Summary
The promotion offered professional kitchen fitters and builders the incentive of two return flights to a choice of up to 19 destinations — including Paris, Barcelona, Paphos and Las Vegas. The more they spent, the further they could fly. The mechanic was straightforward — customers simply had to register their participation online thus achieving the objective of gathering more data. At the end of the promotion, customers who had made their qualifying purchase were rewarded with their complimentary flights voucher.
The campaign drove customer sales to Magnet Trade despite a declining market, compounded by the economy contracting suddenly in the final quarter of the year. The promotion helped switch customers from the dominant player in the market, whose whole promotional calendar is centred around the Autumn. Plus there were many happy Magnet Trade customers who jetted away to exotic destinations on the house.
About Magnet Trade
• Magnet Trade supplies kitchens and joinery to the building trade via 200 branches and is the business- to-business arm of the Magnet kitchen retail brand.
• It sells solely to trade professionals, who are in turn hired by home-owners to complete property renovation work.
• It is second in the market to Howdens, the clear market leader with more than twice as many outlets.
• Magnet Trade has operated for over 90 years and has a strong UK-based manufacturing heritage.
Strategy — broader business issues the company is facing
• Research undertaken by Magnet Trade identified that due to the volatile nature of the market, tradesmen have become much less loyal to suppliers and will now shop around for the best deals and offers.
• Market intelligence indicated that October has traditionally been by far the biggest month of the year for the market leader.
• While its competitors offered reductions or low level giveaways to attract customers, Magnet Trade realised that a creative offer had to be developed to ensure repeat business and incremental spend from an audience that is liable to brand switching.
• Analysis of historical sales indicated that following the decline in the market, a hard core of loyal customers were providing a significant proportion of Magnet’s total sales; it was decided to incentivise these customers to achieve higher spend levels at Magnet Trade.
• In order to gain maximum ROI and help switch sales from the competition, it was decided to launch the promotion a month ahead of the competitor’s promotional activity.
• The promotion focused upon the idea of customers being rewarded with aspirational, yet achievable rewards for trading during September and October.
• In order to drive higher spends and appeal to the wide range of customers that trade with Magnet, the rewards were tiered and based on customers’ overall spend during the promotional period.
Objectives
• Increase customer spend at Magnet Trade — by attracting higher spending customers and encouraging lower spending customers to trade up.
• Encourage customers of its key competitor to switch to big ticket purchase during the key buying period.
• Increase repeat business and generate loyalty to the brand.
• Increase web registrations as a means of gathering customer data to drive ongoing loyalty.
Target audience
• Small local building firms — typically one or two person businesses.
• Most of these traders will hold accounts with both Magnet and Howdens, as well as smaller suppliers — builders merchants, TradePoint, etc.
• Value for money and getting the best deal on products is of great importance to this audience in order to ensure greater profitability for their business, this can result in a lot of brand switching amongst Magnet Trade and their competitors.
Media, channels or techniques used
The promotion offered the incentive of two return flights to a choice of up to 19 destinations, based on the following spend levels:
• Spend between £2000-£4999 destinations in Europe (including Paris, Amsterdam, Barcelona, Palma, Ibiza, Dublin etc.)
• Spend between £5000-£9999 additional five destinations in the Med Cyprus, Crete, Rhodes and Turkey)
• Spend over £10,000 — choose from a further four destinations in the USA (including Los Angeles, La
Orlando).
• Dedicated micro-site which not only acted as a registration portal but also as a holiday destination
guide.
• Weekly emails, segmented into spend levels, to let customers know their spend so far and targets.
• Six-week radio campaign on TalkSport — identified as one of the most popular media channels for the target audience via research.
• 200,000 ‘passports’ to hand to customers and prospects.
• Promotional banners across the Magnet Trade website to drive registration.
• External and internal POS in branch.
• SMS reminder to those customers who hadn’t yet reached the £2000 spend threshold.
• Customer magazine, The Mag (80,000 copies).
• Deals magazine, The Deal (80,000 copies mailed, 110,000 in branches).
Campaign timescales
Planning phase: May 2010
Campaign build-up: August 2010
Launch: August 31 2010
Campaign close: October 2010
Results/analysis: December 2010
Client testimonial
Ian Lambert, head of marketing, Magnet Trade, said, “‘Take Off with Magnet Trade’ was the flagship promotional activity for the brand in 2010, leading to a significant and measurable commercial benefit to the Magnet Trade business, the results of which are still felt throughout the business today. The promotion was so successful that we have used it as a platform to launch a loyalty scheme for our customers that has had huge take-up already. The fact that we were able to achieve such impressive results in a highly competitive but flat market is testament to the impact that the activity had, not only amongst our existing customer base but also on new account recruitment and conversion. On top of this, Magnet Trade has accumulated a high quality segmentable database of customers who we are able to retarget and communicate to, in order to further cement the brand relationship.”
