After all, how many printers have chemistry meetings with prospects, a client experience director on the board and prefer to talk about ARPUs rather than iGens or Indigos? But after twice being crowned PrintWeek’s Company of the Year, being part of a very exclusive club is nothing new to Inc Direct. 

Darryl Danielli You didn’t come from a traditional print background did you?

Noel Warner Not really, my background is in the agency world. I was originally a paste-up artist in the days before Macs – I’m really showing my age now – but I worked my way up, becoming studio manager at a fairly large London agency, then project manager, and then I was seconded to the marketing department of telecoms company Mercury Communications. I knew very little about direct mail at the time, so I had to learn fast. But in 1994, after my six-month secondment finished, I was asked to join the MSB&K agency as an account manager. I worked there for three years before I and a lot of my colleagues were ‘mass poached’ by Black Cat to set up Black Cat Direct. So then I worked there for about three years, becoming group account director. 

So how did you get into print?

Black Cat was in Richmond and I lived in Bicester and the commute was hell. So I started to think about what I could do with my understanding of direct marketing. So in 2000 I joined a full-service litho printer called Inc who wanted to start offering direct mail. So I set up Inc Direct for them with a phone, an empty diary and no samples.

Was this fairly conventional direct mail at that time though?

I guess so – low-volume, commodity, lasered letters. But around 2000, variable data colour capabilities were starting to emerge. It was nothing particularly clever, but I started to think that there was something in it. So I built up a portfolio of work made up of samples from the digital manufacturers like Xerox, Xeikon and Agfa with fairly basic personalisation. And I basically took this around clients telling them that one-to-one was the future of direct marketing. 

But at this time Inc Direct was just a division of Inc, not a standalone business; how did that come about?

Around 2003, the main Inc business, which was turning over around £3m at the time, lost a £2m piece of business to a print manager and it just couldn’t recover. Inc Direct was starting to do quite nicely though, perhaps £500,000 in sales. But with the loss of the major contract the owners decided to close the whole business. So I did an MBO at the Inc Direct part with Wes [Wesley Dowding] and two data processing guys. I had to put the money up though; I paid £20,000 for the kit and £35,000 for the goodwill and they let me pay it back over two years interest free. 

When exactly was Inc Direct proper born then?

4 March 2003 was the day we became a limited company, and I became 90% shareholder after giving Wes 10%. From day one I knew that our future would be in full-colour, dynamic one-to-one direct marketing. Our model has always been based on selling a solution and nowadays that can be email, mobile or print, it just happens that the first solution we sold was a print one. We’re media neutral – we deliver one-to-one marketing across whichever channel is appropriate.

And clearly the model works as you’ve grown consistently since 2003. But in your last accounts your sales hit £6m and a lot of people say that the transition from £5m to £10m is possibly the toughest...

I would agree. The growth since 2003 has been pretty organic, there was a slight dip in 2011, but other than that we’ve grown every year and we’re touching sales of £7m. But with 60 people its inevitable that you have issues. So you have to have better systems in place, better processes…

…and those are all costs too; it’s not like these directly help you grow.

Exactly. So we have more departments, more people. Before, everything was in my head; I knew where I wanted the business to go and that was enough. Then I started to have people telling me that I had to start sharing my vision so that everyone could understand it and buy into it. And that’s tough, because once you’ve done it, you can’t really go back.

From what you’ve said, a lot of your success has been based on being reactive and rapidly evolving to meet your clients’ needs – so was committing to a strategic vision internally potentially restrictive too?

Bang on. There are big companies out there that we go up against and for them to change direction or strategy is a big thing – they’re super tankers compared to our little speedboat. We’re nimble, we can realign the business really quickly.

But then if you carry on growing you lose that agility surely?

We will and that’s why I don’t want to be a £25m company. I’m happy between £7m and £10m. We need to make sure that we will always be able to provide real value to clients, so that if technology for marketing changes and clients start to adopt more mobile-based technologies, for example, then I want to be able to say to them, ‘yes, we can do that’ and refocus the business quickly. If we get too big, then that’s difficult and it makes us vulnerable.

Was maintaining that agility part of the reason why you stepped up to chief executive, which I think is a fairly unusual role for a company of your size?

We were growing quite rapidly and the day-to-day issues were sucking up a huge amount of my time and I realised that we weren’t really moving the business forward because I was working ‘in’ the business, not ‘on’ the business. So we had a rethink because we wanted to set a strategic vision and a plan to push forward. To do that I needed someone who could still make sure we were still servicing the clients, doing great work and looking after the staff. And I decided it wasn’t possible to do that and also lead the strategy. I also knew that I already had a great team behind me ready to step up. So Alan [Hynes] stepped up from finance director to managing director, Andy [Bailey] became director of client strategy and insight and Claire Gordon was made client experience director. Finally, Andy Sears joined us as operations director from DST last May. So we now have an amazing and empowered management team who all have the same vision as me.

Did that all happen around the same time that Dowding left the business?

More or less. Wes left around 18 months ago, but Alan was already managing director by then.

But you weren’t equal partners in the business?

No, in the end when he left he had 20% of the business and I had 80%. 

But how come Wesley left?

We disagreed on strategy, basically. So we made him an offer for his share in the business. It was a bit like an amicable divorce, really. We were quite close friends and I’m sorry that ended, but he’s at Romax now and I wish him well. 

Back to the business though, has constantly evolving your offering meant that you’ve had some ‘squeaky cheeks’ moments when you’ve walked out of a client meeting wondering how you’re going to deliver?

There have, probably more than I would like to admit. But we always find a way; it’s what we do. In fact it’s been the making of us, going right back to the beginning with the Carphone Warehouse customer welcome packs that we sold to them in 2004. When their agency WDMP said we were going to do it, I put the phone down half elated, half terrified. It was a complete-colour job and we didn’t have colour. We knew the technology was there, but we had no idea how to do it. It was just a case of selling the big idea, and then working out how to deliver it afterwards.

So how did you deliver it?

We spoke to Xerox and showed them the concept, which had now become a live job, albeit a pilot, and they immediately said they wanted to do it on an iGen working with XMPie. The problem was that I didn’t have half a million pounds to buy an iGen. So Anoush Gordon, who was head of Xerox’s production print in the UK at the time, just said don’t worry, he would print it.

In their demo centre?

Exactly. So using XMPie and iGens they produced the 60,000 16-20pp mail packs, which had 180 variables and 25m permutations, and finished them on the showroom’s Duplo 5000 bookletmakers. It went live in late 2004 or early 2005 and it was a massive success. Four months later it went to full rollout, by which time we had our own iGen.

When you say massive success, how was that measured?

ARPUs – average revenue per unit. They had a test cell, which they did nothing with and then compared those results to those that received the welcome pack. The ARPU went up by £7.22, compared to the cost of the book, which was around 50p.

That was an awful lot of print for Xerox to produce for you then. How did they charge you for that?

They didn’t, because they knew they were going to sell an iGen off the back of it.

You’re joking?

Well, I can’t remember receiving an invoice for it, but you’re right, they must have charged us something.

If they didn’t and someone in the Xerox accounts department reads this, hopefully there’s a statute of limitations on invoicing.

Fingers crossed.

But in essence the Carphone deal was the making of the company?

Completely. I owe a massive debt to Michelle Henderson, who was marketing director at the time, for having the confidence and vision to try something. Xerox was absolutely brilliant too. And Wes did a fantastic job managing the production side.

It must have been pure gold being able to show that project and the results to potential clients too?

It was; having something tangible to show them made a massive difference. From there we had an award-winning killer application with proven client ROI and the rest, as they say, is history.

Surely taking on a project when you’ve got no idea how to produce it is a high-risk strategy though?

Not really, because we’ve always had the belief in the business that we would deliver. It brings you back to the passion again. What we do is about delivering measurable results and – touch wood – every solution we’ve developed with clients has worked, because if something doesn’t work they can turn it off just as easily as they turned it on. We’re always measured on results. 

Do clients share the results with you or are they a bit cagey?

They do share them. We actually entered the Marketing Week Data Strategy Awards and last month won the best Offline Marketing campaign award with our work for Cunard. The client had never won a marketing award before, so they were ecstatic.

It’s good to know that you get some real value from winning awards.

We really do. Take the PrintWeek Awards; what’s great about those, and I’m not just saying this, is that you make it so tough. You’ve got to put a really compelling entry in and everyone knows that. After the PrintWeek Awards the feeling was just amazing, it was really emotional.

Tell me about it. Apparently when I greeted you on stage I gave you a peck on the cheek too. It must have been the Italian coming out of me.

Did you? Excellent. My heart was pounding when the shortlist was read out. I cannot explain the feeling; it’s like winning best actor at the Oscars. You can’t get any better than that. It really did mean a lot to us; it’s the recognition to the business and the people within it and it’s testament to the clients for giving us the great work they do.

Speaking of clients, do you have any print managers on your books?

Just one, and we sort of inherited them. But 99% of our clients are direct: Mecca, House of Fraser, Cunard, Estée Lauder, Thomas Pink, Carphone, etc. They’re the kind of people we want to work with because they show us loyalty as it’s a real partnership. We’re not selling paperclips; we’re selling a return on investment.

What about M&A activity? You dabbled a while ago didn’t you?

We bought an agency a couple of years ago, Wand, but that didn’t work out.

What happened?

Basically, we didn’t do enough due diligence. They were in trouble and we got involved thinking we could help and ultimately grow it. We basically stepped in and said we would bankroll them, capped to £100,000, for a few months in exchange for 50% of the business to get them back on their feet. We rushed into it and it was a money pit. They had work, but not enough and it quickly transpired that none of our clients were looking for creative services from us – so after the business burned through £80,000 we pulled out.

Would you look at acquiring another agency in the future?

No, I don’t think so. We might look at a strategic alliance with one, but we have creative services in-house now anyway. So we’ll probably just grow that organically.

Any other potential acquisitions though?

We’re very interested in technology businesses. We came very close to buying a mobile marketing company recently, but the chemistry wasn’t quite right. What we want though is a business that adds complementary services to us and one that we can also add our services to – as opposed to a competitor that would just add turnover.

Is mobile the focus then, or are you looking at other areas?

I don’t know, there could be technologies that haven’t even been invented yet. We’re not going to rush this, we’re only going to buy the right business for us. And we also have to be the right business for them. It all boils down to the chemistry again – like it does with clients. Right now though, mobile is by far the technology to keep an eye on. Before long your phone will be the only thing, other than your clothes, that you will need to leave the house with. You won’t need keys, you won’t need a wallet.

That must be hard for a direct mail evangelist to say, that mobile is the future.

It’s a big part of the future definitely, but I’m a die-hard direct mail guy. The craft of direct mail will always win hands down when done well, but you can’t ignore the other channels, especially when you might be talking to a 22-year-old marketer whose world revolves around mobile, tablets and social media. But rather than build a mobile marketing team, I think we should buy one in so we can show their clients our toys and they can show our clients theirs. It’s the next logical part of our journey of being a marketing technology firm.

Stepping out of your comfort zone must be scary though, because you’ve got 60 people’s livelihood depending on you making the right decisions?

Thanks for that, but yes, you’re right. But that takes us right back to the beginning; when people ask about the secret of our success, when I think about it, there is one – it’s all about punching above our weight. We take on a challenge, step out of our comfort zone and deliver, even if we never thought we could.

I bet you never told the client you didn’t think you could do it?

Blimey no, we’d wait until afterwards and then tell them. Our clients believe in us, and we will never let them down. We sell on the ‘why’ – the ‘how’ is our problem and clients know we will deliver.

Are marketers generally more risk averse than they were before 2008?

Exactly right, that’s why people like Michelle Henderson are heroes in my book because they’re prepared to take risks. Marketing has to be about taking risks, measured risks, but it has to push the boundaries to be able to stand out. 

How can you persuade them to try something new, especially when budgets aren’t perhaps what they used to be?

We can demonstrate what has worked for other people, run trials or even offer payment by results.

Do many people take you up on that?

No, I wish they did. We offer it, but no one takes it up. I suppose it shows our commitment at the very least. But really it’s up to us to convince people that what they perceived as taking a risk actually isn’t. In fact, sometimes the riskiest strategy as a marketer is to just carry on doing what you’re doing, so what we’re doing is helping them to reduce risk through highly targeted one-to-one marketing.

Is that getting harder or easier?

It’s still hard work; you’ve got to fight for every bit of work you win, but it’s starting to get a little bit easier. A lot more confidence has come back from clients; they’re now finding that they’ve got bigger marketing budgets and they’re really starting to see the value of well targeted direct mail compared with email.

Final question: do you have an exit strategy?

Not really. We just want to create value in the business. If someone wants to buy us then we would only consider it if it created value in the business, by us bringing value to them and vice-versa, not someone just looking to buy turnover or a client-base. For example, if Sir Martin Sorrell knocked on the door, and wanted to incorporate us into WPP, then we would certainly look at that. I’m still waiting for the call though.