How Blackcircles uses Conventional Media to Boost Online Sales
As Blackcircles prepares to sign-up its 300th franchise garage, the company has also launched a service designed to give consumers instant access to mechanics across the UK. The move follows the launch of www.mechanic-torque.co.uk in which consumers can post queries about their car and receive an expert answer from a Blackcircles franchise mechanic. Since launching in early 2006, the Blackcircles franchise network has spread across the UK. The franchise arrangement sees local independent garages retain their identity, but gain access to Blackcircles’ stock checking and ordering systems. Blackcircles plans to increase the number of franchises to 500 by December and 800 within a year. The company has also launched a mobile tyre franchise and aims to increase its 35-van network to 100 by the end of the year. Franchises are allocated on a geographical basis ensuring that participants can grow their business.
With a 98 per cent customer satisfaction rating and 40 per cent referred business every month, Blackcircles is continuing to see strong revenue growth and expects to break the £10 million turnover barrier this year. This goal is being aided by a host of endorsements from companies and organisations including J Sainsbury, the British Chambers of Commerce, Air Miles, Auto Trader and Shell. ‘Conventional’ media You may be surprised to learn that utilising conventional media has had a dramatic effect on Blackcircles’s sales development over the years. The most recent example of this strategy came earlier this year when the company rolled out its “Powered By Blackcircles” service with Max Power Magazine and Car Magazine, enabling the publications to launch their own tyre services to readers. Discussions are now on-going to extend this service to wider Emap titles and open up new niche markets, such as vintage tyres. Another ‘conventional’ advertising method was particularly influential in the earliest stages of the company’s development. Mike Welch has gone on record as saying that his company “needed to start advertising from day one” in order to attract customers.
“I started by looking for places to advertise which I thought would reach our target market, such as car magazines like Revs and Max Power. I got the circulation figures and the demographics of the people that were reading these magazines…With advertising, your approach should always be targeted, never random,” the 28 year-old managing director commented. In 2004 the company spent between £25,000 to £30,000 a month on advertising at a time when its turnover was roughly £3 million. Despite representing only 1 per cent of total sales, the value of this investment was assessed every step of the way. In Welch’s opinion the emphasis should always be on targeting the right readers and publications with the right circulation: “After a few months of a particular campaign we analyse how it is working and then either pull it or continue to do more.” One such survey, conducted at the end of 2005, found that the company increased sales by 30 per cent following a six-week regional press advertising campaign.
The campaign also claims to have increased brand awareness three-fold, while simultaneously ramping up website traffic for Blackcircles.com during the same period. And if this isn’t proof enough of the validity of this approach, a quick look at the company’s recent sales development (see graph) shows that during this period the company almost tripled turnover. So, if you run a small business and are afraid that you will never be able to compete with “the big boys” in terms of advertising, Mike Welch has this advice: “When they start out, many businesses don’t think they can compete with larger firms…but they can. As long as you’re clear about the message you want to get across and know which media is right to reach your target market, a small business’ advertising can be as successful as anyone else’s…The key is not to bet too much on one campaign but to build up slowly.” For its part Blackcircles’ advertising strategy has evolved over the years. Asked about how the importance of communicating price in advertising has changed over the years, Welch explained that this can be both a help and a hindrance: “In the beginning our unique selling point (USP) was that we were cheap, but we wouldn’t sell at those prices now. Our USPs are now excellent customer service and value and all our marketing is designed to reflect this.” In the same way the styling of Blackcircles’ advertising is also becoming increasingly sophisticated. The earliest advertisements were all black and white, but now there are both increasingly colourful and increasingly stylised. New additions include national billboard and trial petrol nozzle campaigns, all designed to bring the online business to new virtual customers.
Speaking on the company’s development over the years, Mike Welch, managing director of Blackcircles.com, said: “The work we have done over the last year has enabled us to focus on those areas of the business that will produce the greatest growth. Our franchise network is continuing to grow strongly and our aim is to further align ourselves with the expertise of local independent garages and bring more of our 900 fitting centres into the franchise network. The partnerships that we have been developing on this side of the business are equally matched by our corporate partnerships. By using the Powered By Blackcircles model with the likes of Emap and MSN we are exposing the brand to both new customers and markets.” Welch added: “At the heart of the Blackcircles brand is an unswerving commitment to customer service and we are constantly refining our offering thanks to the feedback we gather from customers at every tyre change. The launch of Mechanic Torque is a way for us to help our customers and place Blackcircles at the centre of their motoring needs.”