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Pricing In Proportion – Your Verdict July 3, 2007

Posted by liverpoolchamber in British Chambers of Commerce, Business, News, Surveys.

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A survey undertaken by the British Chambers of Commerce has discovered that Royal Mail’s Pricing in Proportion (PiP) initiative has led to an increase in costs for businesses.

Pricing in Proportion was introduced by Royal Mail to better reflect the costs involved in handling different sized pieces of mail  in what was claimed  to be a revenue neutral exercise.

For business however the impact of the change has not been revenue neutral.  The BCC survey discovered that:

  • 60 per cent of businesses have seen their costs rise since PiP was introduced.
  • 64 per cent of businesses say that they have  had to  change or adapt the size of their mail
  • 84 per cent of businesses feel that PiP has not simplified the way that their mail is priced.
  • Less than 1 per cent of businesses feel that there has been any improvement made.

Instead of simplifying the postal service the changes have increased costs for Small and Medium sized businesses and seen no corresponding improvement in service.

Liverpool Chamber contacted Royal Mail with this information, they replied: ‘The Pricing in Proportion changes were set to be revenue-neutral for Royal Mail and there is no evidence to show businesses overall have been disadvantaged especially as two thirds of business letters and packets cost less postage after the changes took effect last August and a further 20% of business mail stayed at the same price.

‘As always, customers can get help and advice from their account manager or sales team. Peter Tyrer is the Royal Mail New Business Manager for Cheshire & Merseyside his contact details are 07834 259 375 or email peter.tyrer@royalmail.com. Alternatively customers can visit the Pricing in Proportion section of our website at www.royalmail.com.’



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