Raise the price.......yeah that will work :P
Sorry business wise I would question any initiative that "increases prices" while "decreasing service".
This has not worked for them in the past - As you can see here (http://tvnz.co.nz/view/news_business_story_skin/613504) NZ Post hit record profits riding the Trademe Wave in 2005. Now things have tapered off - their only strategy is either decrease service or increase prices on standard services.
Sorry but they are doing it wrong - and their competitors will laugh all the way to the bank on it.
Here is hoping that Brian Roche nips this in the bud before people rip into them.
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