Dec 23, 2015
RIDGID POWER TOOLSDATABASE MARKETING PROJECT
Introduction of Client
INTRODUCTIONThe RIDGID Tool Company is an American manufacturing company that makes and distributes hand tools under the RIDGID brand name. The company was founded in 1923 in North Ridgeville, Ohio. In 1943, it relocated to its current location in Elyria, Ohio, and in 1966, it became a wholly owned subsidiary of Emerson Electric RIDGID tools are targeted at the plumbing, pipe fitting, construction, and HVAC, trades. The brand is best known for its distinctive red pipe wrenches, but the company manufactures over 300 different types of tools. The company also sells power tools, largely made by TTI, and wet/dry vacs, made by parent company Emerson.
Problem Identification - Reverse sale decline in a competitive market place.
Objectives: - Increase the sales of RIDGID by 5% in year 2015.
SWOT - AnalysisSTRENGTHS WEAKNESSES
Lifetime Service Agreement (Warranty). Hands on training by expert instructors.
Customer database has gaps and it is not leveraging.
Modest budget in comparison to competitor brands.
No focus on building relationships with customers.
Growing DIY market. DeWalt offers steep discounts during competitor promotions.
Overcome the competition at niche supply chain.
SWOT - AnalysisStrengths Indicated Actions
Lifetime Service Agreement (Warranty).
Hands on training by expert instructors.
Use this feature as a mechanism to make the data competent by encouraging customer to register.
Highlight this feature as RIDGID’s point-of-difference.
SWOT - AnalysisWeaknesses Indicated Actions
Customer database is incompetent for enhanced analysis and has not been leveraged well.
Modest budget in comparison to
Less focused on building effective relationships with customers.
Company can leverage the customer database to increase the share of the customer
Use database marketing to maximize customer spent
Company can build an effective loyalty program
SWOT - AnalysisOpportunities Indicated Actions
Growing DIY market
Dynamic renovation market
Overcome the competition at niche supply chain.
DIY customers can be leveraged as the primary target segment.
Opportunity to target this growing market
1. Price game.2. Provide strong point of differentiation.3. Focus on other customer segment.
SWOT - AnalysisThreats Indicated Actions
DeWalt offers steep discounts during competitor promotions.
Competition at niche supply chain.
Find a unique selling point other than prices so that consumers look for some thing more than just products when they buy it.
Grow footprints in Home Depot to overcome competition.
Shift the positioning of RIDGID from the middle of DIY and Contractor segment to only Serious Do It Yourselfer.
Segmentation:Recency & Monetary Analysis Recency:
Figure out the Recency basis date of purchase of product
Sort the data on date of purchase column and arrange in descending orderGroup this data in 3 groups
First group will be 3 which are most recent customers
Second will be number 2 which is less recent customers and third will be number 1 which least recent customers
Figure out the monetary by the amount spend by each customer
Sort the data in amount field in descending order. Group this data in 3 different groups as 3, 2 and 1
R3 R2 R1
33 32 31
Cross Sell/ Up Sell
Segmentation Count of Cust.33 171932 217631 427223 123922 154221 442913 90012 123611 5863
Segmentation RIDGID has got its own base of DIY customers.
Using this segmentation we can easily target the households which are our potential customers.
For marketing we should use different mediums like Direct mailing targeted to a particular group of customers and would be much more specific to what RIDGID is doing right now.
Home depot and RIDGID target particular stores and have exclusive marketing strategies for instance a team of professionals at Home depot store would help DIY customers to demonstrate the tools.
StrategiesTailored Customer Messages
This is the first broad strategy under which all the customer Communication should be customized to the Six major customer Profiles. This involves Five major profiles that form roughly 50% of the customer base according to PRIZM of the postal codes they belong to form the data of 2014. And the last segment
will be sent a standard format of Communication for the rest 50%.
We would target the DIY customers using PRIZM Analysis according to the Demographics because it gives us a better understanding about the Geographical positioning of RIDGID.
Codes Subset Population Count Penitration IndexE1 3 4,541.00 157E2 4 3,844.00 123.5S4 5 5,843.00 146.8T1 4 5,411.00 192.25R1 3 2,332.00 139
Total Population 45,033.00 Total Population for Above segments 21,971.00 Percnetage 48.79
Segment Description & Strategy Retain
This is the segment of those customers that have been recent with us and have spent high on our brand. They those customers that are High on monetary value and mediocre and high on
Recency value. These are the customers who have spent a lot with us & have recent registrations with us.
Retain our high value customers with special offer and tailored messages
Segment Description & StrategyCross Sell/ Up Sell Segment
This is the segment of those customers that are high on potential. They those customers that are mediocre or low on monetary value and mediocre and high on Recency value.
Cross sell and upsell the next logical product and relevant offers with tailored customer messaging
Segment Description & StrategyWin Back
This is the segment of those customers that we have to win Back again with all our Special Privileges. They those customers that are mediocre or high on monetary value and low on
Win back our lapsed customers with customized communization and special Offer
Segment Description & Strategy Referrals
Incentivize existing customers for introducing and getting more customers to RIDGID
Tactics ImplementationRetain:Introduce Premium Loyalty ProgramLabel the customers as VIPSend them thank you emails for buying RIDGIDSend them Birthday/Anniversary E-cardsArrange Onsite product demonstrations and technical helpSend them mailers on new product launch and promotionsInvite customers to new store promotions/premiers Opportunity to purchase exclusive products prelaunch
Tactics ImplementationCross Sell & Up Sell: Contact customer through email & direct mail and suggest them next logical product
Special pricing for cross selling & up selling
Introduce loyalty program to encourage repeat purchase
Send them mailers on new product launch and promotions
Suggest relevant product accessories
Tactics ImplementationWin Back: Introduce points system reward program for each purchase
Send these customers customized letter for example
Send these customer discount coupons on various products
For the customers with tools already registered, lets provide them with points worth their previous spend as one time win back discount
Referrals: In addition to existing loyalty program, provide one time referral points to existing customers for bringing new customers to RIDGID
RIDGID Loyalty Program• Point-based loyalty program
• Points can be earned on the on Customer’s Unique ID while purchase
• for example, 1 point for every $10
• They can redeem points as certain amount (i.e. 500 points for $10)
• New customers will be given an ID number when they register
• Old customer can use their already registered IDs
• This will mainly encourage repeat purchase of RIDGID Products by Contractors
RIDGID Referral ProgramIn addition to Loyalty program, RIDGID can greatly benefit from referral program. Referral program will encourage existing customers to earn more reward points.
• Under referral program, customer can refer another customer to RIDGID
• Existing customer will get bonus points on each referral
• for example, 200 point for each referral
• Referred customer will quote the existing customer’s ID number at the time of purchase
• Bonus points will be credited in existing customer’s ID number
• Customer can redeem these points for any next purchase from RIDGID
• Customer will be informed about referral program through emails & direct mail
Testing : Direct Mailing & Email
SAMPLE SEGMENTTATION TESTING SAMPLES Results
Retain Segment size Test size A 5 %Test size B 5 %
Cross Sell/Up Sell Segment sizeTest size A 5 %Test size B 5%
Win back Segment size Test size A 5 %Test size B 5 %
Testing : Direct Mailing & Email
Topic Direct Mail EmailRetain “Thank you for buying Ridgid”. You are now
a member of our Premium Loyalty Program, avail the benefits on your next purchase”.
Cross Sell/ Upsell “Thank you for buying Ridgid”. You are now a member of our Loyalty Program, avail the benefits on your next purchase”. Here are some products that might interest you.
Win Back Its been long we haven’t heard from you. We value your association with us. Come in to avail your special discount on next purchase.
MEASUREMENT : Direct Mailing & Email
Topic Direct Mail EmailRetain Number of Customers come in to buy our
product. And spend per customer.
Cross Sell/ Upsell By the click through rates and number of purchases through landing pages or store purchases. And time spent on our website. And spend per customer.
Win Back By the click through rates and number of purchases through landing pages or store purchases. And time spent on our website. And spend per customer.