The resurgence in direct mail marketing is showing no signs of slowing down. Ian Trevett spoke to David Vaughan, MD of Mailing Expert about the growth of the company, the future of direct mail and the implications of GDPR.
It’s all about the planning. If you have an idea, then a business advisor will insist you create a detailed business plan to map your future growth and development. But not always. Sometimes businesses almost start by accident - maybe after a redundancy or an opportunity that can’t be ignored. For David and Jenny, their respective businesses flourished as a result of enforced new starts and a partnership that was staring them in the face.
Tucked away in an Uckfield business park,
a two-storey office unit houses two very different, yet complimentary businesses. Upstairs Jenny runs a group of insurance brokers, while downstairs David has a direct mail company, Mailing Expert. Both are thriving, yet both would be first to admit that this wasn’t the plan!
For Jenny, owning an insurance company was the furthest thing from her mind, as David recalls. “Jenny was working as an insurance broker and 14 years ago she was made redundant. She said at the time she didn’t want to sell insurance, she didn’t want to employ people and she didn’t want premises. Now she has an insurance brokering firm, 18 staff and these premises.” What David hadn’t realised was that he would soon be sharing the premises with his own business.
“I started six years ago in September 2011. My working life had been spent in many of the larger mailing houses and printers in London and across the south east. When I was made redundant I was weighing up what to do, and it occurred to me I already had a potential mailing client - my wife.”
“I had already been doing her mail-outs. When she started out, we bought 100 names, printed the letters out on a home desktop printer and sent them out. We began by sending out 100 mailers a month and once the mailing got too much we used the mailing house where I was working. So when I started out on my own, it made sense to carry this on.
“Jenny had moved into a decent-sized unit in Uckfield, with her office upstairs and there was space downstairs that she wasn’t using. The idea initially was that I would create an in-house mailing operation for Jenny’s business, but very quickly other insurance companies starting to get in touch asking if we could do their mailing. Then we started working with local government and charities and the mailing side started to really take off. Now we send 100,000 proposals a year for Jenny’s business, and we have built up the customer base for the brokering company.
“I am effectively a non-exec director of Jenny’s companies and she is the non-exec director of mine. I do have insurance qualifications but I don’t get involved in the day-to-day running of the business.
“We chose the name Mailing Expert as it has a good connection with the insurance brand names. We have Mailing Expert, The Expert Insurance Group, PI Expert, Home Insurance Expert, and Kidnap and Ransom Expert.”
Although there direct mail has come back in favour, it has been tough environment for both mailing house and printers over the last few years, with many companies falling by the wayside. David was determined to make the business sustainable from day one: “The mistake companies make is that they quickly buy expensive equipment and take on lots of staff, and then get in trouble when business slows down.
“We didn’t have the aspiration to grow too quickly. We are not interested in being a print / mailing house for the AA - and are happy with the SME market. We started with an old printer we already had and waited until the demand was there before upgrading. So when a job came along that needed colour digital, that is when we invested.
“We haven’t got anything here that we rarely use - we ensure that the equipment we have has a genuine use. The profits we get we are put straight back into the company. We’d rather invest in the company than jet off to Australia at the first opportunity.
“Day one of the business was just me. Now we have four full time members of staff, but we have ten people we can quickly call in when we need to fulfil a big job. Sometimes we get staff in, other times we use home-workers, which particularly suits mums with young families.”
Mailing Expert is far more than just a mailing house, with expertise in general direct marketing including digital, and the team are always on hand to offer advice and consultancy. As strong as the company is on email marketing, David believes that it has its limitations: “Email marketing accounts for just under 5% of what we do. We do email campaigns but we usually advise that it works best alongside a physical marketing campaign. A typical campaign for an event or an exhibition, for instance, would see a physical mailing a couple of months before, followed by two or three email campaigns leading up to the event, just to remind people. Email marketing on its own isn’t always very effective.”
The reservations about email marketing do not represent a Luddite approach to new technologies. In fact, physical direct mail has undergone a revolution over the last few years. “Emails are great marketing if you are expecting them (such as a newsletter or offer; that you have signed up for) but are usually deleted within a couple of seconds if unexpected, whereas a physical letter will sit on your desk or on top of your mantel piece for weeks. The mailing industry is now very clever,” says David. “The post you receive has been targeted using the data received by companies, which builds up a picture of your buying habits.
“The Royal Mail have done a lot of research on mail responses and they have found that the demographic which most likes receiving post is actually the Millennial generation, as post is a quite a novelty for them and it makes them feel important.
“Our biggest clients are insurance brokers, charities and local government. For instance we might send out forms to update the electoral roll, recycling calendars or notices about changes in services. Recycling calendars can be quite involved as one street will have recycling on a Monday, the next may be Tuesday and so on. It is actually fairly easy for us as we batch print and mail sort it. It’s all about having the right systems in place.
“We are working on pre-Christmas campaigns now which keeps us busy until late November. The charities clearly get a good return as they pay for the printing, post and sometimes the actual list, but they return each year so it must work for them.
“When we do send unaddressed items, we only send single flyers – never as a bundled collection of leaflets that will go straight into recycling. For instance we often do small targeted mail-outs for local estate agents.”
So what does the future hold for the sector and the company?
“The future is strong for the sector, and it will become even more targeted and more intelligent. It will be more specific to the individual. You see gimmicky ideas come and go, but most of these go out of fashion quickly. If you get too complicated, people lose interest.
“For us, looking ahead for the next five years, I would be happy if we are double the size we are. We will need a new factory unit as we are out-growing the premises here. The key is to grow organically and not put ourselves in a situation where we are over-stretched. We are a direct mail company and that remains our bread and butter.”
In the next issue of Platinum Business Magazine, we ask David about the impact of the new GDPR legislation. Working in direct marketing, there can be few people better placed to give an accurate assessment of how the new legislation will affect businesses.