The challenge

It’s a record others may well struggle to beat. Just the other week, Birmingham-based print and mailing house Baker Goodchild received files from a customer at 3.55 one afternoon and had all 10,000 letters printed and in the post by 5.30.

“That was a massive moment for Baker Goodchild. The client was over the moon that their mailing went out in time,” reports managing director Lorraine Burnell.

The firm, established 19 years ago by current chief executive Bruce Thomson, has always prided itself on rapid response, with the whole facility geared up to accommodate last minute orders. But, before last May, there was a slight hitch in the system when it came to payment.

Baker Goodchild’s policy, explains Burnell, is to only mail out work once payment has been received. This, she explains, is vital to Baker Goodchild’s health as a business, and indeed to it being able to invest in the very infrastructure that allows such last-minute, quick-turnaround orders. 

“It’s company protocol and we pay our suppliers straight away too,” says Burnell. “We’re very tight with cashflow, and very tight with stats. So we always open the week knowing where we are. By keeping such tight tabs on our cashflow we can go to manufacturers and suppliers and ask ‘what deal can you do for me?’ So, having a clearer view of our accounts and a good cashflow has helped us invest in new machinery that gears us up for quick turnarounds.”

The problem, however, was that the two policies of payment upfront and reinvestment for rapid response, though good in theory, didn’t always quite work in practice. This was because when paying by the standard methods of Bacs or cheque, clients, depending on their banks, couldn’t always get the money to Baker Goodchild in under three days. This obviously doesn’t work where the client is ordering mail they want posting within the next day or two.

“We were selling to people, there was no problem with the quote, but then when it got to the finance stage people were saying ‘I can’t get Bacs to push this through any faster,’” explains Burnell. “We were finding that was becoming an issue, with some of our clients using our competitors as a result.” 

Burnell adds: “We hold monthly customer service calls and the majority of our calls came back saying ‘we’d really like you to have a credit card service because it’s a fast-turnaround business’.”

The method

Such a service was exactly what Burnell set about investigating last May. “I sat down and spoke to our bank manager and she said to use Barclaycard,” says Burnell, reporting that getting a business-to-business credit card payment system up and running was just a matter of half an hour’s training, which Burnell then passed on to staff in the company’s finance department. 

“We’ve been with Barclays for the last five or six years, and we’ve been really impressed with them,” says Burnell. “They give brilliant customer service – I just need to ring my bank manager and she’ll be straight in to talk to me. So she’s really good.”

“We had a little web link sent over,” explains Burnell of setting up the credit card payment facility. “We can use that over the phone with clients. We feed in information they give us over the phone and that’ll be processed straight away. It’s very user friendly.”

Then it was a case of marketing the availability of the service to the company’s current and prospective customers. “You have to market it to your clients, let them know that you have the facility,” says Burnell. “Otherwise they might not know you take credit card payments until you send an invoice over which would be too late when you’re winning new business. It’s a real selling factor with new business.”

Of course the company doesn’t want to push this too aggressively. Some customers do still prefer to pay with Bacs or cheques, reports Burnell, and that’s just fine.

“About 15% pay with cheque, 65% with credit card and 20% with Bacs,” she reports. “I know a lot of businesses, like here when I first started, prefer two sign-offs to ensure the right payment’s going out. Some finance directors still prefer being given all the paper work from their finance managers to say ‘that’s what’s going out’. A lot of government bodies and larger businesses still do that.”

And the company, while being fairly strict on this, does try to be flexible on the payment upfront policy where possible. “As a company we would review that, we’d look at their credit report and see if we could do that. We wouldn’t want to lose a client over it,” says Burnell.

The result 

It’s safe to say the result of this card payment system, and Baker Goodchild’s overall financial and investment strategy, has been pretty phenomenal. 

Customers have responded very positively, reports Burnell, not only because it allows them to order fast-turnaround mail, but also because it can be handy in delaying the money leaving their accounts until the end of the month.

“It gives customers more time, whereas with a Bacs payment the cash comes out of their account in three days. We’ve found that clients are liking that,” says Burnell, adding: “Pretty much all customers value the card system. Printing companies are a key client base and a lot of them wanted that facility.”

She adds: “From 2010-2013 we’ve increased our new business sales by 65%. This payment system is definitely one of the key factors.”

Indeed the new system is such a key factor because of what it has allowed the company to do. Sticking to its strategy of keeping cashflow strong with upfront payments has come particularly into its own over the past year in terms of kit and staff investment.

“This means we can grow the business faster. Over the past four years we’ve invested in three new Kern machines, an extra polywrapping line, a folding line, brand new Ricoh printers and brand new desktop PCs for the whole business,” says Burnell.

“We’ve also doubled our staff in every department, to be able to factor in extra hands if a client rings and says they need a mailing as soon as possible. And we’ve really spent a lot on training over the last few years.”

Having more customers pay by card has also enabled the company to better utilise its finance team, with staff no longer potentially chasing invoices that have in fact been paid but aren’t showing up until after the three-day Bacs processing period.

“A lot of people don’t send a remittance when they’ve sent a payment. They could be doing Bacs payments for 50 or 60 different companies so it would be very hard for them to always send something over,” says Burnell. “So this really cut down the man hours of chasing payment. The hours we’re not spending on credit control we’re putting back into the business, looking into new suppliers, looking at the jobs we do, making sure we’re sending all jobs out to 100% spec.”

Really showing what a strong position Baker Goodchild’s in, is of course the resulting sales graph. 

“From 2010-2013 our turnover has increased by 50%,” reports Burnell. “We’re now at around £3.8m and have budgeted to hit a big target this year. There aren’t many businesses out there that have increased their turnover by 50% through a recession. And this payment system is definitely one of the key factors.” 

Baker Goodchild

Vital statistics 

Location The Jewellery Quarter, Birmingham

Inspection host Managing director Lorraine Burnell

Size Turnover: £3.8m; staff: 40 

Established 19 years ago by Bruce Thomson, who became chief executive last year when Burnell was made managing director

Products A range of mail products, including enveloped and polywrapped letters, magazines, brochures and catalogues

Kit Five Ricoh mono printers, Xerox 6060, Pitney Bowes 75F inkjet, Pitney Bowes 95 inkjet, Pitney Bowes DI600, Pitney Bowes DI880, Domino inkjet, Rena inkjet, Sharp MX 5500N printer, three Kern 2000s, MBO folder and other finishing kit

Inspection focus

Offering customers the facility to pay for a job upfront by credit card to support a system of payment before printing, and in turn ensure a healthy cashflow for Baker Goodchild

DO IT YOURSELF

Following suit

Many printers might not have rolled out credit card payment yet, feeling when it comes to finance, tried and tested processes are always best. But Burnell is adamant the system is so user-friendly and effective, that all could benefit from it, even if fast turnarounds aren’t particularly key. “I think this would be suitable for any business, not just mailing houses,” she says. “No matter what service you offer, it’s good to have that option.” She points out that customers don’t just value this because it enables them to order mailing last minute, but because it can potentially enable them to hold on to funds for longer: “It gives customers more time, whereas with a Bacs payment the cash comes out of their account in three days. We’ve found that clients like that.”

Potential pitfalls

Implementing a credit card payment system has been completely painless, reports Burnell. She cautions though that printers will need to still process Bacs and cheque payments for those companies who still prefer those methods.

Top tips

• Don’t be worried about telling new customers if this card facility is being used to support a payment upfront system. “We don’t hide the fact we need this payment upfront,” says Burnell.  “We explain why this is such an important policy for us.”
• But it is advisable to still be flexible in some instances, if implementing a payment upfront system.
• Exploit the healthy cashflow this system should bring by using it as negotiating ammunition when hammering out deals with your equipment suppliers and manufacturers.

Burnell’s top tip

“You have to market it to your clients, let them know that you have the facility.”