Mailmark, launched in March last year, now tracks 22% of machine-readable mail dealt with by Royal Mail.

Managing director of consumer and network access Stephen Agar told PrintWeek the company’s target was to increase the percentage of mail using Mailmark to 35%-40% by March 2016 and to 90% by March 2017.

It plans to increase a previously proposed price differential of 1%, due to come into effect in January, to up to 5% and is currently consulting businesses on the plans.

Legacy systems, Network Access Sorted CBC and Retail Sorted & Unsorted Barcode will be phased out “eventually”.

Agar said: “We’ve processed 1.25 billion items to date. Of the top 20 print mail producers 18 use Mailmark. We’re pretty much getting there with the industry. We’re not at all unhappy with the take-up so far, it’s quite respectable.

“I think it’s always our intention to make sure that our best price is for the mail that goes through the method that is easiest and that is the most efficient for us to carry. We do honestly see it as a bit of a win-win for everyone.”

Leicester-based security and transactional mail printer Opus Trust Marketing, which deals with Royal Mail’s HR post, was the first company to adopt the system.

Sales director Mark Hetem said Opus Trust could see clear advantages for customers: “Mailmark provides event information further down the line, thus enhancing what we currently provide. This, however, has come at a cost, as we have had to invest heavily in software development and infrastructure. Feedback from the wider market is that this is not a cost all mailing houses can bear.”

Direct Marketing Association (DMA) director of external affairs Mike Lordan said the March 2017 goal felt “ambitious” and added that it was important there were alternative products to use, albeit at a higher price.

“Mailmark is not suitable for all customers," he said. “Royal Mail has invested heavily in Mailmark because it offers them savings in processing and can provide customers with valuable data about their mailings, so it is understandable that they want to encourage customers to use it wherever possible. Offering a price differential is a perfectly legitimate way to incentivise customers to use the service.”

Lordan added that investing in new technology was a normal process for companies to remain competitive. Royal Mail has provided a £500,000 funding pot, not yet empty, to assist this, with companies eligible for grants of up to £1,000.

Agar said businesses can buy the necessary software for about £1,500 and so upgrading should not be an issue for most businesses.

Currently Royal Mail scans between 50 million to 60 million items a night using Mailmark. Mail is scanned up to five times, starting when it arrives at a Royal Mail sorting office.

Hetem added that while Royal Mail had made “great progress", Mailmark had “fallen short of providing the full product that customers require”.

“We along with other mailing houses and customers want a direct link web service, which will allow us to pull the event data into our systems ‎so we can provide customers with one end-to-end view of the mailpack journey. This would add significant value to the whole postal supply chain.”

Agar countered that he was not ruling that out but said it was a question of funding. Royal Mail has already invested £70m in Mailmark.

He called on businesses to use their creativity and imagination to envision how Mailmark could work better for them.  

“Mailmark is a quiet revolution in letters. I don’t think people have really begun to realise what a revolutionary process that is.”

Business mail, which is primarily transactional, accounts for 48% of the letters sector by revenue, and marketing mail, 26%. Social mail makes up just 9%.