Uncertainty over postage costs hampers direct mail campaigns, agency warns

Nick Pride of DMS says fundraisers won't hear new prices until the end of February

Nick Pride
Nick Pride

Uncertainty over how much the cost of postage will rise in April is making it difficult for fundraisers to plan direct mail campaigns, a direct marketing agency has warned.

Nick Pride, managing director of the agency DMS, which puts together direct marketing campaigns for 19 charities, said he had been told by Royal Mail that the cost of stamps would be increasing in April, but it would not be able to say by how much until late February.

"Postage accounts for about a third of the cost of a direct mail campaign," said Pride. "So the cost of it can make a big difference to the type of campaign you do, the volume you can mail or the number of donors you can recruit in that channel.

"I understand the position of the Royal Mail, but it makes it very difficult to plan things, in an environment where all our costs are rising and it’s increasingly difficult to acquire and retain donors."

As well as dealing with this change, said Pride, fundraisers would have to start planning for the fact that many types of postal service, including bulk mail, would be subject to VAT from April.

A spokesman for the Royal Mail said that it had written to customers letting them know it would be changing prices of a number of services. "No final decision has yet been made on the prices," he said.

"For business mail this decision will be made in late February and for universal service prices it will be in mid-late March. Our intention is that these changes will come into effect in April, subject to Ofcom’s final consultation decision on the new regulatory framework for postal services."

The spokesman said this consultation included proposals that could affect the price changes, such as a proposal to put a price cap of 55p on second class stamps.

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