The direct mail sector, like much of the printing industry, can’t claim to have had the easiest of times in recent years.
It remains, however, a profitable market for operators with the right approach, and it is one that David Wright is optimistic about.
This January his employer, Taylor Bloxham, launched a new division dedicated to direct mail, Mailbox, and Wright’s job is to make a success of it. From outside print, that might look like a big ask. This is a digital age after all and marketing professionals might be expected to keep clear of paper and ink altogether and head for the trendier climes of the internet.
However, Taylor Bloxham’s new division was set up in response to rising demand and specialises in a range of direct mail services including high-speed multi-insertion, collation and data management. For those who insist direct mail is on the way out, Wright says: “long live direct mail”. But if banking on DM is a risk, so too is launching a division that may not achieve recognition quickly enough, or acceptance at all.
“As companies grow and develop, so must their various departments and divisions to serve different needs and functions in the market,” explains Wright. “Starting a new division is an exciting experience because it is an opportunity to create something out of nothing, with a new reach or direction and potential for fresh recognition.”
Taylor Bloxham was founded 80 years ago and has gone through a fair amount of development since. Today’s B1 sheetfed litho powerhouse, led by chief executive Robert Lockwood, was launched in 1938 by Herbert Taylor, a compositor, with machine minder Harold Bloxham. One of Taylor & Bloxham’s early successes was winning the job of printing Army Pay Corp books during the Second World War. Today, the company has four divisions, 200 staff and a turnover of around £30m.
Launching the new DM division was not purely a case of building something out of nothing. One of the Leicester-based group’s existing divisions, FastAnt, used to handle direct mail as well as storage and distribution. The new division would mark a split: Mailbox would take the lead on direct mail, while nearby FastAnt would follow up with fulfilment and e-commerce.
“FastAnt was launched a decade ago on the back of client demand,” says Wright, who joined Taylor Bloxham three years ago from a DM background. “We used personalised mailings to add value to printed magazines, for example, and this evolved into direct mail. As this side of the business gradually grew, it became clear it needed a new identity.”
Furthermore FastAnt as a brand name was “not that clear and did not lend itself to direct mail”, he says. The company decided to rebrand to give focus and prominence to a market facing volume challenges and further volatility caused by the General Data Protection Regulation (GDPR) and the need for businesses to overhaul their processes to avoid the risks of violating the rules.
“The market is not necessarily growing and could be better. But for us it is fairly buoyant.
“Although volumes are forecast to drop, thanks in part to GDPR, where we sit in the market is not faring badly – the kind of conventional mid-volume litho printed mailings with mono personalisation favoured by charities, retailers and financial companies. GDPR could in fact help us by bringing down volumes and pushing them in to the kind of numbers we are efficient at producing.”
First, Wright and his team had to launch Mailbox. While rolling out a division is in many ways easier than starting from scratch and launching a new company or subsidiary, creating a new business arm can come at the expense of your company’s core value, he says. Meanwhile multiple divisions can dilute key messages and overall performance.
“For us, launching a division made lots of sense. In our case it meant moving existing infrastructure from the nearby FastAnt base to our new one a few miles away also in Leicester, rather than creating more or new infrastructure. We could also plan the move over several months, as opposed to having to turn off the lights in the old building on Friday afternoon and switch them on in the new one on the Monday morning, which would have been a challenge.”
As a salesman, Wright was not involved in the day-to-day process of relocating, but there were plenty of logistics and legal experts within Taylor Bloxham to help smooth out what could have been a bumpy ride in moving kit and then launching a new division. Mailbox runs two Xerox reel-fed duplex laser printers, a Canon sheetfed machine and enclosing lines.
The “piecemeal” moving of 28 staff staff and their equipment ensured the premises overlap went seamlessly and with minimal affect on revenues. Perhaps, adds Wright, the word “seamless” is not quite the right term for the heavy work of shifting equipment and teeing up all the utilities. But in terms of client delivery and non-disruption to services it was “as near to seamless as possible”.
Having plenty of in-house expertise is especially crucial when launching a direct mail division, he says: “We’ve been doing this a long time and know what we are measuring. Having so many experienced hands helped: DM production can involve hundreds of variables affecting output speeds, such as spec and weight of materials, number of cells, number of operators required, run length and postage tariff. Any combination of these variables affects the cost of the product.”
Since the launch of Mailbox on 1 January 2018, the journey has lived up to the “excitement” predicted by Wright. “It’s been a challenge, but big challenges happen when you rebrand and start a new division, especially in a business like ours, which itself is facing so many challenges and so much change. It’s unkind to say we’re doing DM better than FastAnt, but we are doing it differently.
“We have a much clearer view of where we are and want to be. I think goals and ways of working can become quite convoluted when you try to offer too many things under one banner. You risk becoming a Jack of all trades and master of none. Having two identities has enabled Mailbox and FastAnt to concentrate more clearly on respective remit, product, infrastructure and delivery.”
Such purpose and clarity of vision is matched by the numbers: Mailbox is on course to hit £5m turnover by the end of next year; it currently stands at around £2.9m and will close at about £3.6m at the end of this financial year. Wright is expecting growth of 25% and for now his fledgling division will continue to target the mid-volume market.
It recently added two enclosing lines to take the total number to four: two Buhrs’ C4 BB300 machines, a CMC high-speed model and another high-speed line, a Sitma SM8. But every investment is a potential risk and, as such, involves much scrutiny and number crunching.
“Our market is quite buoyant but fragile. Demand can fall of quickly and in a scary way. We set ourselves a £5m turnover target and although optimistic, it is very achievable. We will look at new technology as and when we need to, but my job is to make sure we keep delivering value with sustainable overheads. This ensures we can take whatever the market throws at us, be it through Brexit, declining volumes, or even a wider cyclical recession.”
He concludes: “We have an ethos to remain a sustainable division, and part of that is being realistic that DM is a steadily, if marginally declining, market with exposure to factors that could massively affect demand. But by launching a division dedicated specifically to direct mail, I think we given ourselves the best chance of success, and know we are resilient and robust from top to bottom.”
Inspection host Sales director, David Wright
Size Group turnover: £30m; Staff: 200
Products As a division of Taylor Bloxham, Mailbox provides a range of direct mail services including high-speed multi-insertion, collation and data-management services
Kit Mailbox runs two Xerox reel-fed duplex laser printers, a Canon sheetfed machine, four enclosing lines including Buhrs, CMC Sitma models, inkjet lines and folding machines
Inspection focus Setting up a new division
Plan, plan, plan Write a business plan, tee up financing, making sure you don’t under-budget, and get professional help from lawyers and tax experts
Build the best team Taylor Bloxham recruited DM expert David Wright to head its division who then built a team of “professional expertise and entrepreneurial instincts”, he says
Don’t rush Giving yourself plenty of time puts your new division in the best possible place to enjoy success and prepare for a hitch-free grand entrance into the market
Set goals “Setting goals and benchmarks will help your new division understand expectations,” says Wright. “Go for quantifiable, realistic and optimisitc measurements.”