About Build Center
Build Center, part of the wolseley group, is a leading national builder's merchant with over 150 branches supplying building materials to the trade.
Strategy - broader business issues the company is facing the recession had caused the home-building market to slow significantly. Also, stiff competition from local independent traders was creating challenging trading conditions. Build center wanted existing customers to spend more with them without impacting on margins, so offering discounts on existing business to encourage cross-selling was not an option. The offer needed to be personalised to every customer as each buys different volumes of materials and receives different terms and prices.
Objectives of the campaign
The objective was to give Build center a greater 'share of wallet'. Customers were coming in and buying just a single item - a builder would come in and just buy bricks, but not cement - and Build Center wanted to encourage them to buy their other supplies at its branches too.
The campaign also needed to encourage dialogue between sales staff and customers so that new trade terms could be negotiated, leading to more long-term business.
The target audience
The campaign was targeted specifically at builders, landscape gardeners and joiners. The main issues in communicating with this audience are threefold:
1. Working out which segment of their sector they work in. For example, does a builder build houses or do they specialise in small interior jobs? do they do everyday or high-end work?
2. Customers in this sector tend to buy on price alone and in a recession, the price factor became even more important.
3. Each individual customer has different terms negotiated with their supply merchants meaning that each will pay an individually negotiated price for their product Snowball's solution had to take all three of these issues into consideration.
Media, channels or techniques used
Through careful analysis of Build center's transactional database, Snowball created precisely targeted offers on products that customers were not buying but needed to complete their jobs and also upsell offers in the catagories they were buying.
But how do you know what each tradesperson needs? Snowball analysed each customer and looked at the categories they bought in, the frequency of their transactions and how the value of their transactions compared to averages in each category.
Snowball then cross-referenced purchases and used external data sources to work out which subset of the trade they might work in. For example: a builder may specialise in roofing and a landscape gardener may lay standard driveways and patios - but they both need bricks.
Using data from the most recent three-month period, snowball calculated the likely best offers for each customer. Those who bought in all categories were not considered, as there was little scope for improving share of basket. similarly, those who bought too little to qualify for 10 vouchers were also omitted.
Offers could not be price-specific, but had to be percentage or offer-based because the building and home improvements trade are based on volume and locality: each trader will receive a different price based on volumes bought and the prices in their local area.
Creative and execution
The campaign was given the name 'spend & save', communicating clearly to both customers and staff the benefits and key mechanics of the programme. As the target audience operates in a largely offline
world, Snowball devised a mailable chequebook-style voucher booklet with a personalised front cover depending on whether the recipient was a joiner, builder or landscaper.
Inside the cover was a message from the local manager with a map and address of their nearest branch. the offers were bespoke to the recipient, based on buying patterns and likely predicted requirements.
The aim was that Build center would never waste a voucher trying to sell a joiner a brick, but would up sell him to a new premium product.
The vouchers were ordered according to likely propensity to buy, numbered individually to enable tracking and supplier logos were added to increase recognition of the value of the offer. They were bound with a durable spine and tough enough to withstand being bent into a pocket, chucked into a toolbag or thrown around in a van.
Once a voucher had been torn out, the stub contained the telephone number of the local branch, and on the inside back cover, data capture forms ensured recipients could keep their details up to date.
Halfway through each campaign, snowball sent a personalised email and SMS to remind people to use their offer booklet. a personalised letter summarising their offers was also sent. In-store an online in-store dashboard developed by snowball enabled staff to know who had which vouchers, filter by voucher type and to strike up conversation with them to encourage redemption and renegotiation of trade terms.
The campaign runs quarterly. sales data is received monthly before the start of each campaign and analysed within five days. This data is then used to create the booklets, taking a week. The booklets are mailed out and each campaign lasts three months. At the end of each campaign, learnings are fed back in, new sales data is received and the process begins again.
So far, three campaigns have been run at a total cost of £156,000. to date, the campaigns have generated £3,149,020 of incremental revenue that can be directly attributed to the vouchers.
Twelve per cent of targeted customers have redeemed. The return on investment is 20:1.
"Spend & save has delivered a fantastic roi and contributed significantly to the turnaround of the business. Our Branch managers have confirmed that this is far superior to marketing campaigns they have seen before, and even seasoned trading directors in our business believe this is the best marketing activity they have seen in the merchant industry. the customer insights have been a revelation".
Andrew Cushing, Head of marketing, Wolseley