October 29 -- If you're in the market for a chain saw or a
leaf blower, you might consider a product from Stihl.
But you won't find the company's products at Home Depot or
Lowe's. Stihl operates an independent dealer-only retail distribution program
that its leaders say is instrumental in helping the company dominate the
gasoline powered outdoor tool category.
But
that tactic means Stihl is one step removed from the marketplace. "It's
hard for us to get close to the customer," says Ken Waldron, director of
marketing. That made it difficult for Waldron, who came from the automotive
industry, to prove the returns on
his marketing investments.
"When
you're working for Chevrolet, you can see very quickly every Monday how many
Cavaliers were sold, to whom and in what geography," Waldron says.
"It wasn't until I came here that I realized that was a luxury."
Stihl
must collect data from many sources, some more complete than others. There is
no big market researcher for gas-powered outdoor tools and independent dealers
all track sales differently. Stihl belongs to the Outdoor Power Equipment
Institute, whose members report on U.S. shipments to wholesalers and retailers.
Other third-party research companies track retail sales. And Stihl itself collects
product registration and warranty card data. "It takes a bit of doing to
understand your performance," Waldron says.
Last
year, Stihl deployed Eye on Marketing ROI software from Black Ink to begin
analyzing the more than 10 million customer records it has generated since
2000. The goal is to find historical sales trends and help its thousands of
independent dealers as they compete with industry Goliaths for customer
attention.
In
a new program, Stihl has coaxed 5,000 of its retailers to participate in
regional marketing campaigns, in part to show potential customers there's an
alternative to the big box stores. "We're marshaling this army of
retailers who see Home Depot and Lowe's as the enemy," Waldron says.
"All of them want to better understand
their return on marketing effort." Stihl's analytics will give them
"more reason to believe in what we're doing in the face of enormous
category killers," he says.
In-depth
customer data analysis can raise marketing's profile inside a company, says
Laura Ramos, an analyst at Forrester Research. "Better use of data and
reporting helps marketers make the transition from the role of brand center to
the source of insight."
Stihl
identified two customer types: "Eddy Expert," the baby boomer who is
familiar with the brand but may soon be aging out of its products, and
"William Wannabe," the Generation X or millennial homeowner who
represents the next wave of potential Stihl customers.
Stihl
has historically focused on boomers. But analysis revealed that if the company
had redirected some recent marketing programs to target 30-to-40-year-olds, it
could have captured over $200 million in additional sales at retail by
increasing the number of customers it has in that age group by just a couple
percent, Waldron says.
Such
analytics will drive changes in marketing strategies at distributor stores and
loyalty programs in 2015. The "ability to profile who is buying, when they
are buying and where they are buying, in a far more granular fashion, will
allow us to better target our media and messaging investments," Waldron
says. "The notion of effective micro-marketing against specific audience
segments is no longer fantasy, it is reality."
Stephanie Overby www.cio.com
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