TVNZ-NZ Marketing Awards 2015: Refresh Renovations' marketing skills help build a big business
While the expression ‘thinking outside the box’ is a bit of a cliché, Traffic proved it can pay off. By identifying a gap in the renovation market it effectively created a new national brand with great potential for overseas expansion.
While New Zealand has many players in the ‘new home building’ and ‘commercial construction’ markets, Traffic, a strategic marketing company specialising in the building industry, noticed a big gap for a large business that focused solely on renovations.
So it gave itself the challenge of building a brand that offered something different, underpinning it with processes and systems that ensured a consistent customer experience across all franchisees. The trade skills were already present in the industry (plumbers, electricians, painters, architects etc), so they just needed to be re-packaged into a clear value proposition, taking a highly fragmented market and consolidating it under a strong national brand.
Typically, a successful national new home builder can achieve a four to six percent share of the new home market. These companies are referred to as ‘group builders’. But there were no equivalent national branded companies in the renovation sector. Instead, it was composed of small trades-based builders and a few local family companies in urban centres. Most could name a number of large national new home builders, but would likely find it difficult to name the top nationally branded renovation builders. Traffic noticed the same pattern was visible in Australia, the US, the UK and other western markets and saw an opportunity for potential expansion if it could successfully pull off the building of a disruptive renovation brand.
Research also showed that in most cases, undertaking renovation was a distressing experience for home owners. 40 percent of renovations ended in a dispute and 20 percent ended in a major dispute. This was seen as a consequence of the way the whole industry worked, across designers, builders, sub-trades and distributors. Each party was skilled in their area but they were not organised to deliver an overall outcome for a consumer.
In response to the perceived gap in the market, it pioneered an entirely new category in the building industry and created a brand and offer for the renovation market that it dubbed Refresh Renovations. It delivered the renovations customers wanted, on time and on budget, through a standard process that franchisees followed. In order to be able to do this, a unique integrated ‘design and build’ process geared and resourced for the renovation market was developed, and supporting the process was a team of architects in its head office. It knew it needed to implement a strong marketing campaign to generate a constant supply of leads to support a large business, as well as building a respected brand that inspired and attracted customers. To market its new offering, an entirely new magazine was developed and launched, called Renovate, to create the content required for the web and its customer relationship management strategy. It is sold in different retail stores and sells advertising to cover costs, like any other consumer magazine.
When the title was launched in December 2011 it was the only magazine dedicated solely to renovations in New Zealand and provided the company with a channel to communicate in-depth product and system information, which couldn’t be done as effectively through other media options. It also released monthly magazine style newsletters using content from Renovate magazine, driving traffic to the Refresh Renovations website. It also used television advertising to ensure it reached a wide audience.
Convincing people of the benefits of its offering was no easy feat, however, as it had to develop everything itself because there were no other renovation group builders to learn from. It had to trial, pilot, research and review all of its own data to learn what worked and what didn’t. Creating a new category for consumers was also much harder than competing in an existing category. It had to explain what a ‘design and build’ renovation brand was and then why it was better than the independent builder they were familiar with.
It also had to create the brand, website, database, IT systems, legal documents, contracts, management, processes, staff roles and then sell all of these as a package to both franchisees and consumers.
Considering Refresh Renovations was created entirely on marketing principles and expertise in an industry notoriously resistant to change, it has been hugely successful and is now the major income generator for Traffic.
The company has seen 300 percent growth in revenue over the past three years (it won a Deloitte Fast 50 award for being one of the country’s fastest growing companies). And it achieved this with no funds or corporate resources, just an overdraft at the bank and its belief in marketing, actively managing its activity to generate leads rather than hoping to bump into the next big project. And, with 35 franchisees in New Zealand, the company achieved its goal of being the leading national renovation group builder. Amazingly, if the business was transferred to the US, New Zealand revenues alone would make it the fourth largest renovation builder in the US. And to put this into context, there are 650,000 renovation companies in the US.
The strategy was to prove that the model worked in New Zealand, then roll it out in Australia. And within four months of its launch there, it already had its first few franchises in Australia. Its target is to have 294 there in total. Once it has proved it is transferrable, the model will also be much easier to take to other countries, and Refresh Renovations is already sounding out opportunities in the US, UK and Singapore.
While most companies are driven by manufacturing or financial models, Refresh Renovations was driven entirely by marketing skills and processes. And it proved that if you follow good marketing practices and make the necessary investments, it is possible to establish an exciting new business with international growth prospects.
“Truly transforming a category through strong insight into how things work.”
Chorus (Gigatown); Douglas Pharmaceuticals (Reclassification Of Silvasta); GS1 New Zealand (GS1 Brand Boost); Holdfast NZ (Gorilla King Of Foams Campaign); iSite Media (Panels To People); Mitre 10 (Proprietary Brand Transformation); NZ Automobile Association (AA Membership); Trustpower ($49 Unlimited Data Broadband) Campaign); Westpac New Zealand (Westpac One).