Tuesday, 25 September 2007


by Bertrand Boer-Waugh

Metapost (n): A post about the post.

Royal Mail, and the Post Office (as public face of the once-great Royal Mail), appear to be playing a dangerous game with its brand. First, deliveries become unreliable. Second, it stops Sunday collections from its letterboxes. In other words, the cost-cutting that is necessary for it comes from cutting its service rather than dealing with its problems with the unions and its striking workforces. Not content with that, they appear now to be using this to increase revenue.

It used to be that if you went in to the Post Office at 2:30pm to post something first class, it was pretty much guaranteed to get there the next day. Now, it seems far less likely to get there the next day. The question I am left asking myself is whether or not this is intentional on their part.

A number of times now, I have been in the post office about that time. Each time, they have been asking the same question: "do you want to pay for special delivery so that it gets there tomorrow?" The cost of special delivery is three times the cost of standard first class. I can see the strength of them making money through offering additional services such as loans and insurance - they have an expensive branch network to maintain (even if the rural post office is increasingly becoming either a thing of the past or a weekly visit). But offering people a service upgrade at three times the cost? This can only mean one of two things: firstly, the service that used to be reliable is now not reliable and so they will charge more for it, or secondly they are selling a more expensive service that people don't actually need. Either way, they don't come out of it well.

This raises an interesting question from a strategic point of view. Yes, the internet means that people are sending letters less and less. But companies that respond to a decline in their market (particularly one arising from an external threat) by increasing the cost of their service frequently find it to be the nail in the coffin. It is a grave mistake. If the rise in e-business teaches us anything, it is that you find a way to make your service cheaper (if not free) and proliferate usage of it. Imagine if google had charged you a penny for every search. It would have cost even a prolific searcher only about £3 per month, but the psychological barrier would have reduced our search (and therefore their modern business) dramatically.

There are all sorts of ways that they could do that. Offer a monthly fee to guarantee no leaflets through the door, for example. But raising the price on us (and making the service seem unreliable and expensive) will kill it. Competition aside, we have plenty of alternatives to snail mail for the bulk of our communications. What they should be doing, rather than competing for a greater share of our existing communications, or charging us more for the communications that we choose to (or have to) post, is exploring ways to make the post cheap enough to use without thinking and then finding new ways to make us communicate through the post more.


Charles Pooter said...

Great first article Bertrand!

Welcome to Little Man, What Now?

Edwin Hesselthwite said...

Excellent Stuff Bertrand... Welcome to the disciples of Adam Hawks, we'll be sending you the complementary hat and pipe in the post.

And also, you've brought us to the edge of cracking 60 RSS, fantastic stuff. We've been loitering around the mid 50s and high 40s for the last 2 weeks, what we needed was fresh blood.

Bertrand Boer-Waugh said...

[gush gush] thank you chaps. In celebration I look forward to enjoying a nice shag - in the pipe you're sending, that is...