Anyone searching for the Go Inspire website using the Google search engine will find themselves directed to a company that describes itself as a Marketing Performance Partner.
This is because, chief executive Patrick Headley explains, the company today is much more than a print business. “Manufacturing is still the bedrock,” he says. And it’s a bedrock that continues to receive investment with new finishing capacity, Böwe mailing equipment and an upgrade to its HP PageWide T250 inkjet webs to print with Brilliant Ink, as proof of this.
Marketing communications remain core to the Leicester company. As the technology and needs of these customers have changed, so too has the business. It has grown out of the Colorgraphic direct mail printing business that occupied the same site during the 1980s when the focus was on direct mail print with imprinting using Scitex printheads.
It has evolved through different strategies into today’s Go Inspire business, generating revenues of £85 million with direct mail as the backbone. Headley has been part of the story almost from the outset, rising through the ranks until he took over from Robin Welch as CEO of the GI Solutions group in 2016. This already included a data management business and creative operation, but print on paper was still the main focus of the company.
“Manufacturing is all about price,” Headley continues. And as every printer has experienced, that price has been falling, as has demand for print, making growth through manufacturing a challenge at best. Growth, and profits, need to come from additional services and the business has to adapt.
Two years after taking over, the business acquired Eclipse in Kettering, almost doubling the size of the company at a stroke. Further deals are possible though not inevitable. “We have had two or three chances to make an acquisition. First we need to be comfortable about a bolt on deal,” he says. “Now we need a period of calm. 85% of takeovers do not deliver what is expected.”
Headley takes his inspiration for the strategic journey from a trip to the US in order to view some technology in action.
“We wanted to buy some kit from Vits and went to Fort Lauderdale in Florida to see it in action. The user’s factory was on a trading estate just like Scudamore Road, but with palm trees,” he says.
The operation of the factory was slick, but the inspiration came several hundred miles to the north. The same company operated an agency business with offices on Madison Avenue, the heart of the US marketing and advertising business. “The work from the agency is more profitable and when I was next in New York, I went to see the office. I took my lead for what could be done from that visit.”
Many manufacturing companies have tried to shift upstream, offering consultancy services as well as converting paper into printed products. Many have failed for not talking the right language and for remaining hooked on the heavy metal of a printing press and the attendant technologies. However, for those that can make the shift in balance towards becoming a marketing performance partner, there is a real opportunity. And this is driving the strategy for Go Inspire.
Headley draws a pyramid with manufacturing at its base, the foundation stones of the business. Above this comes the service level and at the apex of the pyramid comes the level where Go Inspire is talking eye to eye in the boardrooms of major brands about what constitutes the measure of success and about what the strategic objectives of the business are. The boardroom is where the discussion is furthest from price of a printed mailer and more about making a communication as effective as possible and where print is only part of the communication problem that a marketing performance partner can fix. This is where the greatest margins can be earned.
“We are well on the way to deliver this promise,” Headley says.
His aim is not only to climb up the pyramid but to change its shape. “We want to make the triangle square-ish,” he says. Currently if manufacturing pulls in 70% of revenue, services can earn 25% and the C-level consultancy brings in just 5% of highly profitable sales. The shape of his sketched pyramid changes as the block at the pinnacle becomes bigger, likewise the middle slice, which achieves a greater margin than manufacturing, spreads. In an ideal world this will become a square with revenue from each slice becoming equal. It is not going to happen, at least not in a hurry and not into a perfect square. But this sort of change is coming, helped by favourable winds that are now blowing against print management.
“Too many people do not understand the cost of print management. Hence we want to act as a lead supplier where we will only put a mark up on work that goes out, rather than the stuff that’s done in-house,” he says. The more work that Go Inspire can keep control of, the greater its margins and the more effective its advice can be. In contrast much print management is about logistics and a constant push down on costs. As a consequence, he says, “we are going to see more migration from print management deals to lead supplier arrangements.”
The big win in this respect was winning the contract to handle the communication account for BT as lead supplier, joining a similar deal for TalkTalk that has more recently been renewed for a further five years.
Print management, having squeezed every last farthing from print suppliers, has run out of room to offer value and its model is broken Headley believes. The future is about the lead supplier, where a business with a bedrock of manufacturing can produce at competitive rates and place what it cannot produce itself. “Too many people simply do not understand the cost of print management. We will only apply a mark up to work that goes out, not the stuff that is done in house,” he explains. “I think that we’re going to see a lot more migration away from print management to a lead supplier model.” He admits that price remains important. “We had to be aggressive,” he says.
In doing so Go Inspire has retained volumes of work that it was already printing through Eclipse which would certainly have been vulnerable should a business with its own capacity have won the account or subject to further pressure on price under a new print management contract with the emphasis on saving cost.
The BT work does not cover statement printing, falling instead under the label of below the line customer communications: acquisition, retention, regulatory communications and customer communication management. Lead management like this gives Go Inspire plenty of volume and is different to print management, tried previously by St Ives. It didn’t work, but that does not mean that Go Inspire, cannot. “The St Ives manufacturing base was very magazine led, that is very different to us in many respects. Our manufacturing footprint is very much about direct mail and transactional,” says Headley.
At the announcement, Ben Snutch, Go Inspire’s group sales and commercial director, said: “We have delivered many of these service lines to BT as a third-party provider since 1998 and we are delighted to have the opportunity to work directly with the BT teams and agencies.
“I’m confident that in doing so we can prove ourselves as a forward thinking strategic partner who understands the broader trading position and play a key role in helping BT to meet strategic objectives for customer comms.”
This falls in the remit of the company’s Star proposition, referring to “Strategies that Target key audiences to Acquire and Retain”. This combines data, programmatic mail, single-customer view, tracking all interactions between Go Inspire’s clients and their customers, regardless of channels, with the aim of optimising conversion rates and marketing ROI. Or more simply, as Headley puts it: “It’s about the right message, at the right time to the right person: get that right and the chances are that people will buy,” he says.
“Where we are finding favour is that we can make promises that are deliverable.”
Its ability to deliver across print and digital channels is being helped by a movement within brands to bring together the different and previously segmented marketing departments into a more holistic message, removing the silos that have concentrated on digital marketing, television advertising, direct mail and more. “These departments are now talking to each other,” he points out. This will open the way to greater integration between the different media channels and a greater search for the effectiveness of how budgets are spent.
He continues to explain that there is a growing awareness of how much money is wasted in digital advertising, and just how ineffective banners and emails can be. This realisation was something heightened by the experience of the last year. Adword driven marketing is proving to be equally ineffective even before upcoming legislation to disrupt the use of tracking codes to deliver targeted digital advertising.
The company has put the research together in a downloadble report What a Waste, to highlight the amount of money being wasted on paid search. It stems from not having a 360º view of each customer, treating everyone as a new prospect even when already engaged, pushing brand name advertising to people simply looking for a website or using paid search when other channels would have been most cost effective and equally effective. “By reinvesting the spend that is currently being wasted on paid search, marketers could improve their ROI by 15%, which is signifiant given the large sums of money we are talking about across several markets,” the company says. The total wasted spend amounts to £728.9 million in 2020 says Go Inspire.
At the same time as questions are growing about the effectiveness of Adwords and other forms of digital marketing, print is gaining acceptance, particularly when it becomes measurable and when it links to the web.
Headley highlights where this is happening: “The email box is one channel for marketing, so is the traditional mail box. Door drops and leaflets (products from Eclipse) are here to stay. Right now there’s not too much competition with door drops, and the medium has become more responsive. Some are even calling the printed door drop The New Media.”
It follows on from the return of the printed book, something underway before Covid struck but where sales have reached record levels in the last year. Print is back in favour, provided it is simple and responsive says Headley.
The chosen tool is increasingly the QR code. The simple matrix mark has been around for many years, but in the past 12 months has appeared everywhere as part of the contact tracing efforts to control the spread of the virus. Consequently people understand what to do with a QR code.
“On one recent campaign, TalkTalk has found that 55% of the responses it received had used the QR code,” he says.
The implications can be extensive, going beyond helping customers reach the section of the website with their account details or where the offer resides. With much marketing material the consumer is stimulated to go online to make a purchase, but there is no direct link between the printed page and the website. As a result the customer tends to head to Google to enter a search for the company name. This exaggerates Google’s role in the marketing process. “Something has stimulated the consumer to go to Google in the first place. The company has spent a great deal on Adwords and believes this has been responsible for the sale, but it is not necessarily the case,” Headley explains.
What is indisputable is that retail patterns are changing in favour of e-commerce. The announcements of store closures during lockdowns is indicative of a trend that is accelerating but was already in place.
This is changing habits, including for how the Headley family shops. “The announcement that John Lewis is closing its Peterborough store means that I will not go to Peterborough and the decline of the high street will continue,” he says.
Online is the beneficiary of course with marketers therefore striving to capture eyeballs for their websites and stores. The QR code is one way to move a person from a message to the online check out. Their presence on a website, flicking through pages of products, using online to browse before committing themselves to a purchase. This can stimulate a piece of print, arriving a couple of days later, aiming to clinch the sale. And that piece of print will be viewed a number of times in a week, repeating the message each time.
This is where the data side of what Go Inspire comes into place. It helps understand what motivates a shopper’s action and to understand what offers will be best to close the sale. This may be on print or digital. Effectiveness is the most important measure, not whether something is printed. “We are using data to help the sale take place,” Headley says.
This has meant investment in the right people. The groups employs 400, 100 of whom are data scientists. This is a number that will surely increase as Go Inspire evolves and expands. Headley reckons that sales of £130 million are possible with the greatest growth coming as the company squares the triangle.
