Mike Rigby, Managing Director of MRA Marketing, on winning the CMA Award for Strategic Planning & Management for EH Smith
We are really pleased to have won the prestigious award for Strategic Marketing at this year’s CMA Awards, for our EH Smith campaign.
EH Smith (EHS) is a successful family business, one of the largest independent UK builders’ merchants with eight branches and sales of £97m. Its flagship branch in Shirley, Solihull has 90% of sales delivered. Most customers are larger contractors and house builders. But over the last 10 years higher margin collect sales to small builders and tradesmen have suffered from competition with low prices and self-selection. Our brief was to help EHS review its strategy and prepare a business model to recapture lost collect-share and grow at Shirley and the rest of the network.
Mark Mallinder of EHS and I worked closely together on all aspects of the business model – range, pricing, branding, merchandising and marketing. The marketing perspective was fundamental but successful implementation required far-reaching change in the business model. It involved changing the range to attract the customers EHS wanted, pricing, branding, selling space and merchandising, how staff interacted and communicated with customers and many more practical aspects. As well as Mark and me the project involved many people from EHS and MRA.
We began by researching the background, finding out what builders wanted from merchants and benchmarking EHS against the competition. This research was in 5 parts: evaluating likely house building and RMI trends in the next 10 years and the fit between EHS’ business model and the market, conducting interviews of customers and non-customers, customer focus groups and exit interviews from EHS and of DIYers from B&Q, visiting merchants in non-competing areas and direct competitors to establish best practice, calculating market shares and potential within 5 miles and price-tracking competitors.
Having established the facts we came up with a strategy to achieve 5 objectives. These were: grow in the RMI growth market to compensate for lower new-build programmes, gain higher-margin collect business from small builders and tradesmen to improve profitability, double collect sales in 3 years in a 5 mile radius of EHS’ flagship Shirley branch, change perceptions of EHS among smaller builders and tradespeople and be seen again as THE builders’ merchant, and create a business model that works across all 8 EHS branches.
Practical measures to achieve growth in the high margin area of trade included: stocking product builders want, using space to sell, not stock; using pulling power of brands to attract; pricing clearly so builders know they are getting the best deal; making it easy and convenient to buy and communicating ‘the new Shirley, a proper builders’ merchant for proper builders’ via their preferred media – all backed by an integrated marketing campaign to build momentum.
The campaign positioned EH Smith as a ‘proper builders’ merchant for proper builders’ on the side of the small/medium, independent builder, who is proud of his trade. We got the message across using ‘Proper Prices’ product catalogues, POS, direct mail, banner, print and regional bus advertising, extensive social media and PR, YouTube, the campaign website ‘www.shirleybuilders.co.uk’, local radio (Free Radio, Birmingham). As a spin-off we got regional TV interested in the chairman – still working at 95 – and smuggled the story in on that to a wider audience. The results speak for themselves – 24% increase in customer visits/collections, 24% increase in small builder revenue plus 12% increase in profit and 38% increase in product range purchased by smaller builders, with a 30% increase in range collected by all customers. Every target was met or exceeded.
I’ll leave the last word to Mark Mallinder, the Marketing Director at EHS: “Results are continuing to exceed forecasts. The impact of the project has been unprecedented, providing EH Smith with a growth roadmap for the next 10 years”