of several measures aimed at ensuring direct mail stays competitive with other media channels in the wake of recent price hikes.

Royal Mail

The postal operator is considering a “risk reward” price that could be offered to some clients to boost take-up.

Details of the strategy are still being worked out but it could mean that charities would pay according to how many new donors they attract or car dealers on the basis of new cars sold.

Royal Mail media director Mark Thompson says the offer would be a “real statement of intent” to marketers considering using direct mail for the first time or returning to the channel.

He adds that as a media owner, the Royal Mail needs to promote direct mail use over or integrated with other media channels.

News of the plan comes as Royal Mail announced that prices for higher volume business packet and mail services will increase by an average of 10% from 9 May.

However, the postal operator has launched a product called Advertising Mail that will mean some regular users of direct mail will be charged just 2% more, below the rate of inflation.

Royal Mail is also looking at offering data and DM service “bundles”. Data offerings could include using the redirection of mail data provided by consumers to generate leads for brands.

Thompson adds: “It is about convenience but also addressing a lack of understanding about data.”

The Postal Services Bill, which will allow private companies to buy up to 90% of the Royal Mail, is with The House of Lords.

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