Feature

Targeting Those Big Spenders - (problem solved)

Nick Mavrick knew he had some heavy lifting to do. As vice president of global strategy and marketing at Volvo Rents, Mavrick needed to cultivate and grow his loyalist base. Some 10% of Mavrick's customers -- renters and buyers of agricultural machinery -- represented 80% of revenue at the $180 million Asheville, N.C., division of Volvo Construction Equipment North America Inc.

Mavrick considered a customer relationship management (CRM) system to help identify his most valuable customers, but he didn't like his options.

"I looked at Onyx and I looked at Siebel -- all the way down to Salesforce.com," Mavrick recalls. "They are great companies. But they say, 'You buy our software because you'll know exactly what your salespeople are doing.' Employees see through that pretty quickly -- and it doesn't focus their behavior on the key actions.''

So Mavrick did something unconventional. He contracted with Bernstein-Rein Advertising Inc. in Kansas City, Mo., to create a database and software to push out monthly reports describing the psychographics of his customers. The database contains data from point-of-sales transactions at stores as well as customer notes that salespeople add. The more they use it, the more intelligence the reports include.

Based on the new data, Mavrick cancelled his mass marketing budget and handed his $600,000 advertising budget directly to the sales staff at the company's 60 retail outlets.

"The sales folks feel empowered because they control the spending," Mavrick says, "but we've controlled the strategy." That means a new fishing rod and a case of Omaha steaks for the guy who bought the most backhoes last month, if that's what he likes. The result? Volvo Rents has doubled its customer base in the past 18 months and the number of key loyalists grew by twice that. Problem solved.

Ellen O'Brien, a former senior editor at CIO Decisions, is now a senior editor at Storage magazine. Write to her at eobrien@techtarget.com.

This was first published in May 2005

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