Mark Ritson on branding: Royal Mail delivers results - now for the brand

What a difference a year makes for Royal Mail. Revenues are at record levels and last year's £300m losses have become a profit of more than £500m. Staff morale seems to be on the rise and chief executive Adam Crozier, who once promised to resign if Royal Mail did not improve, has just received a £2.2m bonus for a job well done.

Arguably, much of Royal Mail's turnaround success can be attributed to price rises, cost savings and a company that has an effective monopoly in a massive market. But one thing that cannot be ignored is the remarkable improvement in the performance of mail delivery itself.

Crozier and his team went to great lengths to ensure a representative and rigorous measurement system to record the post's performance. They brought in independent WPP firm Research International, which set up a stringent system whereby 30,000 pieces of mail were sent by 8000 research agents to 121 different postcodes. To ensure complete objectivity, this independent measurement system has also been audited by accountancy firm Deloitte & Touche.

The recently published performance figures for the final quarter of the 2004-2005 year show that 92.8% of first-class letters were delivered the following day, a nudge away from the target figure of 93%, while 98.7% of second-class letters were delivered within the target time. Not bad for an organisation that missed 15 out of 16 targets the previous year.

Yet despite these enormous strides in its objective performance, criticism of Royal Mail continues to bubble over. Last weekend The Sunday Telegraph reported on the mass of 'anecdotal evidence' suggesting that Royal Mail continues to disappoint its customers. It referred to the many letters it continues to receive from angry consumers and quoted one, who complained that his 'local sorting office keeps to no set pattern, mail comes sometimes late afternoon and is frequently delivered to addresses bearing no relation to the address shown on the envelope'.

Liberal Democrat MP Lynne Featherstone has been collating the experiences of her constituents and takes a similar view. She claims Royal Mail's current performance is 'not acceptable' and is seeking a meeting with Royal Mail to press for action.

Worse still, Postwatch, the independent body set up on behalf of consumers, has openly questioned the methodology used by Royal Mail and Research International in reporting the performance figures. Alleging that the two organisations have become too close, Postwatch argues that Royal Mail knows who the mailers are and that consequently the impressive performance levels for 2005 are questionable - an allegation rejected by Royal Mail.

So are Royal Mail and Research International massaging the numbers? If so, it is a scandal of unprecedented proportions involving one of Britain's most established brands and one of the world's most prestigious and independent market research companies.

More likely, we are witnessing a classic situation in marketing. Objective performance improvements are not quite the same thing as subjective interpretations.

In marketing, we concern ourselves with both topics, but the ultimate emphasis falls on the latter.

After three years of negative editorials and word of mouth, it will be quite some time before the brand catches up with the service. Until then, newspaper journalists, MPs and forthright customers will continue to lambast Royal Mail for its past sins.

Either that, or, improbably, the biggest scandal in the history of market research is being perpetrated by sinister managers hell-bent on delivering spin, rather than the mail.


- Three years ago, prior to the appointment of chairman Alan Leighton and chief executive Adam Crozier, the Royal Mail was mired in industrial dispute, negative public relations and a daily loss of £1.5m.

- A year ago more than 14m letters had been lost and a Channel 4 documentary showed untrained postmen dumping bags of mail, rather than delivering them.

- Earlier this year Royal Mail announced a 145% increase in annual profits to £537m, triggering a bonus of £2m for Crozier and more than £1000 for 180,000 postal workers.

- These bonuses amounted to £218m of Royal Mail's profits.

- 30% of Britain's postal market is exposed to competition. The government's planned introduction of full competition by 2007 has been brought forward to January 2006, because the industry regulator, Postcomm, has been so impressed by the turnaround in Royal Mail's performance.


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