Royal Mail Group: Business Mail Testing and Innovation Incentive

What is the Testing & Innovation Incentive (TIS)? Royal Mail is offering an incentive to encourage the testing of business mail applications (including publications) The incentive is to help customers grow their business by supporting their use of mail for a business purpose that they have not tried before. For example, applicants may want to test: the introduction of a loyalty mailing to their highest value customers, the introduction of a ‘welcome pack’ to encourage retention, the addition of new messages to their customer statements, or the launch of a new publication (see page 2 for the definition of a publication ) How does Business Mail TIS work? The customer will need to plan a mailing or series of mailings over the test period and put in place a suitable process to measure impact and performance. You may be asked to share test results with Royal Mail Royal Mail will award postage credits for each qualifying item that is sent during the test We expect that subject to successful testing the new mailing activity will be rolled out for a further period Royal Mail will award further postage credits for mailing activities which are rolled out immediately after the test period Minimum and maximum volumes During each of the test period and the roll out period the customer must post a minimum of ten thousand (10,000) items up to a maximum of ten million (10,000,000) items 1

What items are eligible as a publication? A publication is a newsletter, journal or magazine. The front cover of each publication must clearly show its title and at least one of the following: the date of issue; the month; the season; or the issue number. At least one-sixth of the publication must be editorial content. Editorial content does not include: advertising material or data; or any information relating to a product or service, such as pricing information or product descriptions, which relate to either the publisher of the magazine, the owner of the magazine or a third party. The front and back covers are not included in calculating editorial content. Catalogues, brochures, directories and exhibition guides are not deemed to be magazines, newsletters or journals and are therefore not eligible as Publishing Mail. Goods and articles that are in fulfilment of an order or request made to the sender, seller or supplier are also not eligible. To qualify for the TIS Incentive publications must be sent using Large Letter services. 2

Roll out Period Discount (pence)  What is the offer for business mail tests? Business Mail tests must be sent using Mailmark® letter and large letter services. Customers can send machine-readable letters and large letters using Royal Mail Mailmark® if they are set up with their own participant ID. For qualifying business mail we’re offering customers: c. 30% per item off the Access price, payable as a postage credit, for Business Mail tests performed over a 6 month period C. 10% per item off the Access price ,payable as a postage credits, for Business Mail tests that are rolled out in the 6 month period after the test has ended Royal Mail product description Format Weight Test Period Discount (pence) Roll out Period Discount (pence) Business Mail* 70 Mailmark Letter 0 – 100g 6.9 2.3 Large Letter 0-100g 9.4 3.1 101-250g 12.3 4.1 251-500g 15.5 5.2 501-750g 24.0 8.0 3

Roll out Period Discount (pence)  What is the offer for publication tests? Tests involving publications may only be sent using large letter services. Although tests may be sent using Mailmark® large letter services exceptionally for publications customers may also send non-machineable large letters using non-mailmark services. For qualifying publishing mail we’re offering customer: c. 30% per item off the Access price, payable as a postage credit, for Publishing Mail tests performed over a 12 month period C. 10% per item off the Access price ,payable as a postage credit, for Publishing Mail tests that are rolled out in the 12 month period after the test has ended Royal Mail product description Format Weight Test Period Discount (pence) Roll out Period Discount (pence) Business Mail* 70 Mailmark Large Letter 0-100g 9.4 3.1 Business Mail 1400 Manual 10.0 3.3 Business Mail 70 Manual 11.5 3.8 101-250g 12.3 4.1 12.5 4.2 15.0 5.0 251-500g 15.5 5.2 16.0 5.3 19.0 6.3 501-750g 24.0 8.0 25.0 8.3 28.0 9.3 4

How we will measure your TIS mailing volume Postage credits are payable for each eligible item posted on the TIS incentive . The value of a postage credit depends on the mailing item format and weight and, if posting with Royal Mail, the service/product used for the test mailings. When posting your test mail items you must ensure that you apply a unique reference number to the sales order so that we can accurately identify your test mail items. Royal Mail and/ or your mailing partner will help you with this. Postage Credit Application We will calculate your postage credits at the end of the test period and again at the end of the roll out period. Within six (6) months of the last posting date of your test period you must complete a claim for postage credit using a TIS Credit Application Form so that we can calculate your test period postage credit. Within six (6) months of the last posting date of your roll out period you must complete another claim for postage credit using a TIS Credit Application Form so that we can calculate your roll out period postage credit. Payment of Postage Credits We will provide the postage credits to you in the form of a posting certificate which contains a unique voucher code (a Postage Credit Voucher) or, if you prefer, directly into any account you may hold with Royal Mail. 5

Application form You must complete an online application form to be accepted on to the TIS incentive. Supply Chain Details: On your application we ask for details of your supply chains e.g. whether you post with Royal Mail , either directly or through an Access Operator, or with an alternative delivery provider. Volume: On your application we ask that you provide a forecast of the dates and number of items you intend to send . Format and Weight of items: Your application will also ask that you indicate the format, and weight, of the items that you intend to send . Performance Measurement: We will ask you to indicate on your application form what measures you will be implementing in order to indicate to you at the end of the test how successful the test has been 6

STEP 1 STEP 2 STEP 3 STEP 4 STEP 5 Steps to earning your test incentive STEP 1 Plan your test - Royal Mail and/ or your mail provider will help you to complete and submit the application form STEP 2 Send your application - we will review it and on approval you will receive an email confirmation of acceptance STEP 3 Send test mail - Royal Mail will measure your test volume using a the mailing reference in the Mailmark e-manifest or your other supply chain details STEP 4 Claim postage credits – Royal Mail will help you to submit a simple postage credit form in order to claim your credit STEP 5 Redeem postage credits – present to your mail provider in full or part payment of a future posting 7

Q&A: Q: How long is this incentive open for? A: Royal Mail is accepting applications to operate under the TIS incentive until 31st December 2018 Q: Does the test mail volume need to be incremental? A: It depends on the type of test. If you are testing the new design of an existing mail piece then this may qualify for a Business Mail test even though it is not incremental. For tests involving the launch of a new publishing title the mail must be new volume. Q: I don’t currently use Mailmark, can I still apply for the Scheme? A: Business Mail tests may only be sent using Mailmark services. However, if you are sending a new publication and your items are non-machine readable you may use non-Mailmark services Q: Are there any volume limits for my test mailing? A: Yes, you can send up to 10 (ten) million items in the test period and you can also send up to 10 (ten) million items during the roll our period. You will not receive any postage credit if your actual TIS volume is less than 10,000 mailing items during the test period and/ or the roll out period. Q: Why is the test period and roll out period longer for publications? A: We understand that it can take longer than 12 months to assess whether a new title is performing as planned. The 12 month test period and 12 month roll out period provides extra time for customers to assess performance 8

Q: What additional information might you need during the application stage? A: In some cases we may request information relating to your historic use of mail to help us verify that you have not used this type of mail application in the previous 12 months Q: How do I claim my postage credit? A: Within 6 months of the end date of your test mailing, you must complete a Postage Credit Application detailing your TIS advertising campaign postings and send it to growthincentive@royalmail.com and write ‘Postage Credit Application’ in the subject bar. Q: How will I receive my postage credit? A: Postage Credits will be awarded to you via email in the form of a posting certificate which contains a unique voucher code. Or we can pay the credit directly into an account you hold with Royal Mail if you would prefer this and you state this on your credit application form. Q: How long will my postage credit vouchers be valid for? A: Postage credit vouchers are valid for 12 months from date of issue. Q: How do I redeem a postage credit? A: You may use the postage credit towards payment of an invoice for any future posting. Postage Credit vouchers may be redeemed directly with Royal Mail, an Access Operator or with a Mailing House that has signed a Voucher Redemption and Reimbursement Agreement. You will be provided with a voucher redemption form containing full instructions about how to redeem the voucher. Q: Can I redeem Postage Credits with any mail provider? A: Yes, the postage credit vouchers can be redeemed with any participating mail provider. 9