We recently sat down with NZ Post’s Mail Solutions Consultant Tony Sheehan and Datam’s Mark Newell to get answers to our questions about the upcoming changes to postal delivery in New Zealand.
What exactly is changing to the service delivery process?
Over the next 2 – 5 years, urban mail will transition to an integrated network model. This means that instead of having two delivery networks—a ‘postie’ delivering mail and a courier delivering parcels—there will be just one courier delivery. This reduces the need for multiple deliveries to the same address. These changes will not affect rural and PO Box deliveries.
Why is NZ Post changing its service delivery process?
Mail volume has been declining significantly in recent years. In fact, NZ Post is now only processing 20% of the volume it was 20 years ago. At the same time, eCommerce has gone in the other direction and exponentially grown. Understandably, the decline in mail has had an impact on revenue, so NZ Post had to look at ways to streamline and improve efficiency so it could continue to meet its legal obligation to deliver everywhere across New Zealand.
What does this mean for direct mail programs?
The impact of this new integrated model on the sender is minimal. Delivery times will not be delayed, and New Zealanders will continue getting their mail on the same day they get it now. This is an internal change to NZ Post’s processing mechanism; the sender and receiver should not see any change.
It is designed to be a like-for-like service, so at this point, bulk mail will continue to be the most cost-effective way to communicate with your donors. NZ Post will continue to aim to deliver 95% of standard mail within 3 working days.
Will there be cost implications to this change?
NZ Post regularly reviews prices and has been increasing costs each year for some time now, which will continue. There have been some significant rises recently, and these are expected to continue in a similar manner for a couple more years to ensure they can run a financially stable and sustainable mail business.
When are these changes due to start?
The transition is expected to occur over the next 2 – 5 years. NZ Post is still developing the model, so the change will not commence for another 2 years. They will introduce it in smaller regional centres first to watch, learn, and tweak the service’s design before extending it around the country.
NZ Post predicts that metropolitan areas with higher-density mail will not move to this new integrated service for another five years.
Six key takeaways:
- Mail will continue to be delivered nationwide.
- The transition to the new delivery model is expected to start in 2 years and may take 3 more years to complete.
- Eventually, all metropolitan mail will be delivered via the courier rather than the separate Postie network.
- Mail will still be delivered to a letterbox.
- Sending customers are not required to change how they send mail.
- Prices will continue to increase significantly for a few more years.
The impact on your direct mail program:
- You can continue to use direct mail as an effective way to communicate with donors and supporters.
- Ensure you continue to factor postage price increases in your annual budgets.
- Even though postage prices continue to increase, direct mail remains integral to a sustainable and balanced fundraising program.
- As overall mail volumes decline, this creates a new opportunity to surprise and delight donors with best-practice direct mail in their letterboxes!
- Keep your data up-to-date to increase delivery rates, reduce costs, and retain profitability. NZ Post offers data cleansing through its business division, Datam.
- If you are not already, ensure you are tracking short-term and long-term ROI to help measure the impact on the net result of your direct mail program. This data can inform and support conversations with the Executive and Board.
- If you do have to decrease your mail volume due to budget constraints, ensure you are using best practices in your packs to lift open rates and ROI, i.e., personalised envelope printing, including using NZ Post-approved handwritten fonts, personalised identification stamps, and optimising packs for high-value donors.