BACK TO BUSINESS FROM ROYAL MAIL JANUARY MARCH
BACK TO BUSINESS FROM ROYAL MAIL JANUARY – MARCH 2021 EXTENDING OUR INCENTIVE TO HELP GET BRITAIN BACK TO BUSINESS November 2020 MAIL IS REMEMBERED Classified: RMG – Internal MAIL STAYS IN THE HOME MAIL DELIVERS LASTING RESULTS MAIL REACHES EVERYONE MAIL IS TRUSTED
BACK TO BUSINESS Classified: RMG – Internal
THE JANUARY TO MARCH OFFER EXTENDING BACK TO BUSINESS INCENTIVE TO HELP YOUR BUSINESS We have extended our Back to Business and Back to Business Extra, each running over the January to March period. These incentives are relevant for all sectors, and look to help customers boost their trading activity as lockdown restrictions change across the UK. 1 BACK TO BUSINESS An incentive for customers able to post a minimum of 50, 000 incremental mail items per quarter 12 p Access Price Mailmark Letter Economy* 2 BACK TO BUSINESS EXTRA Targeted at larger posting customers that can commit to sending a minimum of 2. 5 million incremental mail items per quarter in return for an even more favourable postage credit rate 11 p Access Price Mailmark Letter Economy* * Subject to terms and conditions. You will be charged at the current Access price, and awarded eligible postage credits at the end of the incentive period. Classified: RMG – Internal
BACK TO BUSINESS JANUARY TO MARCH THE THINKING BEHIND THE STRUCTURE OF THIS ROYAL MAIL INCENTIVE FOR JANUARY TO MARCH 2021 VOLUME IS CURRENTLY LOW BUT IS EXPECTED TO IMPROVE TO MARCH 2021 THE VOLUME BASELINE WILL BE LOWER THAN IN THE LAST YEAR SET A MINIMUM BASELINE OF 55% FOR JANUARY TO MARCH 4 Classified: RMG – Internal
KEY PRINCIPLES OF THE JANUARY TO MARCH OFFER THERE ARE FOUR KEY PARAMETERS TO UNDERSTAND THAT UNDERPIN THE INCENTIVE 1 Compare your mailing volumes in Q 2 2019 to Q 2 2020 2 Apply this trend rate to your Q 4 2020 volumes 3 Add 30% for Q 4 to determine your baseline 4 Set a minimum baseline versus 2020 of 55% in Q 4 The following examples show you how this works where a customers mail volume fell by 50% and where it fell by 90% to see the impact on the baseline calculation Royal Mail quarters: Q 4 (Jan-Mar) Classified: RMG – Internal 5
SCENARIO 1 IN Q 2 2020 THE CUSTOMER MAILED 50% LESS THAN THE VOLUME THEY MAILED IN Q 2 2019 6 Classified: RMG – Internal
HOW IT WORKS STEP 1 – WORKING OUT % VOLUME FOR Q 2 2019 VS Q 2 2020 STEP 1 EXAMPLE 1 What volume did the client mail in Q 2 – July to Sept 2019 What volume did the client mail in Q 2 – July to Sept 2020 5, 000 LESS 50% 2, 500, 000 CLIENT MAILED 50% LESS IN THE Q 2 PERIOD 7 Classified: RMG – Internal
HOW IT WORKS STEP 2 – WORKING OUT THE INITIAL BASELINE % DISCOUNT STEP 2 EXAMPLE 1 MARKET UPLIFT Q 2 2020 VS Q 2 2019 Q 4 Take the 50% reduction of Q 2 2019 versus Q 2 2020 and add uplift of 30% 50% + 30% BASELINE VS 2019 VOLUME = 80% 8 Classified: RMG – Internal
HOW IT WORKS STEP 3 – AGREE 2020 Q 4 MAILING VOLUMES STEP 3 EXAMPLE 1 2020 VOLUME Q 4 In Q 4 2019 the client mailed 1, 000 CLIENT MAILED 1 M IN Q 4 2020 9 Classified: RMG – Internal
HOW IT WORKS STEP 4 – APPLYING THE UPLIFT % TO CALCULATE YOUR BASELINE STEP 4 EXAMPLE 1 2019 VOLUME Q 4 Take the Q 4 2020 volume mailed and times by the % baseline 1, 000 BASELINE VOLUME BASELINE % X 80% = 800, 000 CLIENT VOLUME IN EXCESS OF 800, 000 IN Q 4 QUALIFIES FOR INCENTIVE RATE 10 Classified: RMG – Internal
SUMMARY SCENARIO 1 – CLIENT MAILED 50% LESS STEP 1 WORKING OUT % VOLUME FOR Q 2 2019 VS Q 2 2020 VOLUME What volume did the client mail in Q 2 – July to Sept 2019 5, 000 What volume did the client mail in Q 2 – July to Sept 2020 2, 500, 000 50% Q 2 2020 VS Q 2 2019 UPLIFT TARGET BASELINE VS 2019 VOL 50% 30% 80% 2019 VOLUME BASELINE % BASELINE VOLUME 1, 000 80% 800, 000 STEP 2 WORKING OUT THE INITIAL BASELINE % DISCOUNT Take the 50% reduction of Q 2 2019 versus Q 2 2020 and add uplift of 30% STEP 3 AGREE 2020 Q 4 MAILING VOLUMES 2020 VOLUME In Q 4 2020 the client mailed STEP 4 APPLYING THE UPLIFT % TO CALCULATE YOUR BASELINE LESS Take the Q 4 2020 volume mailed and times by the % baseline 1, 000 Baseline volume will be capped at 100% of the 2020 Q 4 period subject to terms and conditions. Classified: RMG – Internal
SCENARIO 2 IN Q 2 2020 THE CUSTOMER MAILED 90% LESS THAN THE VOLUME THEY MAILED IN Q 2 2019 12 Classified: RMG – Internal
HOW IT WORKS STEP 1 - WORKING OUT % VOLUME FOR Q 2 2019 VS Q 2 2020 STEP 1 EXAMPLE 2 What volume did the client mail in Q 2 – July to Sept 2019 10, 000 What volume did the client mail in Q 2 – July to Sept 2020 1, 000 LESS 90% CLIENT MAILED 90% LESS IN THE Q 1 PERIOD 13 Classified: RMG – Internal
HOW IT WORKS STEP 2 – WORKING OUT THE INITIAL BASELINE % DISCOUNT STEP 2 EXAMPLE 2 UPLIFT TARGET Q 2 2020 VS Q 2 2019 Q 4 Take the 90% reduction of Q 2 2019 versus Q 2 2020 and add uplift of 30% 10% + 30% = BASELINE VS 2019 VOLUME ADJUSTED TO MINIMUM BASELINE % 40% 55% Baseline cannot fall below 55% in Q 4 14 Classified: RMG – Internal
HOW IT WORKS STEP 3 – AGREE 2019 Q 2 AND Q 3 MAILING VOLUMES STEP 3 EXAMPLE 2 2020 VOLUME Q 4 In Q 4 2020 the client mailed 1, 000 CLIENT MAILED 1 M IN Q 4 2020 15 Classified: RMG – Internal
HOW IT WORKS STEP 4 – APPLYING THE UPLIFT % TO CALCULATE YOUR BASELINE STEP 4 EXAMPLE 2 2020 VOLUME Q 4 Take the Q 4 2020 volume mailed and times by the % baseline BASELINE VOLUME BASELINE % 1, 000 x 55% = 550, 000 CLIENT VOLUME IN EXCESS OF 550, 000 IN Q 4 QUALIFIES FOR DISCOUNT 16 Classified: RMG – Internal
SUMMARY SCENARIO 2 – CLIENT MAILED 90% LESS STEP 1 WORKING OUT % VOLUME FOR Q 2 2019 VS Q 2 2020 VOLUME What volume did the client mail in Q 2 – July to Sept 2019 10, 000 What volume did the client mail in Q 2 – July to Sept 2020 1, 000 STEP 2 WORKING OUT THE INITIAL BASELINE % DISCOUNT Q 2 2020 VS Q 2 2019 Take the 10% reduction of Q 2 2019 versus Q 2 2020 and add uplift of 30% STEP 3 AGREE 2020 Q 4 MAILING VOLUMES 90% UPLIFT TARGET BASELINE VS 2019 VOLUME ADJUSTED BASELINE % 30% 40% 55% 2020 VOLUME In Q 4 2020 the client mailed STEP 4 APPLYING THE UPLIFT % TO CALCULATE YOUR BASELINE 10% LESS Take the Q 4 2020 volume mailed and times by the % baseline 1, 000 2020 VOLUME BASELINE % BASELINE VOLUME 1, 000 55% 550, 000 Baseline volume will be capped at 100% of the 2020 Q 4 period subject to terms and conditions. Classified: RMG – Internal
REQUIREMENTS Classified: RMG – Internal
MANDATORY REQUIREMENTS HIGH LEVEL REQUIREMENTS FOR BACK TO BUSINESS INCENTIVE For Mailmark Advertising Mail, Responsible & Partially Addressed Letters and Mailmark Large Letters up to 750 g Post at least 50, 000 incremental items to qualify for this incentive Traditional Postcards are not allowed Volume posted between 28 December 2020 and 27 March 2021 inclusive You can apply for Q 4 volume Postage credits paid in a customers’ credit account or as a credit voucher. Credits will be valid for 12 months Letters posted as Unwrapped or Polywrapped are eligible for our Manual/1400 product Applications are capped at 10 m items per quarter Where a customers mailing volume is exceptionally seasonal or varies significantly by quarter we will request evidence to validate the customer baseline. Classified: RMG – Internal 19
EXTRA FACTORS BACK TO BUSINESS EXTRA INCENTIVE 1 2 This is an incremental Advertising Mail incentive for all sectors and customers able to post a minimum of 2. 5 m incremental items per quarter Built on an agreed volume baseline and dates as per previous slides, which is weighted account for lower volumes due to Covid-19 4 3 The Access price point for a Mailmark letter Economy is just 11 p for the customer if they post at least 95% of the accepted incremental volume A 3 p per item reconciliation adjustment will be applied to volume which falls short of customer commitment (with a 5% tolerance) 20 Classified: RMG – Internal
BACK TO BUSINESS EXTRA COMMITMENT RECONCILIATION EXAMPLES Classified: RMG – Internal
EXAMPLES 1 & 2 SHOW A 10 M COMMITMENT WITH A 1 M SHORTFALL AND A 10 M COMMITMENT WITH A 5 M SHORTFALL HIGHLIGHTING THE DIFFERENCE IN SAVINGS IF YOU ARE NEARER YOUR GOAL 22 Classified: RMG – Internal
HOW DOES IT WORK EXAMPLE 1 – SMALL DIFFERENCE TO FORECAST VOLUME (MAILMARK LETTER) EXAMPLE 1 Volume Q 2 (July-Sept) Accepted incremental forecast 10, 000 Actual incremental volume posted 9, 000 Volume below incremental forecast 1, 000 Price Paid Tolerance 5% below incremental forecast 500, 000 Reconciliation @ 3 p per unit 500, 000 £ 15, 000 9, 000 £ 990, 000 Back to Business Extra @ 11 p per unit TOTAL £ 1005, 000 Compared to Back to Business standard price of 12 p would have cost £ 1, 080, 000 Subject to terms and conditions. You will be charged at the current Access rate-card price, and awarded eligible postage credits at the end of the incentive period. The rates shown exclude any additional Upstream charges added by your chosen Access Provider. 23 Classified: RMG – Internal
HOW DOES IT WORK EXAMPLE 2 – FORECAST 10 M ITEMS AND ONLY POSTED 5 M ITEMS EXAMPLE 2 Volume Q 2 (July-Sept) Accepted incremental forecast 10, 000 Actual incremental volume posted 5, 000 Volume below incremental forecast 5, 000 Tolerance 5% below incremental forecast Price Paid 500, 000 Reconciliation @ 3 p per unit 4, 500, 000 £ 135, 000 Back to Business Extra @ 11 p per unit 5, 000 £ 550, 000 TOTAL £ 685, 000 Compared to Back to Business standard price of 12 p would have cost £ 600, 000 Subject to terms and conditions. You will be charged at the current Access rate-card price, and awarded eligible postage credits at the end of the incentive period. The rates shown exclude any additional Upstream charges added by your chosen Access Provider. 24 Classified: RMG – Internal
DATES AND OFFER CONDITIONS Classified: RMG – Internal
KEY DATES BACK TO BUSINESS Q 3 November 2020 Q 4 15 January 2021 Q 4 28 Dec 2020 27 Mar 2021 OPENING DATE APPLICATION DEADLINE VALID MAILING DATES Royal Mail quarters: Q 4 (Jan - Mar) Classified: RMG – Internal 26
THE APPLICATION PROCESS APPLY ONLINE FOR YOUR CREDIT AND RECEIVE YOUR DISCOUNT At the end of the incentive we will validate your actual volume and notify you of the credit 12 MONTHS You have 12 months to redeem your credits ROYAL MAIL CONFIRM YOUR ACCEPTED VOLUME COMPLETE ONLINE APPLICATION FORM POST YOUR COMMUNICATIONS Fill out the application form with your information, company details, proposed volume and product specification Print your communications Classified: RMG – Internal Apply online REDEEM ON FUTURE MAILINGS Use your postage credits on any future mailings 27
PRODUCTS BACK TO BUSINESS *Subject to terms and conditions. You will be charged at the current Access price, and awarded eligible postage credits at the end of the incentive period. 28 Classified: RMG – Internal
PRODUCTS BACK TO BUSINESS *Eligible Items over 250 g will qualify for a fixed credit for each item posted. 29 Classified: RMG – Internal
PRODUCTS BACK TO BUSINESS EXTRA *Subject to terms and conditions. You will be charged at the current Access price, and awarded eligible postage credits at the end of the incentive period. 30 Classified: RMG – Internal
PRODUCTS BACK TO BUSINESS EXTRA *Eligible Items over 250 g will qualify for a fixed credit for each item posted. 31 Classified: RMG – Internal
THANK YOU MAIL IS REMEMBERED Classified: RMG – Internal MAIL STAYS IN THE HOME MAIL DELIVERS LASTING RESULTS MAIL REACHES EVERYONE MAIL IS TRUSTED 32
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