The REaD Group: Mark Roy
Overcoming death, downturns and dire acquisitions to put data at the forefront of business
“Data is almost the new black isn’t it?” asks Mark Roy, chief executive and founder of data hygiene company REaD, at the end of our two hour interview. One thing is for certain: clean and accurate data is always going to be ‘à la mode’.
Any entrepreneur thinking it’s tough out there right now should spare a thought for Roy. At the age of 29 and with just £25,000 in the bank he launched his data hygiene business – in the middle of the recession spanning the late eighties to the early nineties.
“The first four or five years of our business was hell”, admits Roy. “1990 was the worst time to launch a business. It really was hand to mouth; we were just about managing to pay the wages and feed ourselves.”
While Roy’s ideas were innovative and set to shake-up the data hygiene industry, his timing was all wrong. “People would say to me ‘look Mark it’s quite an interesting idea, but we’ve just laid off all our consultants because, if you haven’t noticed, there’s a bloody recession going on’.”
Roy ‘s past is not that of your typical entrepreneur. In fact, it is also as gregarious as the man sitting in front of me. Having secured a coveted place at the National Youth Theatre as a result of a bet with his English teacher at school, he began his young adult life as an actor .
Several years and one too many rejection later, the dispirited young performer found himself perusing the classified section of the Telegraph where he spotted an ad posing the question ‘can you sell?’ “And I thought, well, acting and selling, it’s the same kind of bullshit really,” he says with a wry smile.
Just under a decade later, the idea for REaD was conceived. In his previous role as marketing director at Swiss firm Montana Strauss he conducted some research into churn rates among holiday makers. He coined the phrase ‘negative marketing’ and decided to set up a business based on a model of identifying the people who are unlikely to buy from companies advertising through direct mail.
Roy and his wife, Sarah, with whom he started the business, got their first contract within weeks of starting up. But the business reflected the state of the economy, and the couple didn’t realise the fruits of their labours until the late nineties. Then the unthinkable happened: Roy’s wife died from a brain tumour.
“It was an incredibly hard time but you get up, you dust yourself down and you get on with it,” Roy says. “It was just before I was forty and I was feeling pretty bloody immortal. The business is beginning to fly, all of a sudden you’ve got a nice car, you’ve got a nice house and you think nothing can touch you. Life has a horrible habit of coming and kicking you in the ass whenever you feel like that and that’s what it did for me.”
Following the loss of his wife, Roy channeled his energies into the business. “Most typical entrepreneurs have a drive behind them, whether it’s having been treated badly by your mother or a girlfriend rejecting you at 16.” Whatever’s driving Roy has done a good job of it: REaD has grown from a £2m turnover in 2001 to a projected £17m this year.
This experience also inadvertently provided inspiration for the next phase of his business. In the months that followed, Roy noticed an extraordinary amount of mail was still being sent to his wife and after conducting some research in the area, REaD soon established that UK plc was spending about £80m a year sending mail to people who had died.
Soon, REaD’s offering expanded to fill this glaring gap in the data hygiene market. “If you take an average sized database of two million names and addresses, a year later 4.6% of those will move home and 1% of those people will die,” Roy explains. “If you take a database of two million, a year later it will only be 1.9 million; it constantly decays.”
And so The Bereavement Register (TBR) was born. Now, when a person goes to register a death, they will be given an information pack including a tear-off freepost registration form. The deceased’s details are then added to the Bereavement Register and when REaD’s clients screen their mailing lists against TBR, the details of the deceased are removed.
“”Dead people don’t respond, people who move home and people who don’t want your mail don’t respond. If you remove all of those you’ll find you mail 60% of your intended volume and get the same response – your ROI will go through the roof,” explains Roy.
But the vivacious entrepreneur is not the only one wanting to clean up your database. REaD’s closest competitors are Experian and Royal Mail, although Roy is confident that his company’s offering is far superior to their rivals. “Our [data] is 98.8% accurate, which is about as good as you can get. And theirs isn’t. I think everybody recognises that we’re market leaders.”
Roy has good reason to be confident. Last year the company turned over £13m, this year it’s expected to reach over £17m. More importantly, the business is expected to generate around £2m in cash this year.
And that cash is being put to good use. REaD is in the process of completing its fourth acquisition, all of which have been funded entirely by cash reserves. Roy is unmistakably cautious about raising finance for future acquisitions. “We won’t ever dilute the paper,” he says. “The problem for me as the primary shareholder is that I’ll end up with 70% of fuck all.”
Roy isn’t ruling out further acquisitions in the not too distant future. “Our strategy’s two-fold at the moment: growth and added value,” he reveals. There are a raft of ways REaD is realising these goals, including introducing new ranges to its client base, looking at its existing product ranges and trying to create new products of the back of those. Also, an aggressive acquisition strategy is not unlikely.
But acquisitions are not without their challenges, or, as Roy puts it, “an acquisition ain’t easy”. “It’s a really painful process,” he explains, especially when the people being dealt with are less than accommodating as is the case with his current acquisition. “They’re all pains in the arse,” he says. “They are just unpleasant people to deal with and negotiate with.”
The latest acquisition has the same goal as those that have gone before – to add shareholder value. Roy is extremely focused on ensuring that the business is as financially successful as possible over the next couple of years as he has his own goal in mind. The gregarious entrepreneur decided early on in REaD’s development that he wanted to exit the business by the time he was 50. “In business you need to have a timeline and by saying 50 I have one, although I don’t care if it’s 48 or 52.”
While he has plans to live out his retirement in the sun, Roy doesn’t relish the idea of handing his business over to someone else. “Letting go is always quite painful,” he concedes. “The bottom line is – and any entrepreneur who tells you otherwise is lying – that you care and you feel slightly emasculated when one of your junior management team says ‘no Mark, we don’t do things like that any more’. It’s frightening, the prospect of being out of it, really genuinely frightening.”