Database Marketing Project RIDGID POWER TOOLS Database Marketing Project

Introduction of Client The 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. Increase sales through referrals and increasing the spend of the customers.

SWOT - Analysis STRENGTHS 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. OPPORTUNITIES THREATS Growing DIY market. DeWalt offers steep discounts during competitor promotions. Overcome the competition at niche supply chain. Growing DIY market: http://www5.statcan.gc.ca/cansim/a26?lang=eng&retrLang=eng&id=0260013&paSer=&pattern=&stByVal=1&p1=1&p2=31&tabMode=dataTable&csid=

SWOT - Analysis Strengths 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 - Analysis Weaknesses Indicated Actions Customer database is incompetent for enhanced analysis and has not been leveraged well.   Modest budget in comparison to competitor brands. 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 - Analysis Opportunities 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 Price game. Provide strong point of differentiation. Focus on other customer segment.

SWOT - Analysis Threats 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.

Repositioning Strategy Shift the positioning of RIDGID from the middle of DIY and Contractor segment to only Serious Do It Yourselfer.

Segmentation: Recency & Monetary Analysis Figure out the Recency basis date of purchase of product Sort the data on date of purchase column and arrange in descending order Group 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 Monetary: 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

Segmentation Segmentation Count of Cust. 33 1719 32 2176 31 4272 23 Recency R3 R2 R1 Segmentation Count of Cust. 33 1719 32 2176 31 4272 23 1239 22 1542 21 4429 13 900 12 1236 11 5863 Total 23376 Retain Win Back M3 M3 33 32 31 Monetary Cross Sell/ Up Sell 23 21 M2 22 Deprioritize M1 12 13 11

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. Re Do As per the R & M Model That Norm Suggested with the BOX Diagram.

Strategies Tailored 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.

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. Strategy Retain our high value customers with special offer and tailored messages

Segment Description & Strategy Cross 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. Strategy Cross sell and upsell the next logical product and relevant offers with tailored customer messaging

Segment Description & Strategy Win 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 Recency value. Strategy 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 Implementation Retain: Introduce Premium Loyalty Program Label the customers as VIP Send them thank you emails for buying RIDGID Send them Birthday/Anniversary E-cards Arrange Onsite product demonstrations and technical help Send them mailers on new product launch and promotions Invite customers to new store promotions/premiers Opportunity to purchase exclusive products prelaunch Value Based reward program: Customers who have bought in last 2 years from RIDGID for a certain value. Provide them discount on their next purchase. Communicate this to existing customers through email or messages.  Frequent buyer Reward program: Customers who are buying regularly from RIDGID run a reward program for such customers and provide them discounts on their next purchase or free gifts

Tactics Implementation Cross 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 Implementation Win 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 Get ideal customers to be VIPs: People just love being VIPs or gold members of the programs. Identify most valuable customers basis value and frequent purchases and send them thank you mails for doing business with RIDGID. Addressing them as VIPs or Gold customers. Make them part of loyalty reward program.

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 Program In 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 % 1719 86 Cross Sell/Up Sell Segment size Test size B 5% 1239 62 Win back Segment size 4272 214

Testing : Direct Mailing & Email Topic Direct Mail Email Retain “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 Email Retain 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