The challenge
If there’s one thing Kent-based KPM Group can’t be accused of, it’s lack of ambition.
The business first started life, albeit in a very different form, in 2001 as KPMS when still current owner Nigel Copp took over Northampton-based litho printer Spectrum Flair. Recession-based ups and downs saw the firm go through many iterations over the next few years, including a sale to Print Factory and then resurrection in 2007 following that company’s demise. A short spell as part of a co-operative, and KPMS, now purely dedicated to DM and mailing, was ready for growth by 2010.
Nigel Copp and co-owner and operations director Graeme Burton, who’d joined in 2007, moved the company to a 900m2 unit and started a drive to recruit print talent they’d come across over the years.
“So from 2010 to 2011 we had about 40% growth organically, and then 35% growth the year after, then slightly smaller growth last year. So we went from being a £700,000 turnover in 2007, to a £5m company today, which is good,” reports Burton with charming understatement.
The company, which rebranded to KPM Communications in 2012, has always been wary, however, of a certain kind of growth. While ambitious, the company has always wanted to keep its focus squarely on customer service rather than price-slashing volume.
“The plan was never just to grow DM, otherwise you end up competing on volume and price,” says Burton. “If you’re tied up in that market no one wants to listen to what ideas you have; they want to know ‘how cheap you can do it.’”
KPM’s strategy has always been then to branch out – to consider what added value it could offer that would be helpful to existing customers.
“We go out to help the clients we’ve got by showing them what they could do. We’re quite happy for them to cut down volumes; that’s where we’re different. We’ll say ‘do you really need to do that many? Have you looked at other channels?’” says Burton.
Branching out into cross-media communications such as email campaigns and PURLs has been vital to KPM’s recent growth, then. As has another venture embarked upon a year ago.
Diversifying into magazine publishing isn’t perhaps something even most magazine printers would consider, so different are the skills needed for printing content from actually generating it.
And yet, keen to grow the company yet further without ramping up DM volumes, this is exactly what KPM did.
The method
More specifically, the company purchased the rights to publish Facilities Management Journal (FMJ), Cleaning Hygiene Today and The Flooring Magazine (it also purchased supplements Women FM and Month in FM but discontinued these to focus on the above more lucrative, core titles).
KPM was already providing fulfilment services for the magazines and when publisher Diamond Media’s parent company Sparta Press went into administration, the company saw an opportunity it felt it just couldn’t pass up.
“When they came to us and said they were in difficulty, we looked at the client base and thought facilities management companies such as Mitie and some of the big cleaning companies, HS and people like that, were big DM targets for us,” reports Burton.
The fact there would be cross-over between the magazines’ advertisers and direct mail clients was key to KPM taking on these particular titles to establish new arm KPM Media.
“We thought ‘this is going to be a bit of a punt but if we’re correct in what we’re assuming, that there’s cross-over in publishing and direct marketing, it will pay off’,” says Burton. “We thought: when our sales guy goes to an agency they’re probably speaking to the same person a publishing salesperson is going to.”
So, after purchasing the three titles for around £35,000, the company set about investing what has totalled around £230,000 over the past year. This was spent on keeping the magazine going in this transition phase, and wages and new facilities for the nine editorial staff brought over from Sparta Press (the magazines are now printed by Wyndeham Grange).
Key has been knowing when to listen to the experts. The company enlisted the help of a consultant, a temporary editor who sits on the British Institute of Facilities Management board and has a lot of contacts in the sector, for two months. “Nigel and I took a back seat and listened for a few months,” reports Burton, adding: “Over the last year we’ve been on a learning curve, because we didn’t know anything about publishing.”
KPM also enlisted the help of some key subscribers, asking for feedback on what they’d like to see in the magazines. Burton and Copp quickly realised though that just as important as knowing when to sit back, was knowing when their fresh take on the magazine would be valuable.
“We were in a position where the magazine was quite dated. Where people are involved with it for a very long time, we could look at it with fresh eyes and decide it’s not really doing what it should be,” says Burton. “The magazine was 21 years old; there were no features. So we introduced a better page layout, more relevant news, comment from industry experts and more stimulating feature content.”
Other changes have included revamping the titles’ websites and offering more enticing advertising packages. “We’ve been through a year of putting a more stable editorial team in, revamping the magazine and thinking of different ways of attracting the advertisers, so doing different packages and advertising by sector,” says Burton.
It’s been important to inject plenty of investment into the venture, says Burton. He and Copp hadn’t quite anticipated how drastically a change in ownership would impact ad revenue. So plenty of capital was needed to keep the publications, which are funded entirely by ad revenues, ticking over.
KPM has also been careful, however, to give the original DM part of the business plenty of TLC. The company has invested £400,000 in expanding production facilities over the last year, doubling this facility to 1,800m2 and adding another Ricoh C901 and another intelligent enclosing line.
The result
Because this drop in advertising revenue presented more of a challenge than KPM had anticipated, the magazines haven’t quite started generating a profit yet. But Burton is confident this will have changed by October.
“This year we’re doing a big push at the Facilities Show, as KPM Group, with all the cross-media and marketing and advertising opportunities we can now offer,” reports Burton.
The company’s central goal of cross-selling between DM customers and magazine advertisers is going well, though, reports Burton. The company is in the process of amalgamating sales roles so that the two sales people within KPM Media, and the three employed by KPM Communications, can sell both propositions.
The revamped magazine and website is getting very strong feedback, adds Burton, with FMJ recently topping any facilities management publication on website visits. (The magazine boasts 18,000 online and 4,000 print subscribers.)
Next on the company’s growth hit-list is offering editorial services to some of KPM’s DM customers. “The revenue still isn’t quite there at the moment, but the plan is to do copywriting for charities,” says Burton. “Quite a few of the smaller charities we work with have expressed interest in that. We’re looking to roll that out in the later part of this year. We’ll need another editor-come-copywriter experienced in that sector, and a designer.”
The future also holds much activity in the clickable paper and augmented reality space. The company has just launched its own AR app, eye interactive (eyei), aimed at both DM and publishing applications, with the first issue of FMJ to use this just published.
“FMJ was a good point to introduce that. Sometimes there’s only so much you can put into words. For example in the latest issue there’s a piece on Hever Castle, which had huge Biofuel burners, and it’s really good to be able to show them,” says Burton.
The company is also set to launch two new magazines, one aimed at mailing houses and data processors, and one on augmented reality technology.
With the company on-track to achieve an expansion target of a £7m-plus turnover in 2015, offering a holistic package of creative marketing and advertising solutions seems, then, to be paying off.
While the areas the DM house has branched into might look rather tangential, they all come back to one key core principle. In the words of Burton, it’s all about “showing people the things they didn’t know they were looking for”.
VITAL STATISTICS
KPM Group
Location Kent
Inspection host Graeme Burton, co-owner and operations director
Size Turnover: £5m; staff: 25 full-time, up to 60 part-time
Established In 2001 as KPMS when current owner and managing director Nigel Copp took over Spectrum Flair in Northampton. This was taken over by the Print Factory. When this business failed in February 2010, Copp started from scratch, retaining the KPMS name and becoming a co-operative organisation in conjunction with others. The company moved from being a co-op in 2010, three years after Burton’s arrival, rebranding to KPM Communications in 2012.
Products Direct mail and cross-media solutions
Kit Two Kodak Digimaster EX138s, Kodak Digimaster EX125, Konica Bizhub Pro C6500e, Ricoh C901, Astrojet 1000, Astrojet 3800, ASI XL labeller, two Buhrs BB300s, Pitney Bowes Vitesse and a Mailcrafter
Inspection focus
- Branching out into magazine publishing
DO IT YOURSELF
Following suit
Burton feels it will be the larger companies that will have the resources to diversify into publishing in the way KPM has. “Big printers, I’d have thought, would be the ones to look at publications now. If you look at the magazine printers there’s no reason they couldn’t actually publish magazines too,” he says. “But a lot of people just focus on the print and haven’t got the resources.”
Burton adds that any printer considering this route would need a similar level of prior digital experience to KPM. “People might be looking at the trend of magazines all going online and being wary of this. And they’d be right to some extent; you’ve got to have the cross-media skills.”
Potential pitfalls
Companies must get the balance right, with this sort of venture, between injecting cash but not draining the rest of the company, says Burton. “The DM part of the business needs to function and still evolve and invest,” he says. “So we keep a very close eye on how investment goes with the magazine. You’ve got to know which investments will work and which won’t. We are investing money on a regular basis, but the returns are going to be there.”
Top tips
- “You’ve got to have people at the helm of the company interested in publishing,” says Burton.
- Which publication you choose to take on is key. KPM chose FMJ because of the crossover with current DM clients, and because it realised how large, and so potentially lucrative, the facilities management sector was. “This wouldn’t have worked with all publications necessarily. We chose facilities management because it’s a huge industry.”
- “You’ve got to have a goal in mind almost three stages ahead of where you want to be,” says Burton of any significant diversification or investment push.
Burton’s top tip
“You’ve got to not be scared of doing something new, and to have imagination,” he says.
