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Options and Switching Behaviour of Business Mail Senders


Publication Number: 2014-42
Authors: B. Baarsma, J. Weda & S. van der Werff
Commissioned by: Authority for Consumers and Markets (ACM)
Published by: SEO Economic Research
ISBN: 978-90-5220-011-8

Large business mail senders – companies that send out more than a million items a year – switch mail companies as well as types of mail service more often than small mail senders. One-third of these large senders have switched to a different mail company since 2010, and another 55%  have switched to a different service within the same mail company. This emerges from a survey of business mail senders commissioned by the Authority for Consumers and Markets (ACM). The study focuses on bulk mail, i.e. multiple items sent together by companies, at the same time and under the same terms (including  delivery time).

Partly because they switch more often, large business mail senders also encounter more obstacles when switching: 16-31% have experienced obstacles, as against 7-8% of small business mail senders. Switching from one mail company to another is particularly problematic: removing volume from the current mail company means that the sender falls below the minimum annual volume contractually agreed with its current provider and loses discounts on the products that it continues to purchase from that provider.

A separate part of the survey analysed how sensitive business mail senders are to price changes. A ‘conjoint analysis’ was used to estimate what proportion of mail volume in a particular market segment is lost owing to a rise in the market price. A sender can choose between four types of services: highly time-critical mail (delivery within 24 hours), time-critical mail (delivery within 48 hours) and non-time-critical mail (delivery after 72+ hours), the latter being divided into uncoded/unsorted and coded/sorted bulk mail. As well as switching to one of the three other market segments, a sender can switch to digital communication (e.g. e-mail) or decide not to send at all.

The conjoint analysis shows that business mail senders respond strongly to price rises: in the case of a 10% price rise for a particular market segment they move 36-51% of their volume to other types of services, to digital communication or don’t send mail anymore. The next cheaper market segment is the first choice when switching, i.e. the most attractive alternative to the cheapest bulk mail service (72+ hour coded/sorted mail) is digital communication.


Category: 2014, Siemen van der Werff