BLACK SEAL | YETI NEW ZEALAND

CRM Strategy

Michael Wauters ID: 1337055

14-May-12

Page 1 of 8

Contents:

Who is Yeti NZ? ............................................................................................................................................. 2

Yeti NZ’s competitive environment: ............................................................................................................. 2

Santa Cruz: ................................................................................................................................................ 2

Avanti: ....................................................................................................................................................... 2

Scott: ......................................................................................................................................................... 2

Market size: ................................................................................................................................................... 3

Profile of typical customer in each segment: ............................................................................................... 3

Objective of CRM strategy: ........................................................................................................................... 4

My CRM strategy: ......................................................................................................................................... 4

CRM software requirements:........................................................................................................................ 6

References: ................................................................................................................................................... 8

Page 2 of 8

Who is Yeti NZ?

Yeti NZ is part of Black Seal, a small company who sells premium mountain bikes and gear

aimed at passionate riders who demand the best quality (Yeti NZ, 2012). The company’s vision

is to provide the best mountain bike brands to passionate riders at a low cost with a fantastic

service in an ecologically, socially, and financially sustainable manner. Yeti NZ has three staff

members, founder Kasha Leuchs who has spent twelve years racing pro XC around the world

before starting the company as a way to continue his passion for the sport, Zeph who works on

sales and service, and Mel who is the office/warehouse manager (Yeti NZ, 2012). The team at

Yeti NZ wants to share their love of cycling and inspire people to ride bikes more often in NZ

(Yeti NZ, 2012).

Yeti NZ’s competitive environment:

Santa Cruz: Santa Cruz is based in California and sells Cross Country and Trail bikes in NZ and

internationally. Like Yeti NZ, they believe that to build a decent bike, you must be passionate

about riding yourself (Santa Cruz USA, 2012). This is why they claim that all of their staff ride

on a daily basis and share a common obsession and bond for riding (Santa Cruz USA, 2012).

Santa Cruz sponsors famous riders such as Greg Minaar by supplying them with their bikes and

riding accessories (Santa Cruz USA, 2012). They also provide frequent Demo tours around

California similar to that of which Yeti NZ provides in NZ (Santa Cruz USA, 2012).

Avanti: Avanti is a “home grown brand that continues to put their athletes in front at an international

level” (Avanti NZ, 2010). They have been producing bikes for over twenty years in Australia

and NZ (Avanti NZ, 2010). In June 2004, Avanti implemented a new Crossware CRM system in

order to improve communication flow and issue resolution (iStart NZ, 2011).

Scott: Scott sells sports gear and mountain bikes internationally. Scott has a long history in bike

production which started in 1989 when they introduced the most significant product innovation

in the history of cycling, the aerodynamic handlebar (Scott SA, 2012). This handlebar was used

by Greg Lemond in his 1989 Tour de France win (Scott SA, 2012). In 2003, Scott presented the

lightest frame on the market (Scott SA, 2012). Scott’s core competency is based on their lengthy

history and mass experience in bike production. Their customers believe they are receiving a

Page 3 of 8

quality product when they purchase a Scott bike because of Scott’s vast experience and

knowledge in this field. Scott sponsors many professional riders by providing them with their

bikes and gear to use whilst participating in international events. Scott doesn’t have a tribe like

Yeti NZ does.

Market size:

To get a general idea of the total market size, I consulted a SPARC survey conducted by

RideStrong in 2007-2008. This survey shows that the largest age group who had participated in

biking for sport, recreation, or for active transport between 2007 and 2008 was between 35 and

49 years (302,000 people, making up 32% of survey participants) followed by the 25-35 age

group (146,700 people making up 26.8% of the survey participants) (BikeNZ, 2008). It is

important to note the 35-49 age group has had a 14% increase from 2000 to 2008 (NikeNZ,

2008). 30-50 years is the primary age group which Yeti NZ is currently targeting. These statistics

show that overall this is a large and fast growing market. According to a Land Transport survey

conducted from 2003 – 2007, 13-17 year olds ride bikes much more frequently than the 18+ age

group (20% of participants reported riding a bike on at least 5 days in the month previous to

taking the survey) (BikeNZ, 2008). This age group may be another promising market for Yeti, as

they are well known for spreading word of mouth. If this age group experiences Yeti bikes early

and their changing needs are catered to, they are likely to remain Yeti customers for life.

Profile of typical customer in each segment:

According to a New Zealand Mountain Biker magazine reader survey conducted in 2010, 92% of

readers are male and are aged between 36 and 40 with an average income of over $80,000 (Spot

on publications NZ, 2010). The type of consumer who read NZMTBR has a passion for

mountain biking as 44% of readers have been riding for more than 7 years (Spot on publications

NZ, 2010). They can be classified as “Sportos” (Wiese, 2010). These are people who like to push

their mountain biking to the limit and like to feel as though they are part of a group who share a

similar passion, as this gives them a sense of identity (Wiese, 2010). They rely on internet

reviews, magazine reviews and WOM from their friends to gather information prior to making a

purchase (Wiese, 2010). 1% of readers currently own a Yeti bike whilst 11% of readers are

considering purchasing a Yeti bike for their next bike (Spot on publications, 2010). This is a

promising sign, as it shows that Yeti has improved at reaching out to this market by making Yeti

top of mind. Cross country is the biggest growing type of mountain biking that readers

participate in, increasing from 48.6% to 74% from 2009 to 2010 (Sport on publications, 2010).

Cross country riders can be classified as a sub segment of the “Sportos” and typically enjoy long

Page 4 of 8

distance championships, are “24 hour riders”, give fun and fitness equal weight, and enjoy

panoramic views (Cannondale, 2010).

Other customer segments in the mountain biking market include “Round the Blockers”,

“Fashionistas”, and “Fairweathers”. “Round the Blockers” ride strictly for fun and spend a

medium to low amount of money on bikes (Wiese, 2010). “Fashionistas” see bikes as just

another accessory and love the romance behind riding a bike (Wiese, 2010). “Fairweathers” see

bikes as the wisest mode of transportation and enjoy mountain bikes as they can go anywhere

with them (Wiese, 2010). However, they feel intimidated by the hardcore riders as they don’t

feel they know enough about bikes to be riding one regularly (Wiese, 2010)

Objective of CRM strategy:

My CRM strategy aims to target male Cross Country “Sporto” riders between the ages of 35-49

with an average income of $80,000+ and ultimately, their children too. My research shows that

this is a profitable, fast growing, promising market segment that ride frequently, are passionate

about mountain biking, and demand the best mountain bikes to help them push their riding to the

limit. It aims to help Yeti NZ to develop an enhanced understanding of these customers’ needs

and wants, and to develop and maintain a strong relationship with them, ultimately maximizing

value for these customer and Yeti NZ. This includes current customers and potential new

customers who fall into this segment. It also aims to acquire additional customers in this

segment, and to retain new and existing customers, increasing market share for Yeti NZ. My

strategy makes use of marketing strategies which will be supported by technology.

My CRM strategy:

My CRM strategy will enable Yeti NZ to gain superior insight and understanding of the

“Sportos” who are into Cross Country riding through a draw and online survey which they will

be encouraged to take part in when Yeti NZ tours around NZ next year. I recommend that Yeti

NZ organizes unique Cross Country trial events where Cross Country “Sportos” can come and

have an afternoon out together to trial Yeti bikes. At the event, a draw to win something would

be announced and the “Sportos” would be informed that this draw can be entered by filling out

an online entry form. The form would ask questions which would allow Yeti to gain insight into

potential new customers in this market segment such as; their contact details, their favorite

mountain bike brand, which bike brand they currently use, why they are/are not interested in

purchasing a Yeti bike, and their opinion on the bike they tried. All of this information would be

stored in a database as part of Yeti’s CRM system. This would allow Yeti to spot promising

leads for sales and tribe leaders and followers, and to target their marketing appropriately. It is

Page 5 of 8

also important for Yeti to monitor and gather insight about their current FaceBook tribe fans in

order to discover which fans are involved in the current Cross Country riding trend. I propose for

this to be done through the use of a Facebook application which simply asks what their current

preferred riding is by providing them a list of options. The information from this app would send

information to a Facebook linker in Yeti’s CRM system. Facebook Linkers can gather

information about the people who chose Cross country as their favorite riding style such as what

they are saying about Yeti products, their profile information, and what their friends are saying

through keyword and sentence search. This information would allow Yeti to identify and target

the Cross Country “Sportos” market segment and to efficiently target their marketing activities

towards them. This information would also help Yeti to find potential tribe leaders around NZ

and to help tribe leaders find new followers. Cross Country “Sportos” want to feel as though they

are part of group as this gives them a sense of identity. Growing and developing the Yeti tribe

around NZ is the key to acquiring new Cross Country “Sportos” customers and retaining existing

ones. A combination of information manipulated efficiently through the use of a CRM system

would significantly increase Yeti NZ’s chance at achieving this.

As a further effort to better understand this segments needs and wants, and as an effort to

develop and retain strong relationships with these customers, I propose Yeti starts up a Blog on

their website with a link to this blog on their Facebook page and in their newsletters. This blog

would be specifically targeted at potential and existing Cross Country “Sporto” customers,

allowing them to discuss queries, ideas and what they would like from Yeti. The information

from customers in the Blog would be linked up to and stored in the Yeti CRM system. This

information could be manipulated by the CRM system in order to find common ideas, wants and

queries allowing Yeti to react accordingly and to cater to the needs and wants of Cross Country

“Sportos” efficiently. The blog would provide a new, modern way for this market segment to

communicate with Yeti 24 hours a day by discussing Yeti related issues and general Cross

Country mountain biking information as a group, creating a further sense of tribalism. This

would maximize value for Yeti NZ due to the valuable information which would be gathered

whilst also maximizing value for customers by providing an efficient, enjoyable, and interactive

way to communicate with Yeti.

Lastly, keeping track of sales, repair, and maintenance details is crucial in order to retain these

customers and to maintain strong lifelong relationships with them. All purchase details such as

customers contact details, date of purchase, and what bike they purchased should be recorded.

Other information about the sales process such as key features customers wanted, the type of

riding they do, what they talked about during the sale, and how often they usually purchase a

new bike should also be recorded. This information could be stored in Yeti’s CRM system and

be used to conduct regular customer follow ups, engage in conversation with them, and send

specifically targeted marketing material to advertise new bikes and biking gear which customers

will be interested in to encourage repeat purchases. Undertaking this will enable Yeti to show

their customers that they care and are knowledgeable about their specific needs and wants. This

Page 6 of 8

will enable them to talk and market to individual customers in a unique way, rather than sending

out bulk promotional material. I recommend that repair and bike maintenance partners should

have their databases linked together with the Yeti database to allow them to automatically share

information regarding faults with customers’ mountain bikes, maintenance and repair

information, and customer satisfaction about the repair process. Customers would be asked to go

online and rate their satisfaction. This would provide Yeti with up-to-date details about

frequently occurring faults, maintenance which has been done, and how satisfied customers were

with the repair process. Cross Country “Sporto” customers like to push their mountain biking to

the limit, and thus need reliable service agents they can trust. This information would give Yeti

more control about the quality of the work provided at their service agents and allow them to

conduct customer follow ups to ensure that their customers are satisfied with the repair and/or

maintenance process. This is crucial as unsatisfactory after sales service can have a detrimental

effect on Yeti’s image and discourage future repeat purchases. One of Yeti’s core competencies

is that they provide a high quality of service at their authorized repairers throughout NZ. Yeti

must have superior control over this to ensure that this is the case 100% of the time.

CRM software requirements:

A database to store customer data, data from the draw survey, blog data, FaceBook data,

sales data, and repair and maintenance data.

FaceBook linker functions such as that of ‘Faceforce Connector’. This would need to

include the following features:

Software which allows Yeti to easily create FaceBook apps through a drag and

drop style user interface.

Dynamic collection of information from people who use the apps when they agree

to the privacy terms and conditions including their personal details, relevant

conversations, relevant FaceBook activities and similar details of their friends on

FaceBook.

An API connection between FaceBook and the CRM software to efficiently

transfer relevant data from the FaceBook page to the CRM database.

The ability to filter this information on the CRM software by key words, phrases,

topics, and type of customer (e.g. their preferred riding style and their age).

Software which allows Yeti to easily produce and manage an online Blog style mail

system.

An API which links the information from the Blog to the CRM software.

Page 7 of 8

An interface which allows Yeti staff to view and reply to queries from the blog and

search for and sort conversation data in a similar fashion to the FaceBook information.

The ability to integrate the Yeti customer database with the authorized Yeti repairers via

an internet connection so that they may look up a customer’s information (or add a new

customer if they are not in the database) and enter repair process information (such as in a

Crossware CRM system).

The ability to transfer the information from a web page where customers go to rate their

service experience to the CRM database.

An SFA customer follow up e-mail system which allows for automated follow up

containing functions similar to ‘Follow-up CRM’. This would need to provide the ability

to schedule automated e-mails such as an e-mail to say thank you for a purchase a few

days after a customer has purchased a new bike, and a follow up e-mail six months after a

sale to check how everything is going etc…

An e-mail system similar to what Yeti already has to send targeted marketing material to

specific customers based on the information in the database. For example, every customer

who has owned their bike for over two years and prefer Cross Country riding could be

sent a promotional e-mail advertising the newest Cross Country mountain bikes.

Features such as that of Microsoft Dynamics CRM to allow the creation of meaningful

reports from the CRM data.

Page 8 of 8

References: - BikeNZ. (2008). The facts: cycling in new zealand. Retrieved from: www.ridestrong.org.nz/RS/blogs/about_ridestrong/pages/the-facts-cycling-in- new-zealand.aspx - Cannondale. (2012). Cannondale mountain bike segmentation [Web]. Retrieved from: http://wn.com/Cannondale_Mountain_Bike_Segmentation - iStart Limited. (2011). Crm ride on for avanti. Retrieved from: www.istart.co.nz/index/HM20/PC0/PV21895/EX23531/CS26025 - Yeti NZ. (2012). About Yeti New Zealand. Retrieved from: www.yeti.co.nz/about - Santa Cruz. (2012). Santa cruz bicycles. Retrieved from: www.santacruzmtb.com/company/index.php?about=1 - Santa Cruz. (2012). Demo schedule tour. Retrieved from: www.santacruzmtb.com/company/index.php?demo=1 - SCOTT Sports SA. (2012). History - scott sports. Retrieved from: www.scott-sports.com/global/en/company/history/ - Sheppard Industries Ltd. (2010). About our store. Retrieved from: www.avantiplus.co.nz/hastings - Spot on publications ltd. (2010). 2010NZMTBR reader survey. - Wiese, A. (2010, April 01). Bike segmentation study. Retrieved from: http://www.slideshare.net/amwiese/complete-bike-segmentation- study?src=related_normal&rel=843261

2499 words (excluding title page, headers, table of contents, and referencing).