Postcodes are a series of different numbers and/ or letters representing specific geographical areas that are included in postal addresses. They sometimes include punctuation or spaces. The primary purpose of using postcodes is to sort mail and ensure all items are delivered to the correct destinations. 

Postcodes are known as postal codes in Canada and ZIP codes in the US. Though the names are different, the purpose remains the same in all countries: identifying locations and mail sorting.

Postcodes play a vital role in facilitating easy and efficient direct mail communication. But most people and firms do not understand postcodes or their significance in direct mail campaigns. Here, we will discuss what postal codes are, how they can help your business operation, and more. A proper understanding of the postal codes will help you organize effective direct mail campaigns.

Why is Understanding Postcodes Important?

We know that the postal codes were first developed by the Royal Mail to enhance and streamline postal deliveries. But, you must understand that postcodes and their geography have become an integral part of business planning over the years.

It is true for the UK postal codes and all the postal codes around the world, including ZIP codes in the US. The application of postal codes is not just limited to postal delivery and has excellent growth potential. Hence, businesses must get a proper understanding of postal codes.

Formulate Marketing Strategies

Understanding postal codes and their working is essential for advanced marketing strategies like automated direct mail marketing. For example, systems like PostGrid automate your direct mail campaigns and provide you with advanced features.

PostGrid also enables you to have advanced capabilities like geocoding and reverse geocoding. Using such a feature, you can easily plot the presence of your target audience in specific areas. You can then use this map or data to develop targeted campaigns explicitly made for these locations.

As we have briefly mentioned before, the postcodes are a combination of numbers and letters, or, in other words, alphanumeric. Usually, a postcode consists of five or seven characters, and they are used to identify a group of addresses/houses.

The UK postal codes have two parts: an outward and an inward code, and a space separates them. It is also worth noting that every full postcode contains fifteen delivery points on average. Moreover, each postal delivery by the Royal Mail also happens in two stages.

Routing of Mailer Using Postcodes

Every time a letter is collected for delivery, it is identified using the first part of the UK postal code or the outward code. After identifying the outward code, the mailer gets routed to its main sorting office. Similarly, the local sorting office identifies the second part of the postcode or the Inward Code.

The mailers get assigned to individual mail carriers by the local sorting offices. A similar system is used for postal delivery all around the world. However, when it comes to UK postal codes or postcodes, they operate at four levels.

The four levels of operation of a UK postal code are better explained through an example. So, from here on, let’s consider the postcode SP7 0AG to explain how postcodes work.

Level 1: Area Postcodes

The Royal Mail has divided the areas it serves into 124 parts for making quick and easy postal deliveries. As you can see in the postcode example, we have taken that the postcode is split into two halves. Note that the postcode’s first part is the outward half of the postcode.

The first two letters of the postcode are used to represent the area postcode. If we consider the postcode example SP7 0AG, the area postcode would be SP. Usually, the area postcodes are named based on the area or Post Town they cover. However, It is not always the case.

The SP in the example we have taken denotes the Post Town Salisbury. Similarly, AB is used to represent the Post Town Aberdeen, YO for the Post Town York, and so on. Pretty simple, isn’t it? So this way, the Royal Mail can easily identify which Post Town your mail should go to.

Special Cases

Some area postcodes are unlike the normal ones we are familiar with and look disconnected from the Post Town they represent. Take Rochester in Kent or Lerwick in Shetland, for example. Their area codes are ME and ZE, respectively.

Both of these area codes may seemingly appear disconnected from their respective Post Towns. However, that is not always the case. Here, ZE for Shetland was derived from the Zetland, an archaic spelling of Shetland.

Similarly, London also has area codes that do not really align with the Post Town. It is because they had developed a postal system for London way back in the 19th century. For example, the area code for North London is simply “N.”

Trivia

Did you know that the smallest size area code in the UK is WC, West Central London? Its area is only 2.59 square kilometres. In the meantime, Inverness (IV) is the area code with the largest size. Inverness spread to an area of 16169.3 square kilometres.

It is worth noting that the average size of an area postcode is 2009.831 square kilometres. Shetland (ZE) has the least number of districts, with only three of them in it. At the same time, Belfast, with 80 districts, has the largest number of districts.

Level 2: District Postcodes

As you might have already guessed, each postcode area is further divided into district postcodes for segmentation purposes. The district postcode is denoted by the number or numbers immediately following the area postcode.

Let’s consider the postcode example SP7 0AG again. Here, the district code is the 7 in SP7. Similarly, you can find the district postcode in every postcode. The district postcode may contain one or more than one digits, so the space between the outward and inward is essential.

Provision of Districts in Postcode Areas

There are almost 3000 postal districts all over the UK. By subdividing the area postcodes, the district postcodes enable the Royal Mail to route the mail to their relevant sorting offices. We know that districts fall into different areas, and there are around 23 districts in an area.

However, the actual number of districts in an area can vary anywhere between 3 and 77. This variation is mainly due to the considerable difference in size and population of the postal regions.

Trivia

The smallest postcode district in the UK is Eastern Central London or EC2N, with a 0.07 square kilometres area. On the other hand, the biggest postcode district is Lairg, and the district code is IV27. It has a massive area of 3607.8 square kilometres. Thus, the average size of a postcode district in the UK is 85.47 square kilometres.

Level 3: Sector Postcodes

Each postcode district in the UK is further divided into various sectors. Similar to the district code, the sector code is also denoted using numbers. In the postcodes, they are written right after the district code however, they are separated by a space.

It also means that the sector code is a part of the inward code that we have mentioned above. Whereas, the district code is a part of the outward code or the first half of the postcode. As both are numeric, separating the district from sector codes avoids unnecessary confusion.

Forgetting to add the space between the inward and outward codes is one of the common mistakes businesses make. Although such minor mistakes are expected now and then, it is not ideal for business communications.

It is why most businesses now choose to use an automated direct mail system like PostGrid. With a tool like PostGrid, every address is standardized and verified, so there is no scope for such errors.

Provision of Sectors in Postcode Districts

There are around 11,200 postal sectors in the UK. The postal sectors play a vital role in helping the Royal Mail to pick their delivery rounds. There can be 1 to 10 sectors in a postal district. However, the average number of postal sectors in a district is three.

Trivia

The smallest postal sector in the United Kingdom is in London, which is EC3A 1. It has an area of merely 0.002 square kilometres. On the other hand, Sutherland in Lairg is the largest postal sector, and it has an area of 3607.8 square kilometres. This brings the average postal sector area size to 25.1 square kilometres.

Level 4: Unit Postcodes

The unit postcode is the fourth and final level of a UK postal code. It is used to point you towards a group of houses or addresses. The unit postal code can be used to describe a particular property or a set of properties. Listed below are the types of properties that can be described using a unit postcode:

• Street or a part of the street
• Single Addresses
• Group of Properties
• A subsection of a property
• Individual organizations
• Departments within an organization

As you can guess, there is a vast number of unit postcodes in the UK, over 1.7 million to be exact. However, this number regularly keeps on changing as around 2750 unit postcodes are created, and 2500 unit postcodes are terminated every month.

Large User Postcode For Organizations

It is worth noting that the Royal Mail allocates some organizations with a unique postcode. These unique postcodes are assigned to better segment the delivery of a large number of mailings made to a single address.

However, to qualify for a unique postal code, an organization must receive an average of 50 mailers or more a day. Therefore, the Royal Mail allocates your organization a large user postcode only if this condition is met. For example, DVLA is a prominent mail user, and they have different postcodes for their various departments.

Importance of Unit Postcodes

You may think of unit postcodes as worker ants that do all the work on a base level. Unit postcodes enable you to identify around thirty million addresses or delivery points in the UK. So, you can deliver to a particular address only because you have the address’s unit postcode.

As you can guess, you need at least one delivery point to constitute a unit postcode. Furthermore, a unit postcode can have as many as 100 delivery points. However, the average number of delivery points in a unit postcode is 17.

Trivia

Each postal sector has 180 postcodes on average. As mentioned above, the postal sector needs to have at least one postcode address and a maximum of 390. However, theoretically, the maximum number of postcodes in a postal area is 400.

 Also Read: Postal Code Targeting

The ZIP in ZIP code is short for the Zonal  Improvement Plan. As we have mentioned before, the postal code system is universal, and it goes by different names in different parts of the world. The ZIP codes are the postal code system that is used in the US.

Like the postcodes in the UK, the ZIP codes also enable their postal service provider to identify locations or addresses. However, the US ZIP code system uses a 9-digit ZIP code system, unlike the alphanumeric system used in the UK.

Differences Between UK Postcodes and Other Countries’ Postal Codes

Canada

Canada also follows an alphanumeric pattern, which makes it highly granular. Moreover, they also have an inward and outward code, similar to the UK. However, unlike the UK, it alternates numbers and letters. Here is a breakdown of their postcode

• First character: Province or territory
• Second character: Urban/rural indicator
• Third character: Specific city area
• Fourth character: Sector
• Fifth character: Local delivery unit

Example: M5V 3C6

Japan

They have an entirely numeric postal code system. It is also based on a completely different addressing system, where blocks and building numbers replace street details. Moreover, unlike the UK, their addresses flow from larger to smaller units. Here’s a breakdown of the postal code used in Japan.

• First number: Regional block of Japan
• Second number: Localised area
• Third number: Narrowed down to a specific ward
• The last four digits: Detailed delivery point within the regional block

Example: 100-0001

Germany

Unlike the UK, Germany follows a five-digit numeric system. Moreover, while the UK postcode is sufficient to identify a specific address, the German counterpart covers a broad region. You will need the street name and house number for accurate delivery. Below, we have broken down each digit in the German postcode.

• First digit: Broad postal region
• Next two digits: Sorting district
• Last two digits: Local delivery area or city borough

Example: 50667

India

In India, postal codes are numeric and refer to specific post offices rather than individual streets and buildings. Moreover, one postal code can serve an entire neighborhood, several blocks, or villages. Below is a detailed breakdown of the meaning of each number in an Indian postal code.

• First digit: Zone
• Second digit: Sub-zone
• Third digit: Sorting district
• Remaining three digits: Delivery post office

Example: 110001

Common Mistakes to Avoid When Using UK Postcodes

Not Adding a Space Between Inward and Outward Code

Royal Mail’s sorting system relies on an accurate format to identify the delivery points. Without the space, the postcode will be marked invalid, leading to undelivered or returned mail. Always write the postcode according to Royal Mail’s addressing guidelines. 

Using Outdated Postcodes

This can lead to undelivered mail and failed communication. This will result in wasted printing and postage costs, as well as a poor business customer experience. You must regularly update your address database. You can invest in an address verification tool, such as PostGrid, to ensure delivery accuracy. It cross-references address details with Royal Mail’s records. This will ensure you always have the up-to-date postal code.

Assuming Postcodes Align With Administrative Boundaries

In reality, postcodes often span multiple boroughs or local authority areas. This assumption can lead to incorrect segmentation when mapping customer territories or service regions. We recommend combining postcode data with a geographical boundary tool to avoid this. You can also utilize geocoding services that map postcodes to their corresponding real-world coordinates.

Using Incorrect Format

Adding an extra symbol, using local abbreviations, or formatting the postal code like the US format can confuse the postal system and lead to delays or returned mail. We recommend checking the Royal Mail’s official website to determine the correct postcode format. You can also use the PostGrid Address Verification solution, which standardizes the format according to UK addressing guidelines.

Assuming One Postcode Equals One Address

A single UK unit postcode can represent over 100 delivery points. Assuming a one-to-one relationship can lead to logistics and delivery issues. You must understand that a postcode alone cannot pinpoint a specific address. You must always write the complete address with the recipient’s name, house or building number, and postcode.

The primary purpose of the UK postal code for businesses is to send direct mail to their customers or clients. However, getting access to accurate postcodes is not so easy. Even accurately copying the postcode to a mailer can be hard at times, especially if your business sends bulk direct mails.

Thankfully, there are advanced solutions like PostGrid that can help you verify and standardize address databases. For example, PostGrid’s address verification API allows you to bulk verify your addresses using a simple CSV file.

Also,  you can choose to print your direct mails, including postcards, brochures, newsletters, and more, via PostGrid. By doing so, you can be sure that your mailers have validated and standardized addresses. PostGrid even offers advanced capabilities like geocoding to make the most out of your marketing efforts.

Postal code is used for numerous purposes today, and its scope goes well beyond postal mail delivery. For example, businesses now rely on postcodes not just for delivering marketing and communication mailers but also for advanced marketing strategies. 

Postal code plays a vital role in advanced operations, including demographic profiling and postcode mapping. However, all of this requires accurate postcode data. A powerful address verification API, such as PostGrid, can help you access accurate postcode data via Royal Mail’s address database. 

PostGrid also has advanced capabilities like geocoding, which can help you in postcode mapping. Therefore, tools like PostGrid enable you to target your direct mail better and enhance its results. You can even personalize, print, and mail your direct mail via the Royal Mail using PostGrid.

It is high time businesses adopt innovative solutions like PostGrid to streamline their direct mail operations. With an exceedingly high deliverability rate and automated process, you can minimize your postcodes and direct mail errors. As a result, you will be able to run seamless direct mail campaigns and access deep insights that you never could before.