UK SMEs ‘fear the impact’ of today’s Postal Rate Change

Following the Royal Mail’s rate change announcement at the end of last month, it appears that four in five (81 percent) of Britain’s SMEs, believe that today’s postal rate change will have a negative impact on their business. Of these, seven percent say that they fear their business may not survive the threat.

National research conducted among 1,000 SMEs by Pitney Bowes found that 15 percent said they’d consider moving to a franking machine to avoid the price hike. However, with first class stamps rocketing by 30 percent, almost half (45 percent) of the SMEs surveyed claimed that they will be sending less post, or changing how they communicate and using email to compensate for the lack of postal communications. Finally, 25 percent said that they would start using second class post more frequently.

The research also revealed that many SMEs were entirely unaware of the changes. Almost three quarters (69 percent) of those polled said that advance information provided to them was ‘poor and confusing,’ and they were not aware that the changes would be so significant. Alarmingly, 17 percent admitted that they didn’t know where to go for more information on the subject.

Phil Hutchison, marketing director of Pitney Bowes UK, said “The Royal Mail’s announcement is inevitably going to have an effect on Britain’s SMEs. One in two (50 percent) SMEs with between 101 and 200 employees fear that the postal rate change will have a ‘big impact’ on their businesses, forcing them to change the way that they communicate with customers or even worse put their business under threat.

“However, it’s important that businesses don’t panic and abandon physical mail in a bid to avoid high postage rates; physical mail still has an important part to play. Successful customer communications depend on a delicate balance of message, medium and timing. Although digital communications undoubtedly have their place, traditional print campaigns are still critical for most businesses and are likely to remain so for many years to come.”

Pitney Bowes is urging SMEs to take the opportunity to review their entire communications strategy, and for physical mail encouraging business to consider a move to metered mail, which can cut costs. In addition to time and money savings, metered mail also delivers a range of benefits such as better ‘open rates’ and presents a more professional image to customers, as well as enabling users to access a range of other bulk mailing discounts.

Alternatively, those that want to stick with stamps can often make savings by folding documents into letter format, which for first class can reduce costs from 90p to 60p and from 69p to 50p for second class.

Pitney Bowes has published comprehensive advice online at www.ratechange.co.uk as well as offering specific product options suitable for small and micro businesses.

The latest findings from the Sage UK Omnibus – a poll of 1,200 small business owners from its UK customer base - revealed that just under two-thirds of respondents (62 percent) expect the price change will increase their business’ delivery and logistics costs. A further 10 percent predict a significant impact on their business

The survey also revealed the extent that SMEs rely on the Royal Mail - 85 percent of all SMEs use Royal Mail for business purposes with more than half (51 percent) sending invoices and business correspondence by post every day.

According to Sage, if a business is sending 10 invoices by first class post each day they will be paying an additional £338 due to the price increase. A switch to e-invoicing could save them over £1,000 a year.