Inside Caterpillar Inc.: tips for B2B communications - Brightest Minds series

26 Oct 2016

  • Analytics
  • Strategy
  • Data

Caterpillar Inc. is a large earth moving machinery company that has been around for 90 years with a wide and diverse portfolio of products used across various industries such as mining, residential and commercial construction and government.

Connie LaFlamme, Senior Marketing Consultant at Caterpillar, is responsible for B2C and B2B channel partner communication programs. Her areas of expertise include channel partner marketing, data-driven marketing, lead generations and global brand management.

At ADMA’s Global Forum 2016, Connie delivered a fantastic presentation on revenue generation through communications.

We sat down with Connie afterwards to talk about data, analytics and B2B marketing communications.

Q. How have you approached data when it comes to your particular customers and how do you use data to analyse those customers?

A. The kind of data that we use is specifically third-party data that is available because of the companies being registered businesses. So one of the primary data points that we use to target these customers is something called the SIC Code or Standard Industry Code. And with that information we’re often able to get not only the company name but details around the company’s size, how many employees, average sales revenue.  And then through transactional data we can see what types of machines they’ve purchased, whether it’s from us or the competitors, whether they financed, the number of machines owned. What we’re primarily interested in, though, as a starting point is the industry, so, again, we start with that Standard Industry Code and we go from there.

Q. So how have you been able to use that data to better customise your sales and marketing efforts to your customers?

A. Well, the first thing I need to talk about is that the traditional Caterpillar business model has always been large equipment for large customers - large known customers.  So it’s mostly been a brand and relationship game. So people know our product, our distributors know the customers, and so it really comes down to building a relationship. 

In the compact equipment business, it’s quite different, it’s much more retail-like, much more mass market, so we have to use data to try to pinpoint prospective customers. 

In the North American market we’ve been able, though data, to surmise that we know about 48% of customers, either because they’re Caterpillar customers already or because they’re competitive customers and we get that through finance transactional data.

We get our transactional data from a source called UCC. It’s quite unique to the US, it’s not even available in Canada, for example. It is a reporting of all financed machine purchases - which is a very right data source. In places where that information is not available, we use sources called Info USA and Info Canada, Dun & Bradstreet, for example.

We will often have our distributor sign a non-disclosure agreement with one of these companies, they’ll send their entire customer database and it will be bumped up against these lists to identify people that our dealers don’t know about.

We’ll get those lists on behalf of the dealers and market to them.  We use data for first targeting, but also for messaging.  So we’ve got to know a bit about how these customers operate in their particular industry because what’s important for a snow and ice removal company is completely different to what’s important to a guy using loaders in his dairy operation, for example. Very different emotional drivers, very different operations. 

We use the data to pinpoint, we use industry information to message and really speak to what the customer’s pain points are and how our product and solutions solve them. 

And then we often do the campaigning on behalf of our distributors.

Our distributors, again, are built and scaled to really operate on selling large equipment to large customers, not so much many small machines to a mass market.

So Caterpillar Inc. uses the data really to campaign on behalf of dealers, creating pull on the dealers by these new customers.

Q. I presume that part of the challenge for you is that you don’t always then own that end relationship with your customers?

A. Our dealer network worldwide is over 200 plus dealers, they’re all independently owned and operated businesses. It’s not a franchise model so they each operate differently and they sell to the customer.

So that is actually very much one of our competitive advantages - our dealer network.  We can set up a sales consultation or a lead for a dealer to follow up on, but that dealer must do the follow-up because the transaction will take place between the dealer and the customer and the dealer very much owns the relationship.

Q. Caterpillar focuses on tracking sales data, which is directly linked to your marketing expenditure, so that you can get great information in terms of ROI. How do you approach this?

A. We have to get very creative because, again, we’ve got independently owned and operated dealers with their own sales transactional and CRM databases.  So in order for us to track any sort of lead or sale attributable to a campaign, we have to set it up in such a way to directly collect the data.  In some campaigns that we’re running right now, which we refer to as conquest campaigns, we, Caterpillar Inc. offer an incentive to the customer to contact the dealer to have the sales consultation.  We fulfil with a pair of Cat boots but they’ve got to go online to complete their contact data to get the boots. So then we’re getting all the contact data, and we know that the sales consultation occurred. 

Email addresses are very hard to come by so when the customer goes to the landing page to get their boots after reporting the sales consultation, we’re able to capture their email address, so then they’re also able to go into various marketing automation campaigns.

Then we also offer a purchase incentive, which is a prepaid Visa card in varying amounts, depending on the machine purchased, and the dealer’s salesperson has to submit that sale on the campaign landing page for the salesmen and they have to include the model number and the serial number and they also have to let us know if this was indeed a new customer to the dealership.

So we’re able to get real-time tracking and report out weekly through the duration of the campaign so it’s directly attributable. These campaigns have had tremendous ROI, we’ve driven significant revenue and our new customer acquisition rate is quite high.

And this has really been very good for our department as a whole because while awareness is very important to customers, to our leadership and management it’s all about the bottom line.

So our group has built tremendous credibility and we’ve received really way more resources and funding and responsibility as a result.
We very much represent the dealer so it’s very common for a customer to think that the Cat dealer and Caterpillar are one and synonymous and that really is—it really works well because we don’t really want to get in the way of a relationship between a customer and a dealer, we just want to facilitate it.

Q. How have you used channel partner marketing to improve your business results?

A. We develop a turnkey campaign for our dealers: we pull the customer list, we develop the strategic and we do the creative development of all the materials.  We hold webinars because we have to get 51 dealers in the US and Canada engaged in that campaign. And we do all of the fulfilment and the reporting. So by my definition, that’s channel partner marketing. We’re really assisting the dealer in going out and marketing to this customer base that, again, they’re not entirely comfortable with.

You use webinars with the dealers to actually get them on board with that concept and with that campaign, is that right?
Absolutely. Right, because I can develop the best campaign and execute it beautifully but if the dealer doesn’t follow up, then it’s not going to be a success.  But I also need the dealers to report back to me what works, so we hold a debriefing after each campaign – talk about what worked, what didn’t work, what could we improve.

We’re always looking for continuous process improvement, but it also builds a relationship between me and the dealers.  I’m competing internally at Caterpillar with our dealers because there are many divisions at Caterpillar, different product lines. Our dealers also are distributors for other complimentary brands and so they’re bombarded. So the better job I can do of developing a brilliant turnkey solution or campaign with all the fulfilment handled, all they have to do is have the salesmen follow up. 

Then I’m getting, basically, top of mind awareness with the dealer about my division’s campaigns, we build that relationship, we open up that dialogue and it’s really been a win/win.

Q. What are your top three tips for companies really looking to improve their B2B marketing and communications?

A. Well because we have this distributor model where we sell through our independently owned and operated dealers, my suggestions would be based kind of around that. 

But first and foremost, if your distributors will not go out and hunt for new customers and prospects, do it for them.

Our 2020 goals at Caterpillar require that 40% of that business is with new customers.  So if these dealers aren’t going to do it, we’re going to do it for them.  And I like to say I play the matchmaker, I’m basically trying to get these two parties to meet. 

Secondly, create an environment within your marcomms teams for innovation. 

We sell to small entrepreneurial businesses and our business unit that supports that is also very lean and nimble, and we have a fail fast environment, we get to pilot and test.  We’re given the budgets to try new things. When something succeeds we jokingly say, we lather, rinse, repeat.  Lather, rinse, repeat, we keep doing what’s successful.

But we also are able to fail.  We’re given the opportunity to fail and in that we learn so much.  So give your teams the resources to pilot and to test and to learn and to fail fast, if necessary. 

And lastly, I would say for marcomms teams not to be afraid of being measured by sales. 

Honestly, that’s been one of the best things that could happen to us because it gives us the resources to really do the full integrated marcomms.  But since we’re able to really drive revenue we’re given the responsibility and the budget and the resources and there’s been greater sales and marketing integration as a result.

Q. As marketing gets more sophisticated what do you think is the role for analytics and data?

A. We currently have a person in our group who’s on a rotational development that’s in our data analytics group at Caterpillar. And this person, within a matter of weeks, has become absolutely indispensable.

I would say it’s everything.  We have to know how to integrate all the various data points, how to use that data to go to market with new cost effective means, we have to be able to analyse the work we’re doing.

Management wants to have their pulse on what’s going on at any given time, so building those dashboards and then using the data to do predictive analytics so that we can really allocate our resources in very targeted ways that will have really proven ROI. 

I can’t say enough about it, we’re very dependent on this person already, she happens to be quite young. And I really see that a lot of people in that space are very young and innovative and they’ve become a seamless part of the team.

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