CLIENT OF THE WEEK - BrightHouse will spend £1.5m on pre-Xmas direct marketing, but Royal Mail won't see any of it

Alan Beesley: To some extent the market has changed in our favour but we're also benefiting from changes to the business and investments made across the board. The business has been completely redeveloped in terms of customer proposition - we've opened 40 stores in the past two years.

The heartland is Scotland, the North and the Midlands but we have opened a significant number of stories in the South of England - in Lincolnshire and in Aldershot, and we've just opened in Southend and Dartford.

Q: Your site promises "no credit checks". Isn't that a bit risky in today's environment?
The payment record of our customers is very stable. We've not seen a particular change in their habits. They're good budgeters and pay for things weekly.

We're a high street relationship business. The stores are based in the communities in which we serve and most of our staff live within that community. It's a know-your-customers model, basically. Ultimately that local manager makes that decision [to extend credit].

From our point of view it's about creating accessibility. We do ask customers to give us five references as a check so we can confirm that people are who they say they are.

Q: You're spending £1.5m in the run-up to Christmas. On which channels can we expect to see the TV ads appearing?
We're running a combination on terrestrial, digital and satellite - ITV, Channel 4, five, ITV 2, Fiver and a mixed station bag of niche stations, such as Living.

Q: Are you able to buy media more cheaply nowadays?
The key is not to chase the deal and to understand who your target audience is. With that as a building block, we've seen more [media] people coming to the table with deals.

Some of them are spot buys - channels we've not had on the schedule in the past asking us to consider them, to which we say ‘you need to give us a deal'. At the same time we reassure our regular channels with a certain amount of guaranteed spend over a certain timeframe.

We do two bursts of TV a year, in Spring and Autumn. September to December is peak time, as well as mid-March through to June.

Q: You're using local newspapers and TNT Doordrop Media to deliver catalogues. Is Royal Mail out of the picture?
We've excluded Royal Mail and have gone with Newshare [insertion in local newspapers] and TNT's own [delivery] teams.

We made that decision before the current strike, because we were really hurt by the 2007 strikes. Royal Mail own the 'last mile' – it's a monopoly situation and we are forced to accept that.

But in door-to-door we made a specific decision to avoid Royal Mail as a direct result of the 2007 strikes. That impacted significantly on the effectiveness of our door drops. We had big volumes in the pipeline and two weeks' distribution had to go into one.

Q: Has the decision been worth it?
No matter what business you're in, you should try and keep things in your own hands. If you can mitigate risk, do it. That's what we've done with door drops. We only do door drops two or three times a year.

If we were like Lidl and dropping every week, you could spread the load. But we can't. Newshare volumes have been falling, but where we haven't got Newshsare we use TNT's own teams and it's more expensive.

That's a key reason why we have moved towards using TNT's ‘HIT' targeting tool. We are looking at more granularity and round levels, improving the targeting and reducing the volumes, which helps reduce the distribution costs.

We are very much about ROI and have worked with the guys at TNT for three years at least. We work closely with TNT's planner Rob Wilcox.

In tests we've managed to maintain the level of impact because of the improved targeting. With our customer database and transactional data, together with TNT's Mosaic profiling tool, we know our return by postcode.

Q: To what extent does BrightHouse do digital, for example paid search?
We maintain what I call an infomercial website designed to provide a first contact point to explain the proposition. Consumers can make an expression of interest by giving us their email address. There is no pre-qualification, but if you decide to buy, we do capture your email data.

We have done paid search and affiliate in the past. And to be honest, we found that the majority of our customers respond to TV, and that they're predominantly a day-time audience. And the results we get from TV advertising in website traffic spikes mean we don't have to invest in paid search - at present.

We are now finding that when the ads run, the number of hits to the site rises significantly. It suggests to me that people are happy to access the internet while watching the TV, rather than picking up the phone.

Q: High street stores...an infomercial website...isn't your proposition a bit old fashioned?
Our proposition is unique in that we're the only furniture provider on a payment-by-week basis. There is a store card but in terms of high street presence, we are unique.

We are very much a community-based retailer, so a high street presence is fundamental to us as a business. Our customers tend to be on a budget and generally come into the stores every week – we know them by name and it's a face-to-face relationship.

So we will be expanding that - we're opening 20 stores each year in the UK.

- ends -