However, she’s also a realist. She knows that volumes are in structural decline and that the channel is facing a whole host of challenges, internal and external. But – and it’s a big but – she firmly believes there is massive opportunity in making direct mail sexy again.
And as anyone who has met her would attest, it would takes a brave man (or woman) to argue with the straight talking, cigar smoking, proud Yorkshirewoman.
Darryl Danielli You’ve got quite the background in direct marketing, how did that come about?
Judith Donovan Well, because I’m a Bradford lass. After university I came down here to work in the car industry, because I’m also a petrol head, but I didn’t like the south. I wanted to go back up north, so I got a job as advertising manager at Grattan, the catalogue company, and at that time in the 1970s – yes, I am old – the only people doing direct marketing were the mail order companies. So, I fell into this thing, that wasn’t even called direct marketing in those days, it was called direct response, because there weren’t any lists or mailshots, it was all adverts with coupons in them.
So, a great time in terms of testing new ideas?
Wonderful, wonderful. I knew what worked; it was fantastic. Back then we used to employ students to go around townhalls to manually copy the electoral roll, because nothing was on a computer back then. I was very lucky and spent five years there and they basically gave me a tonne of money to learn a whole new discipline, just as it was coming into the UK marketplace.
But they gave you a tonne of money, because direct marketing worked.
Correct. And I was doing a very good job for them, as they said in all of my annual appraisals. But I couldn’t go any higher. There were no women in senior management, it was company policy. Every year I went through the complaint procedure, and every year my complaint failed – because companies could do that in those days.
Yes, the world ain’t half changed [Laughs].
Is that why you went and set up your own agency?
Exactly. I walked out because I was so fed up. I’m also too arsey to work for someone else [laughs]. So, I set up a direct response consultancy. I actually thought my market was going to be above the line advertising agencies who needed help in direct response. But, of course, agencies were so bloody arrogant that none of them were ever going to buy my expertise and what I actually found was that my clients were smaller companies that had heard about this [direct marketing] thing and wanted to have a go at it.
Client direct then?
Yes, and nearly all mail, because by then direct mail was starting to emerge and Royal Mail in particular was starting to promote it. So, then you had all of these small firms saying that the Post Office was telling them to try this new [direct marketing] thing, but how did they do it. And of course that’s where I came in.
It’s amazing that it didn’t really exist before then?
People were doing it ad hoc, there were probably small mail companies doing it in the 1960s and 1970s, but the difference was that I don’t think it was an acquisition tool then. The switched-on direct marketing companies were using it for retention growth, but weren’t really using it to find new customers because the lists weren’t there, the targeting wasn’t there. Then door-to-door came along, because Royal Mail launched Household Delivery Service in 1981. I think I was the very first user at Grattan. It’s now Royal Mail Door to Door, which is a much more sensible name, because they already had the postmen going to every letterbox, and you didn’t need to know that Mrs Donovan lived there, if you knew it was the right sort of house.
Almost like partially addressed mail now then really?
It was, except that there wasn’t the targeting, you bought by postal sector, say 2,000 houses at a time, but even so you knew it was going to the posh end of town rather than the rough end. That got companies thinking about the letterbox as a channel that you could push things through, and then people started thinking ‘what if I could get hold of a name’, then early computers came along and all of a sudden you got computerised lists. Bob’s your uncle.
So how long did you end up running your agency for?
20 years, it ended being the second oldest independent direct marketing agency in Britain. Lots of people started after me, of course, and it really took off in the 1990s. I sold it to my staff in 2000.
Is it still going?
No sadly. They sold it on again, I’m told for a lot more money than they paid me [laughs]. These things happen. They sold it to the Millennium Group which was a group of DM businesses in the north of England around 2006, but in 2008 the main group went bust. But it wasn’t my agency by then, it still had the name, but most of my staff had gone. I’m not crying crocodile tears, that was then, this is now. But that’s how I became, I suppose, an industry player – because it was a very young industry and I helped it to grow up. I was one of the founders of the DMA and merged four trade bodies together, which was quite painful.
Was this in the early 2000s then?
Oh no, this was around 88 to 92.
So, while you were still running the business?
Absolutely. Because I was an agency owner, I felt I needed to be part of the bigger, wider game. I was speaking at all the conferences and that sort of thing, so it made sense to be involved. It was fascinating, though, to look back at the power the mailing houses and printers in those days. They had their own trade association, and we bought them together with the advertisers, the list owners, and the agencies to make the DMA. They ended up with 50% of the board seats on the DMA, because they were seen as powerful. They were generally quite large companies, had a lot of capex and were quite pioneering. The agency world was quite fragmented, list brokers tended to be quite small.
And now the power has shifted to the agencies?
Well, it’s certainly no longer with the printers.
So how did The Strategic Mailing Partnership come about then?
Oh lord, you’re jumping a long way ahead now.
What have I missed out then?
There is a journey and it’s quite important. In 1997 myself and The Lettershop set up DMA North, because we felt that the DMA down here was getting a bit poncey and a bit agency-fied. And of course, most of the [DM] printers were in the north of England. In my day West Yorkshire was the second largest print centre in the world, after Chicago. But we felt that the London thing was getting a bit lovey, the production side was losing the profile and respect.
Because London was the centre of the agency world?
Exactly, and the printers and the mailing houses were seen as a little bit yesterday. So, we set up DMA North to counteract that. Through that I got a lot more friendly with the mailing houses, because before that I didn’t really know them. Why would I, I had three print buyers – that was their job. But when I got to know them that was when I discovered all the frustrations that they had with Royal Mail, which I hadn’t realised before. They were the ones that ship the mail into Royal Mail to feed that pipeline, but they had no power and no influence, because they didn’t pay the postage bill. Back then Royal Mail had the old-fashioned linear business model, and just looked at who paid the bills – Abbey National or Lloyds Bank or someone. They didn’t listen to the printers, there was this massive disconnect and that started to engage me, I was interested in it. So, I had three years of that [DMA North] and then I sold the business. So, there I am in 2000, footloose and fancy free and I thought I would be like Drayton Bird, wandering the world giving seminars. It didn’t happen, I think I did two.
So, what happened?
Well, Tony Blair massively expanded quangos and somebody woke up one day in Whitehall and went ‘Oh shit, where are all the women, the northerners and the entrepreneurs?’. They had appointed all these pale, male and stale blokes from within the M25. So, they started looking in their filing cabinets and found me, because I had been doing a lot of that sort of stuff in Bradford. I chaired the Training and Enterprise Council, I helped launch Business Link and was the first female president of the Bradford Chamber of Commerce. So, I was fairly high-profile locally. Then I started getting all these phone calls asking if I wanted to join this, join that. There was no interview process in those days, it was just a phone call. Within about a month I found myself as a Millennium Commissioner, which given that the dome was about to open was an interesting time [laughs], the first ever small firms’ Commissioner on the Health & Safety Commission and vice-chair of Postwatch [the consumer watchdog for postal services]. So, I was number two at Postwatch because of my bulk mail background. As part of that I was made chair of Postwatch in the north of England, which put me back in touch with all my mail mates – so there I am back in my old territory but with a statutory duty, set up by parliament, to speak on their behalf about things that weren’t going well [with Royal Mail]. Postwatch was a brand-new organisation, so it was softly, softly to start with as my chair felt we had to cover all the basis. He didn’t want me to go in day one and say that mailing houses matter more than anything else, for example. But after a couple of years I said to my chair that I would like to create an informal group of mail producers because they weren’t being heard by Royal Mail and were being treated quite badly. I used to describe them as the canaries down the mine shaft, these were the guys that would tell them, before anyone else, if something was going wrong. So, I felt [Royal Mail] should make love to these people, not fine them, piss them off, try to bankrupt them.
So, I formed this advisory group of mailing houses, with my mail mates and others, and after a while I managed to get Royal Mail to think I was doing something quite interesting. I even managed to get Adam Crozier [then CEO of Royal Mail] to come and meet them, which was quite something. Fast forward a little bit and the government closes down Postwatch [around 2008, when it was merged with a number of other organisations to create Consumer Futures] and we were all out of a job. Now, I only found this out later, Postcomm [which oversaw the quality and universal service of post in the UK] was about to announce a vacancy for a Postcomm commissioner with a bulk mail background and they were very minded to ask me to apply, and from what I understand someone from there went to Adam Crozier and asked him if he wanted me to be the next Postcomm commissioner and, as I understand it, the response was ‘Fuck no, hire her’ [laughs].
It’s what I was told anyway. Who knows. But anyway, I was asked if I would like to become a consultant to Royal Mail, speaking on behalf of large customers, large users and the producers – basically the areas where they felt they probably didn’t have as a good a relationships as they should. So, I went in 2008, got passed around various parts of the business doing bits of consultancy here and there. And in 2009 I met Jim Bulmer, who was running a sort of mailing houses club in Royal Mail. He was Royal Mail man and boy, so he didn’t have the external contacts, but he did know the organisation very well. We met, got on like a house on fire and still do, and we decided it was worth taking his forum, I think he called it, and reboot it into a proper representative body of mailing houses that could, if you like, speak truth to power, and talk to Royal Mail in a much more senior, much more official way. We worked on the proposals and then sent them to Mark Higson [the then managing director of operations and modernisation] and we got the approval in 2009 to launch it.
And The Strategic Mailing Partnership was born.
It was, that was the journey, and this year we celebrate our 10th anniversary. I would never have expected to be spokesman for printers, I’m an agency person, I’m a copywriter, I had people buying print for me [laughs]. But here I am. And it was incredibly funny to be featured in your Power 100, I would have thought I was more likely to be in a list of 100 agency bosses that people can’t believe aren’t dead [laughs].
But people in the industry talk about you being a passionate advocate for the channel?
Oh, I am. And I’m an advocate for mailing houses, because I think they’ve had a raw deal over the years.
So, what is the SMP’s core purpose?
Speaking truth to power. Telling Royal Mail about the challenges of producing mail packs, the external market challenges, GDPR all that stuff, and the internal challenges – Royal Mail’s rule book. Can mailing houses comply with it, have they casually changed a rule that means you have to spend £100,000 updating your software. The best example of this is Mailmark.
How do you mean?
Very early on, when Mailmark was a tiny twinkle in Royal Mail’s eye, they came to us to say that they needed to talk to us. All the way through the four-year development process of Mailmark, SMP was involved at every stage, trials were done on members machines, there were lots of sub-committees. Now I’m old enough to remember when Mailsort came in – that was announced on the Friday and came in on the Monday. So, Royal Mail has come a long way.
So, it’s almost like SMP is a sanity checker for Royal Mail?
Exactly. A lot of this is technical stuff. It can’t just make changes in isolation, it has to look for the knock-on effects, not only for its own processes but also for the people that are trying to feed its pipeline, because if it introduces a rule my members can’t comply with, 24-hours later that pipeline is empty. So, we’re very much about speaking to truth to power. Some of my board members probably know more about how Royal Mail works than the Royal Mail does [laughs]. It’s a very technical area, and in that sense the Royal Mail ops people, who are very good, and my members should be absolutely aligned.
You mentioned ‘speaking truth to power’ several times, but the Royal Mail effectively finances the SMP – so how does that sit?
They pay for it entirely, which I’m not unappreciative of.
But then surely you have to sometimes push back against the organisation that pays the bills?
It hasn’t been an issue – I think because it’s me that’s sat in the middle as a trusted third party. For example, I won’t always take something to Royal Mail if I think someone’s just having a bit of a paddy, or if an issue is very specific to them that nobody else has raised. So, the Royal Mail knows that when I go to them it’s kosher, it’s a genuine issue.
What are your goals then, what do you want to achieve?
We need to help the sector get through a very challenging time. By the sector I mean my members and Royal Mail. Get the confidence back in the medium and the goal I’ve always had is bring back the craft. Because what I get through my letterbox is crap and it could be so good. It could be interesting from a production point of view, we could have decent copywriting and art direction – these should be things of beauty!
Speaking to the producers though, a lot of them have highlighted the churn in their clients’ marketing departments and agencies and how that makes trying new things harder?
It’s very difficult. Sometimes they’re dealing with procurement, or it’s an e-tender. The majority of SMP members have highlighted how difficult it is for them to have a one-to-one conversation with a person, as opposed to going through lots of layers, that they can influence over something like a sexy pack.
What are the members’ other key challenges then? What keeps them awake at night?
Probably not going bust, at the moment. It’s sector that’s had a lot of M&A and bankruptcies in recent years and it doesn’t look anything like it did when we set the SMP up. It’s a difficult sector to survive in, but there are survivors and there are those that are also thriving. Just look at your awards – not just for thriving DM printers, but thriving printers in general. There’s no such thing as the status quo, business as usual at the moment. But I think every business in Britain would say that, with Brexit. The only certainty is that you can’t get up in the morning and do the same thing you did yesterday. That doesn’t work in our industry, you have to be very nimble, you have to be constantly looking for opportunities and you’ve got be quite techie too. If you look at our industry it’s gone from analogue to digital in one generation, you’ve got to understand completely different technologies and what you can do with them. We’re very bad at succession planning and training.
That’s manufacturing industries all over though isn’t it?
I think some are better than others and other industries have got much more behind the idea of apprentices. Just look at the average age in the industry, it’s an ageing cohort and its only getting older. We need to reposition print as not an old-fashioned thing, but as a new tech. I just don’t see many printers thinking like that.
And are input prices a problem, clearly things like paper are only going up, but mailing houses also talk about Royal Mail biting the hand that feeds it every time it puts up its prices? After all, postage prices go up and volumes go down.
Yes, you can see that there are lot of knee-jerk reactions from clients when prices go up. But I think that the industry is missing a trick there, actually. Yes, the prices are going up on the postage side, it is unfortunate, but Royal Mail is in a cleft stick. It is regulated, it has got declining volumes, it’s trapped in the USO, so there are an awful lot of things not of its own making. But in my day postage was a third of the price of a mailpack, I believe it’s now around 60% – so in that situation, why don’t you want to make every pack work as hard as it can. It’s like the old story of the man and his cart.
I don’t know that one?
Well, he realised that his biggest cost was horse feed, so he fed it 75% of its food and that was alright. So, he did it again and started feeding it 50%. And he carried on until he didn’t give the horse any feed and it dropped down dead. That’s what’s happening with mailpacks as people try to reduce costs, they send less in the pack, use cheaper papers and I think that’s the wrong way. If production is only 30%-40% of the costs, sweat that and make the packs interesting.
That’s ultimately up to the client though, isn’t it?
Yes, but someone has to flag the idea up, make them aware, if the client has never thought of it.
But surely an organisation like Royal Mail could do that?
But show me anyone in the Royal Mail that has the same level of understanding of advanced print. You need someone who understands it to demonstrate what it can really do. The Royal Mail’s weight breaks are quite generous. 100 grammes, show me a mail pack that is more than 100 grammes. You can do a lot with that and not pay any more postage, we as direct marketers know that the more pieces of paper in a pack, the better the response. The printers are the ones that know, they understand technically what you can do with digital and personalisation and the rest of it, and as far as I can see too often, they still treat it as a commodity. Whereas they could be saying, ‘look we know how much you’re paying in postage, would you like to see how we can make your packs work much harder?’ I don’t see that happening, as a sector?
But individual companies are?
Of course, people like Lettershop and Go Inspire and others, but there are too many still doing what they did ten years ago.
Do you think that’s where things like JICMail could help?
To be honest, I don’t know. The jury’s out. It’s absolutely the right thing to do, we have to have a measurement of the medium that compares to how every other channel is measured, no question. The hope is that it becomes a tool for the media planning agencies, and that’s the bit that I’m not sure will happen. I hope it does. But I don’t see it as an overnight saviour, we have to save ourselves essentially.
It is a slow burn, and launching around the same time as GDPR probably didn’t help?
No, it didn’t. The industry has had a torrid couple of years in terms of external factors.
Do you think GDPR was as bad as that then, some people talk about it as being an opportunity?
It wasn’t just GDPR. I think what got lost in the noise is what has happened to the charity sector, which predates GDPR. It goes back to Olive Cooke and the creation of the Fundraising Regulator and the big fines that some charities were handed by the ICO under the old Data Protection Act. Well before GDPR hit the streets, the charity sector was getting quite cowed and they haven’t come back. We did a charities workshop a few weeks ago and got 67 charities in the room, to dispel some of the myths around GDPR, they got it, but they all said it doesn’t really matter as their trustees won’t let them use mail.
It’s interesting that mail got dragged into this…
And that really hurts, because charities were around 20% of the bulk mail sector – I think that hurt a lot more than GDPR. In terms of GDPR it hurt some more than others, but again anecdotally we’re hearing that those that stayed true to mail, or have come back to it, are getting record responses. Because there’s less mail around and the lists are so clean.
What do you think are the big opportunities for mailing houses?
I think it’s very much about shouting much louder and walking much taller. Print has changed the world in so many ways. Shout about how sexy a pack can be and also about how we’re a high-tech sector with high tech solutions. An old friend of mine who used to run a mailing house described his business as the humpers and lumpers, well I think some people still see the sector as that and some are happy to be seen as that. But this is aerospace, this is advanced engineering and we need to position themselves like that.
Because if we talk ourselves down, then people look down on us…
Exactly. It’s not rocket science.
But do you think the fall in mailing volumes will accelerate? I think in the last quarter mail volumes fell by 8% against a forecast of 5%...
When Royal Mail floated, it, quite rightly, identified the structural decline of the market.
But do you think it’s going to stabilise?
Yes, the recent additional decline was GDPR related. In the flotation Royal Mail talked about structural decline of around 4%-5% per year, and that’s what it’s been – until GDPR, which caused it to go up to 8%. But I think it will go back to 4%-5%.
Do you think it could down to zero at some point then?
No, sadly, but it could be a hell of a long time before it ceases to be there. It will be different, and it will never be the volumes it was before, it can’t be. We’re never going to get back to the second half of the 1990s when mailing just went mad and you could buy stickers for your letterbox saying, ‘No Junk Mail’. There was such a consumer backlash then that people were predicting the end of the channel – but it just reinvented itself. I’m a great believer in additionality not substitution, we have a very binary view that when something new comes in it replaces what came before. Email can’t do everything, mail will always exist. Obviously, it will change, my personal view is I suspect the USO will have to get more flexible. It probably is unreasonable to say six days a week when you haven’t got the volumes to sustain it, so maybe it goes down to four-days a week or something.
Last question then: are you optimistic for the future of DM as a channel?
I’m not pessimistic.
Is that as good as it gets?
I know it sounds like a politician’s answer, it’s not meant to. I am optimistic, but it’s too two-dimensional a word. If there’s a scale of optimism then I’m definitely on the scale, but I’m not 10-out-of-10.
Because there are still unknowns, Brexit, the economy, regulations etc?
It’s more than that, it’s society. I just don’t know what’s going to happen in 20 years’ time with this generation that has grown up with a third hand, because they just function completely differently don’t they?
But I suppose that’s what we talked about earlier, turning negatives into positives, and this why a piece of mail has such an impact…
That’s true. And we know millennials actually like getting mail, because they get so little, so it’s an event. There will always be print...
It’s just changing…
And it’s been changing for hundreds of years. There will always be print, there will always be letterboxes and there will always be addresses – so that marriage is there, it might just very different from the one I’ve known.