BMF Conference: Know your customers

Published:  22 June, 2015

Geoff Ramm, an award-winning marketing speaker, and Mark Mallinder, marketing director at EH Smith Builders Merchants, came together to give a workshop on how to ‘Know your customers’ - enlightening the audience with customer service and marketing ideas that are designed to improve a business and inspire a workforce.

Mr Ramm kick-started the presentation by challenging delegates to get into small groups and spend two minutes coming up with ideas about how to improve a children’s hair salon, and what you would do to make the experience more appealing to children and their parents. “Most of us judge a book by its cover, so make the cover of your business different and engaging to attract customers,” he told delegates.

With the audience feeling energised and ready to go, Mr Mallinder took everyone on a journey, explaining how EH Smith used a variety of customer research and marketing techniques to find out what its customers really wanted from its flagship branch in Shirley in the West Midlands.

“Three years ago after EH Smith exited the recession, we realised that we had a problem,” he said. “Our deliveries were fine, but our collection model was broken. We had a brainstorm session about how we could resurrect the business, but the more we unrivalled, the more we realised that we had a much bigger problem than we first thought.”

EH Smith went through a vigorous process of identifying who its customers were, what they wanted from the company, and most importantly what they didn’t want from the builders’ merchant. However, in the beginning, Mr Mallinder admitted that even though the company thought it knew who its customers were – bacon sarnie eaters, beer drinkers and readers of The Sun newspaper– it was in fact stereotyping its customers, as it wasn’t a true representation of EH Smith’s clientele base.

“There is a huge danger for merchants who may inadvertently treat their customers differently to how they would like to be treated themselves,” acknowledged Mr Mallinder. “Some might think that builders don’t mind a bit of mess in the yard, or don’t mind having to wait to be served at the trade counter, but they do. Builders are no different from you and I - they engage with the same brands as we do. This is a fundamental problem in the merchant industry and is something that we must put a stop to,” he added.

Like many merchants, EH Smith had the basics of a great business, having been around for more than 90 years, but the reason why the company was experiencing problems was because it had an element of fear of the word ‘retail’. Mr Mallinder told delegates: “We often think that customers won’t like their local merchant to be too retail, however, it’s vital that we adopt some retail principles to make them work for our business and to help us provide a better service to our customers.”

The independent builders’ merchant changed a lot of things in order to improve its business, including having well displayed stock, an increased range of products that include ‘good, better, best’ ranges to give customers choice, clear promotions that were easily visible for customers, and a clean shop floor to name but a few.

Mr Mallinder told the audience how it was important for merchants to be competitive on price, but that it wasn’t about having a price war. “Nowadays customers can instantly find out the price of something by looking on their smartphone,” he said. “Merchants have to be competitive and make sure that their prices are clearly visible to customers.”

Have a logical branch layout is also vital for merchants, as Mr Mallinder explained: “Sitting down and using a bit of common sense to think about the layout of a store can make a huge difference. Allowing for browsing and self-selection of products has really helped our business grow. We have even opened up sections of our warehouse so that customers can see the range of products we stock – it’s an extension of the shop floor.”

Customer engagement

Along with having a fresh and clean looking branch for customers to shop in, having excellent customer and employee engagement can help drive performance and profitability. “Having knowledgeable staff on the shop floor who can provide expert advice to customers is crucial,” Mr Mallinder told the audience. “Communication with customers needs to be personable and tailored to individuals. For example, the biggest turn off for a customer is when they receive a letter in the post or via email that reads: “Dear valued customer”, as it suggests that the company has no idea who it is talking to.”

A lot of what EH Smith has done at its Shirley branch is a simple but effective equation, according to Mr Mallinder, who said: “If we understand our customer, give them what they want, and engage with them, they will feel valued and will be loyal to us. This, in turn, will help us build our brand.”

Twelve months after re-launching its flagship branch, EH Smith’s footfall has increased by 30%, its collected sales have increased by 32%, its collected profit sales have increased by 22%, and over £3m collected sales have been added. The merchant has also had a return on its investment in less than a year. “These figures were only possible because we stopped and listened to our customers to find out exactly what they wanted from us as a merchant,” concluded Mr Mallinder.

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