From April 7th 2025, the cost of sending a first-class stamp will rise to £1.70, and second-class will increase to 87p. This is Royal Mail’s latest move in a series of price hikes aimed at balancing the books against falling demand. However, for marketers and small businesses that rely on Direct Mail, the question remains: is this strategy helping anyone in the long term?
At TDP Agency, we understand the value Direct Mail can bring to a marketing campaign. It’s tactile, targeted and often more memorable than digital-only efforts; but that value comes under pressure when the cost of postage keeps rising while delivery volumes continue to drop.
The Cycle: Falling Demand, Rising Prices
Royal Mail reported that addressed letter volumes have dropped by 60% since 2004. In response, the organisation continues to increase postage costs to compensate for the declining volume. However, by making it more expensive to send mail, they risk driving even more customers away from using the service in the first place.
It’s a bit like charging more for fewer features in a product—eventually, even loyal users start questioning the value.
This is especially problematic for small businesses. Many use mail to reach local customers, send invoices or run targeted campaigns. For them, these increases aren’t just inconvenient—they could be the final nudge towards abandoning mail altogether.
The Impact on Direct Mail Campaigns
Direct Mail has always been a channel where cost-efficiency is crucial. You budget for print, design, data and postage. When one of those elements balloons in cost, the entire campaign ROI takes a hit.
We work with brands who rely on precision-targeted B2B and B2C mailers. They’re not sending millions of flyers to unvetted households; they’re carefully curating messages to a refined list of prospects. In those situations, postage makes up a sizeable chunk of the campaign cost.
Every few pence added to postage rates can translate to hundreds, or even thousands of pounds extra per campaign.
Could Smarter Data Mitigate the Costs?
One way to minimise the impact is to make every mailer count. If you’re still mailing to outdated addresses or cold leads with little chance of conversion, you’re burning budget.
Clean, accurate data is your best friend here. At TDP Agency, we help businesses cleanse their mailing lists, removing duplicates, goneaways, and unresponsive contacts. We also help profile and segment your audience, so you’re reaching the people most likely to convert.
In other words, if you’re going to pay more to send mail, make sure it’s going to the right person.
Are Royal Mail Undermining Their Own Product?
There’s an irony in the fact that Royal Mail continue to highlight the enduring value of Direct Mail, while simultaneously making it more expensive to use. At what point do the rising costs render that value obsolete for many?
Some marketers are already shifting budgets elsewhere – email, social, programmatic ads. These aren’t always as effective as Direct Mail, especially when targeting certain demographics, but they come without the ever-increasing postage bill.
It’s a dangerous tipping point: if price hikes accelerate the decline in demand, Royal Mail may be eroding the very base they’re trying to preserve.
A Future for Direct Mail?
Despite the challenges, we still believe Direct Mail has a vital role to play, particularly when it’s targeted, relevant and well-executed. The key is ensuring every piece of mail works harder for your campaign.
That means:
- Using cleansed, segmented data
- Personalising content to the recipient
- Integrating mail with other digital channels
- Tracking response and refining based on results
The landscape may be changing, but with the right tools and strategy, Direct Mail can still deliver excellent returns.
Final Thoughts
Royal Mail’s latest price increase is unlikely to be the last and for businesses who continue to see value in Direct Mail, it’s more important than ever to be strategic.
Before you drop your next campaign, ask yourself:
- Are we mailing the right people?
- Is our data up to date?
- Can we personalise more effectively?
If the answer to any of these is no, it might be time for a data refresh. Get in touch with TDP Agency for a free audit and let’s help you get more from every penny you spend on mail.
Want more insights on managing mail marketing? Check out our previous blog: How Royal Mail Price Hikes Impact Direct Mail Marketing