Keep calm and carry on
by Antony Begley.
Martin Smith makes an interesting lunch host. Voluble and articulate at times, quieter and more pensive at others, he’s always quick to laugh or smile and refreshingly open about subject areas that most senior businessmen usually prefer not to discuss with trade journalists – debt, financial performance, business failures, that sort of thing. Having said that, the Chief Executive of The Direct Marketing Group, has little reason to hide behind the sort of waffle and management speak usually employed to avoid actually saying anything.
“It’s been a tough period for the business, but we’ve come through it and we’ve just agreed a new four-year refinancing deal with the bank so we’re in a good place at the moment,” he volunteers matter-of-factly.
Smith’s business will be best known to many database marketers as the company behind the the ubiquitous Mortascreen deceased suppression file, which explains why our lunch chaperone in a trendy Leeds bistro is Mortascreen Commercial Director Jo Bell. But it turns out there’s a lot more to Smith’s business than Mortascreen. A lot more.
The Direct Marketing Group is in fact the country’s biggest independent direct marketing business and comprises five direct marketing and advertising businesses: direct marketing agencies DMS, JDA and non-profit/charity-focused agency Whitewater as well as print management division DM Print and Millennium, the UK’s leading advertising, marketing and research agency targeting the over 50s (and the brand behind Mortascreen).
The company employs something approaching 300 staff and turns over about £40m. Not bad for a man that left school at 15, spent six years in the army with the Royal Engineers then worked as a security guard as he tried to figure out what to do with himself.
“When I signed up for the army, I thought it was only three years I had to do,” he recalls. “Turns out it was six years,” he adds with a big belly laugh.
“But after that I got a job in security, as many ex-servicemen did, which left me with a lot of time on my hands so I thought I’d better put it to good use,” he says.
And put it to good use he did, committing a big chunk of it to achieving a three year correspondence-study BA in Economics before securing his first ‘real’ job in the late 1970s – one that required a suit. The role was a marketing one within high flying local menswear chain of the day John Colliers. The business at its largest extended to almost 400 stores and was eventually sold to the Burton Group in 1985.
“The job was in marketing, mainly around merchandising, and Colliers was part of a bigger group. It was a big deal in its day and a fantastic first job. We had a comparatively big IT department and ran two enormous mainframes and this was long before you really encountered much data in retail so it was an interesting early introduction to what data could do.”
Smith then moved to mail order giant Damart in 1984, a move which was to open his eyes much wider to the fascinating possibilities buried deep in the murky world of data.
“Because Damart was a home delivery business it was naturally a lot more advanced on the data side of things,” he explains. “They understood what marketing meant for a start and didn’t confuse it with sales or merchandising and they were trying to drive insight into the decision-making process.”
Smith was also beguiled with the opportunity to use ‘real’ data, an opportunity that hadn’t been available to him at Colliers.
“At Damart we got access to all sorts of data that we could link back to individual customers, whereas at Colliers we had mountains of data but it was all just straight anonymous transactional data that we couldn’t tie back to individual customers.
“The appeal for me was the data and insight that we could derive to develop our marketing plans but the technical problems we had to overcome were fairly significant. We were still using big mainframes so we had to work out ways of analysing the data that was held in these big boxes and we didn’t have the raft of powerful tools you can pretty much buy off the shelf these days.”
Another issue he and his marketing colleagues faced, was one that will still ring true with many of today’s data-focused marketers: “Every request we made concerning the database had to go through the IT department so by the time we got the answer it was usually too late for our needs – or they didn’t supply exactly what we were after.”
Smith shakes his head almost imperceptibly, clearly still rankled by this issue decades later, then mutters under his breath “very frustrating…..really very frustrating.”
Smith was to spend 11 years of his life at Damart and those years clearly played a massive role in helping him decide upon the direction he wanted his career to take.
By way of explanation, he offers: “Even back then in the mid-80s I lived and breathed data. I’d always been data-led and I had come to see that a lot of answers are bound up in data – it’s just a question of how you get those answers out.
“We were given a lot of latitude at Damart to experiment with data and analysis and just see what happened really. We used to take extracts and mess about with them using a basic relational database and see what popped up. We’d run it through regression analysis, Chaid and so on and sometimes we’d just hit upon something that worked. It was a really interesting time.”
Smith is also grounded enough to point out that despite being very much on the ball back then in terms of data analysis, he “wouldn’t know where to start now”, which I suspect has more to do with modesty than reality.
“I was promoted from Manager to Director and as a Director for five or six years I didn’t have a computer on my desk. What I did have was one of the first laptops I ever saw,” he says. “ It weighed 38 kilos and it was like carrying a bloody great paving slab about with me. It had a 4” green monochrome screen and it was cutting edge.”
Despite having the freedom to see what data could do and being given the technology to do it well, Smith eventually decided it was time to move on and in 1994 accepted a job as Group Marketing Director at over-50s organisation Saga.
“The new role got me back into computing and I got a PC back on my desk,” he recalls with a chuckle. “I was based out of Felixstowe and my plan was to relocate for three years then start something up myself specialising in the 50+ market. There were no agencies working in that area at the time and it was a growing market. Still is, actually.”
Then, as with many good plans, it came unstuck, as he explains: “I was living in a hotel five nights a week and I just decided one day that I didn’t want to do it anymore.”
So he upped sticks and founded an agency “with data at its heart” that offered consultancy, planning and creative.
“It was a mini-agency really and within a few weeks we had seven staff. We didn’t struggle to find clients wanting to get into direct marketing but not having databases to do it with so we would build them marketing databases and host them and then help them tailor their data for downstream activity. But everything we did was around data.”
By the late 90s staffing levels had grown to 20 and the business relocated to Shipley, near Leeds, where it remains to this day – though closer to 250 staff call it home these days.
Interestingly, Jo Bell, our somewhat silent lunch partner, was employee number three at the business, having started in month one. She was one of many, including Smith’s wife, who joined the business from Damart.
“Everyone who joined basically enjoyed data, saw the potential and welcomed the opportunities it could deliver,” she says.
Over the last decade, the business has undergone something of a transformation thanks to a raft of significant acquisitions and appointments.
Some nine years ago, the company acquired DM Print, its print management division, that still delivers around 30% of the expanded group’s print requirements.
Then, six years ago, Smith made his first agency acquisition, the mature Cheltenham-based DMS direct marketing agency with high profile clients in both the direct response advertising and fundraising sectors.
Three years later, Smith acquired the London-based Whitewater agency, a direct marketing agency operating exclusively in the charity and non-profit sectors. At around the same time, the company acquired the highly regarded JDA agency, with its client roster that reads like a who’s who of blue chip businesses that take their direct and digital marketing seriously.
“We also bought the properties when we bought these businesses, which has always been important to me, and despite the credit crunch kicking in, I’m still completely happy that these were all good solid acquisitions.”
Smith is pleasingly blunt too about the one thing that hasn’t gone his way: “We launched Active Life, a retirement club based around a magazine, and that didn’t work so it hasn’t all gone our way!”
As for Mortascreen, Smith first came across it in the early 2000s, having heard that it existed but taking nearly six months to actually find it.
“We were working on an equity release product for the over 70s market and we needed to screen the database. We had heard of a file but we didn’t even know its name and it took six months to source it.”
Smith eventually tracked down Smee & Ford, a company whose core business was around advising charities on who’d left them money in wills, the various legal bodies understandably not prepared to go to great lengths to source the charities that had been named in wills.
Smee & Ford had a deal to acquire mortality data from all the country’s probate registries (which covers about 50% of deaths) and a deal with the largest chain of funeral directors to fill in as much as possible of the other 50%.
“The deceased file was literally only seen by them as a by-product so we approached them about licensing it and we’ve been managing it every since. In fact, we’ve just renewed the licence for another 10 years.
“We started out with a file of around two million, and we’re now up to over 9 million. We’ve continually been building and verifying it, enhancing it with further reliable data and we now capture up to 95% of all deaths in the UK.”
Along the way, Smith also managed to attract former Next Chairman David Jones to be Group Chairman, further ramping up the business’s credentials. And with four years’ new funding in place, it appears that the fun stuff is only just beginning for Smith.
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