Snap-On: building value by focusing on the core
BY ANNA EGGLETON, Managing Partner and Head of Service Brands
Business to business isn’t seen to be at the cool end of marketing but it’s where one of the most successful and iconic brands resides. Snap-On is the most “in-demand product in its category”, achieving 65% penetration of its market in the US and a 10% price premium over its closest competitor.
Below I suggest some of the reasons for their success.
1. Relentless focus on the product “sausage”
One of Snap-On’s key values is an “unwavering commitment to high quality” and, unlike many companies, it is prepared to make some tough decisions to ensure it actually delivers this. One of these decisions was to keep almost all its production in the US. So while Snap-On customers don’t necessarily like paying premium prices they do so because they believe there is a difference – “Snap-On make the best stuff. They charge the heck out of you but it really does work better.”
2. Winning via Distribution
The company has long recognised that distribution is key to its success. Snap-On have two unusual methods for achieving near perfect distribution. Firstly they operate a franchise model, with each franchise owner visiting each of their 300 customers every 3 weeks. Second, they offer interest-free credit. This enables all potential customers to access their premium products both geographically and financially. This focus on distribution is based on two insights:
- Time out of the garage is money lost, so the ‘shop’ visiting the garage saves the garage money.
- Enabling the mechanic to have the tools they need in a way they can afford. It isn’t unusual for a mechanic to spend £20,000+ on tools in his lifetime but most struggle to find the cash upfront for the purchase. So interest-free credit with payments often being picked up in person enables all levels to access Snap-On products
3. Driving distinctiveness
Snap-On doesn’t do traditional advertising. Instead it focuses on building memory structure by continually exposing its target market to the brand in a way that is distinctive. The brand is “baked in” to the products and service. A red Snap-On tool chest is a tangible every day reminder and the logo is embossed into all the tools. The distinctive sales van arrives with a uniform-wearing Snap-On franchise owner activating the brand in person, spending 15mins talking about what’s new or how Snap-On might solve a problem.
Incredibly the brand is still recognizable from its launch in the 1920s.
4. Refreshing the core
Snap on have never diversified away from their core customer, but they do refresh their offer. In recognition of how the industry has changed Snap-On are moving into diagnostics and added value services such as digital invoicing. The company is still targeting the same customers, but recognising their needs are changing.
In conclusion, I think Snap-On deserve a round of applause for relentlessly focusing on its core while keeping the brand fresh and distinctive, driving market share and supporting a premium position.