Computers and artificial intelligence have come along at an exponential rate over the past few decades, from being regarded as oversized adding machines to the point where they have played integral roles in some legitimately creative endeavours.
Leveraging data has been key to building Caterpillar’s brand in the compact and small equipment market segment and reviving its customer engagement strategy in a way that boosts revenue.
While the 90-year old global company is known for its large construction equipment and ‘Cat’ boots, marketing communications manager and certified brand advocate, Connie LaFlamme, said a lot of people didn’t know the company also sells small, compact equipment.
“We’ve only been doing compact equipment for 15 years, so the challenge was to try and market a product that not a lot of customers knew about,” LaFlamme told attendees at the ADMA Global Forum 2016 in Sydney.
The brand’s customers mainly work in sectors such as commercial and residential construction, landscaping and agriculture and are usually business owners and operators.
“What we found was we had 58 per cent unknown customers in the small equipment segment, a sort of big black hole in the market,” she said. “It was my job to find these folks.”
To do this, the brand leveraged rich data sources in the US and Canada, along with third-party data and external sources, to find those unknown customers, LaFlamme claimed.
“Through the data, we looked at standard industry codes where these customers may be involved in and also see how many of these customers were purchasing equipment, the types of equipment and quantity of machines,” she said. “We could also see whether they were financing or paying cash, so there was a lot of data out there.”
But given Caterpillar’s traditional business model of not directly selling to the customer but via dealers, LaFlamme said the challenge was to essentially leapfrog the distributor.
“I had to get to those customers and create pull for the dealers,” she said. “I almost had to play matchmaker.”
Another challenge was that while customers already saw the Cat brand as aspirational and conveying success, those just starting out felt they couldn’t afford the products.
“The new guy with the dirty vest and shoes isn’t comfortable with going into the ‘Taj Mahal’ of a dealership to buy Cat products,” LaFlamme explained. “And we felt the dealers aren’t going out to reach to these customers, we’ll find a way to do it for them.”
With most Cat customers onsite and not using mobile or email as much as other industries, LaFlamme organised physical letters delivered to their mailboxes.
“I sent mail to either their home or business address and what I incentivised them to do was to go on that ‘first date’ with their Cat dealer,” she said. “I offered them to have a sales consultation with their Cat dealer and receive a pair of Cat boots. And I tell you, a pair of Cat Boots will get the customer moving to pick up the call and call their respective Cat sales representative.”
LaFlamme then wanted to pave the way for customers to establish long-term relationships with dealers so that they purchased the right machines, rented equipment or purchased parts. But if the dealer doesn’t follow up, then all of these efforts would be of no value, she said.
“The next challenge was to push dealer engagement with customers,” she said. “I had to create a turn-key solution for the dealers, and make them believe that they will success with this. I needed to ignite competition between all these independently owned businesses - and a lot of work goes into these sort of conquest campaigns.”
As a result of her team’s efforts, Cat saw an increased reach to more than 510,000 customers, yielded over 4200 sales consultations and leads, saw an average sales close rate of 33 per cent and achieved $53 million in revenue.
“We continue to learn and debrief to see what worked, what didn’t work and what we can do better,” she added.