CASE STUDY: Caterpillar's operator community yields results

Background

China is the world’s largest construction equipment market. Caterpillar is the market leader globally but nowhere near the top in China, as competition is stiff and Caterpillar products are on average priced 15 per cent higher than those of its rivals. International construction brands (Komatsu, Hyundai, Doosan, JCB, Volvo, Hitachi) and local ones (Sany, LongGong, XiaGong, LiuGong) also have disproportionately higher marketing budgets than Caterpillar.

The company was a late entrant to the game in China, but this meant it was free from category paradigms. Much like the fragmented construction industry as a whole, the customer base in China has not yet matured. Customers focus on the initial purchase price of construction machines and not on the lifetime value. There is limited knowledge about machinery other than price points.

Caterpillar argues that its equipment, though priced higher, is much cheaper in the long run when other machines start breaking down and the cost of maintenance creeps up. 

In terms of media, advertising on industry media outlets is expensive, and their circulation has a higher concentration in tier-one cities (Beijing, Shanghai, Guangzhou) but little effect in rural areas.

The communication challenge for OgilvyAction Beijing was thus to achieve higher customer reach and generate new leads without increasing marketing costs.

Strategy

The agency looked into making the invisible machine operator visible after analysing the relationship between Caterpillar's customer (company boss/business owner) and the end user (operator). The customer may pay for the machine, but its end-user holds strong influence in decision-making. OgilvyAction learnt that in China, business owners value operators who have specific skills to drive the machines properly and with care. When operators express their views about a machine, their bosses listen.

Most machine operators are very young—more than half are between 20 and 29 years of age. These operators spend more than 75 per cent of their leisure time online. Li Wei, a typical operator in China, lives in a rural area in Hebei and has two years experience in the industry. He has access to a shared computer and a smartphone.

Execution

OgilvyAction found that such operators spend a lot of time online but have never had an online community devoted to them. The agency created an engagement platform for them to connect with peers, much like a industry cooperative website.

To generate initial traffic, a kickoff event called the ‘Trackpal League Talent Show’ was organised to build hype for the website launch by utilising social networks within the industry. Entry submissions were voted for publicly over a course of six weeks, with one winner each week and an overall winner at the end of the competition. Winners were rewarded with Caterpillar boots, watches, caps and bags at an offline awards ceremony.

An electronic public relations campaign on Weibo, QQ groups and BBS announcing key developments about the talent competition drew attention to the website.

Results

• Reach: Through the e-PR generated, there were more than 7 million impressions.
• Engagement: 355,713 unique visits to the campaign site and 254,729 clicks on BBS posts.
• Acquisitions: 7,188 operator members signed up on the website.
• Validated leads: 108 validated sales leads, equating significant potential incremental sales.
• Collateral benefits: The campaign not only reached operators already using Caterpillar machines, but also began to spread to those operating competitors' machines.

By looking at category reality rather than existing marketing paradigms, and by focusing on the  target audience instead of the product, Caterpillar was able to increase affinity toward its brand and build a pipeline of future customers, especially in the rural areas of China. Campaign statistics are accurate as of end-2011, which won a bronze Dragon at the 2012 Promotion Marketing Awards of Asia.