National hardware retailer Mitre 10 is set to introduce a loyalty program and more targeted advertising after dumping IdeaWorks in favour of M&C Saatchi.
The retailer is looking to fight back against the country’s largest hardware retailer Bunnings and will channel a percentage of its marketing budget into a loyalty program in a bid to grow market share.
The plan is the brainchild of ex-Coles marketer Phil Cavagna, who previously managed the Coles Fly Buys program before joining Mitre 10 as national marketing manager a year ago.
“It can be really powerful if you give consumers something back. If you show them loyalty they’ll bend over backwards for you, even for minimal points,” he said.
Mitre 10 operates a small loyalty program, My Patch, in about 20 stores, but Cavagna described it as being “more of a liability”. He said My Patch could be scrapped in favour of a national program.
This week Bunnings confirmed it has no plans to establish a loyalty program.
Upcoming Mitre 10 campaigns will be based on insights from new market segmentation research, which identifies the chain’s quintessential customer.
Mitre 10 will target 25 to 54-year-olds from a higher socio-economic background looking for helpful instore insights and advice. “We want to grow the right mix of customers who are serious about DIY and target them better. We’re going to have a greater focus on more targeted activity.”
Mitre 10 parted ways with IdeaWorks after two years late last year to search for a Melbourne-based agency that would give it greater face-to-face time.
Cavagna said the tyranny of distance forced the decision. He said he “gave IdeaWorks a year to be fair” after joining the retailer in January 2008. Cavagna added: “I don’t think they got any better.
“IdeaWorks was pretty good in the first instance, but we are a high volume client and put a lot of work through an agency.”
Cavagna said that changes in IdeaWorks’ senior management had diluted their relationship.
“We couldn’t sit down face-to-face with them a great deal – a lot of it was left to email and phone calls. I’m not suggesting IdeaWorks was overly bad, but I knew there was better out there.”
M&C Saatchi has signed a two-year contract after pitching against Leo Burnett, Balance and DDB – which pulled out after landing Coles. The media account remains with Mitchell & Partners.
Mitre 10 directs a percentage of its sales into marketing. Nielsen AIS estimates the retailer spent $10.3 million in main media in the 12 months to October 2008. But Cavagna said the figure doesn’t take into account 50 million catalogues or POS. He claimed both catalogue read-through and recall is increasing, according to new research.
Have something to say on this? Share your views in the comments section below. Or if you have a news story or tip-off, drop us a line at adnews@yaffa.com.au
Sign up to the AdNews newsletter, like us on Facebook or follow us on Twitter for breaking stories and campaigns throughout the day.
