How To Know Your Market Share

Transcription

1 Equipment Sample Selected UCC Data Customer Analysis Total Customer Analytics 1

2 EXECUTIVE SUMMARY 2

3 UCC data has limited much of the analysis we can do with real data. Based on the UCC data sample, however, the following conclusions can be made. The revenue and customer base have fallen significantly over the years examined. Construction is your biggest industry (54%), especially heavy construction and specialty trade contractors. Landscapers are also important. The customer base is widely dispersed geographically, with some sun belt concentration. Contacts are overwhelmingly senior managers, male, and non- Hispanic. 80% of your customers are in 247 geographic markets and 20 industries. You serve 6.7% of the potential customers in these markets, which is partly a reflection of the UCC data and being in a capital goods business. It also shows that you have significant growth opportunities. All Other Crop Farming is your most penetrated industry at 66%. You have very good penetration in many smaller geographies. You re under-penetrated in Residential Building Construction and the larger geographic markets. 3

4 Excavators are your top item type producing 36% of your revenue. Revenue per unit varies substantially among your item types. The top 20% of your customers produced 65% of your revenue in The main internal differentiator between your top customers and the rest is they ordered more times during the year. Decision tree analysis shows your top customers fall into specific SICs, with a further split of one node by Contact Title. Decile migration shows fairly high customer loss from year-to-year and over the 5-year period. Most of this is probably accounted for by reliance on UCC data, being in a capital goods business, and the economic downturn, but some may be a reflection of customer dissatisfaction. Customers in the top recency decile last purchased 206 days ago on average. The top frequency decile customers average 6 transactions over the past five years (most only have 1 transaction), while the top monetary value customers average $3.1 million. Market Basket Analysis shows four product-pairs that customers purchased together over time that could be cross-sold/upsold. 4

5 OVERVIEW 5

6 Data Sources/Methodology This analysis is based on a sample of United States UCC filings data from 2005 to Complete UCC data would by itself be a sample, as it is only filed when equipment is financed. The only firmographics data available is SIC codes which limits our ability to provide good profiling information. Complete customer data, along with customer interfacing, will substantially increase the value of the analysis. This is only a sample of some of the data you will receive. The full report will have additional analyses for you. 6

7 Millions A total of 106,739 transactions spanning the period from 1/1/2006 through 12/23/2010 are included. Revenue by year is shown below. 2010's revenue changed by -85% from $12,000 Yearly Revenue $10,503 $10,000 $8,906 $8,000 $6,000 $5,804 $4,000 $2,000 $2,312 $1,622 $

8 A total of 58,503 unique customers were active during this time period. Below is a count of active customers by year. Active customers declined by -81% in 2010 compared with ,000 Yearly Active Customers 25,000 25,774 22,854 20,000 15,000 15,335 10,000 5,000 6,503 4,

9 FIRMOGRAPHICS 9

10 Looking at the broad SIC Divisions in the U.S., Construction locations are the largest division, with 58.7% of your customers. Agriculture, Forestry, and Fishing and Manufacturing are the next largest. Services, 2429, 4% Wholesale Trade, 2653, 4% Transportation and Public Utilities, Retail Trade, Finance, Public 2066, 3% 910, 2% Mining, Insurance, Real Administration, 1938, 3% Estate, 340, 1% 2281, 4% Manufacturing, 2888, 5% Agriculture, Forestry, and Fishing, 8624, 15% Construction, 34332, 59% Data is available on 58,461 of your 58,503 customers. 10

11 162-Heavy construction, except highway locations is the largest 3-digit SIC, with 20.6% of your customers. 179-Misc. special trade contractors and 078-Landscape and horticultural services are the next largest. Customers' 3-Digit SIC 162-Heavy construction, except highway 20.6% 179-Misc. special trade contractors 15.8% 078-Landscape and horticultural services 161-Highway and street construction 8.1% 7.3% 019-General Farms, Primarily Crop 177-Concrete work 735-Misc. equipment rental & leasing 919-General government, nec 152-Residential building construction 171-Plumbing, heating, air-conditioning 3.5% 3.1% 3.1% 3.1% 2.9% 2.6% Other 29.8% 0% 5% 10% 15% 20% 25% 30% 35% Data is available on 58,503 of your 58,503 customers. 11

12 CONTACTS 12

13 Title A summation of contact titles shows PRES is the most common with 66% of your customers having it. OWNER and VP follow. The chart below shows your 15 most common contact titles. Top Contact Titles PRES 66.0% OWNER 13.6% VP PRTNR MGR TREAS CHRM 6.7% 4.1% 3.4% 1.2% 0.8% SEC CEO EQMGR CFO SUPV MAYOR SUPT GM 0.6% 0.6% 0.4% 0.3% 0.3% 0.3% 0.3% 0.2% 0% 10% 20% 30% 40% 50% 60% 70% Percent of Customers 12,522 (21%) of your 58,503 customers have title that could be evaluated. 13

14 6% of your customers are Female and 94% are Male. Female, 2130, 6% Male, 36394, 94% Gender could be identified through given names for 38,524 (66%) of your 58,503 customers. 14

15 2% of your customers have Hispanic surnames. Note: many Hispanics don't have Hispanic surnames, so this should be viewed as a minimum. Hispanic, 996, 2% Unknown, 40475, 98% 41,471 (71%) of your 58,503 customers have last names that could be analyzed. 15

16 GEOGRAPHY 16

17 Census Division Of the 9 U.S. Census Divisions, the South Atlantic has the most customers, 21%. The West South Central and Pacific follow. Customers' U.S. Census Divison South Atlantic 20.7% West South Central Pacific 11.9% 13.0% Middle Atlantic East North Central Mountain East South Central West North Central New England 11.4% 10.7% 9.2% 7.8% 7.7% 7.5% 0% 5% 10% 15% 20% 25% Percent of U.S. Customers 17

18 Texas is the state with the most customers, 7.5%. California and Florida follow. The map displays your customer totals by state. State Percent Texas 7.5% California 5.3% Florida 5.2% New York 4.8% Pennsylvania 4.5% North Carolina 4.0% Georgia 3.7% Washington 3.4% Ohio 3.2% Virginia 2.6% Other 55.8% 18

19 MSA 1.6% of your customers are in your largest MSA, Houston-Sugar Land-Baytown, TX. Atlanta-Sandy Springs-Marietta, GA and New York-White Plains-Wayne, NY-NJ follow. 31.1% of your customers are not in a MSA. Customers' U.S. MSA Houston-Sugar Land-Baytown, TX Atlanta-Sandy Springs-Marietta, GA New York-White Plains-Wayne, NY-NJ Pittsburgh, PA Chicago-Joliet-Naperville, IL Seattle-Bellevue-Everett, WA 1.6% 1.5% 1.4% 1.1% 1.0% 1.0% Portland-Vancouver-Hillsboro, OR-WA Philadelphia, PA Washington-Arlington-Alexandria, DC Dallas-Plano-Irving, TX 0.9% 0.8% 0.8% 0.7% Other 58.1% Non-MSA 31.1% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Percent of U.S. Customers 19

20 Houston is the largest city with 0.6% of your customers. San Antonio and Phoenix follow. The three largest cities account for 1.2% of your customers. 7.0% are in the shown Top 50 cities. City State Customers Percent City State Customers Percent Houston Texas % Bakersfield California % San Antonio Texas % Portland Oregon % Phoenix Arizona % Fort Myers Florida % Jacksonville Florida % Richmond Virginia % Orlando Florida % Louisville Kentucky % Miami Florida % Tacoma Washington % Pittsburgh Pennsylvania % Knoxville Tennessee % Dallas Texas % Denver Colorado % Oklahoma City Oklahoma % Snohomish Washington % Fort Worth Texas % Memphis Tennessee % Salt Lake City Utah % Baltimore Maryland % Birmingham Alabama % Albuquerque New Mexico % Tucson Arizona % Chesapeake Virginia % Austin Texas % Colorado Springs Colorado % Charlotte North Carolina % Mobile Alabama % Cincinnati Ohio % Ocala Florida % Anchorage Alaska % Savannah Georgia % Naples Florida % Seattle Washington % Baton Rouge Louisiana % Tulsa Oklahoma % Chicago Illinois % Billings Montana % Tampa Florida % Mesa Arizona % Saint Louis Missouri % Bend Oregon % Las Vegas Nevada % Cleveland Ohio % Raleigh North Carolina % Honolulu Hawaii % Indianapolis Indiana % Olympia Washington % 20

21 Shown below is the distribution of your customers throughout the lower 48 states of the U.S. 21

22 Shown below is the distribution of customers in your largest state, Texas, with 7.5% of your customers. 22

23 Shown below is the distribution of customers in your 2nd largest state, California, with 5.3% of your customers. 23

24 The final map shows the distribution of customers in your 3rd largest state, Florida, with 5.2% of your customers. 24

25 MARKET PENETRATION 25

26 Market penetration measures the percent of potential customers in a market that you have as customers We define a geographic market using MSAs and non- MSA counties in 179 Bureau of Economic Analysis Economic Areas. We analyzed markets where you derive 80% or more of your revenue. The data is available by county. Industries are defined using 5-digit NAICS industry codes for comparability with Bureau of Labor Statistics data. NAICs industries with 80% or more of your customers are analyzed. The final analysis, then, includes your major markets and major industries. 26

27 You have 247 markets that total more than 80% of your customers. In total, 80% of your customers are in these markets. Shown below are your Top 50 markets. Cumulative Percent Market Percent Cumulative Percent Market Percent Houston-Sugar Land-Baytown, TX 1.6% 1.6% Salt Lake City, UT 0.6% 21.9% Atlanta-Sandy Springs-Marietta, GA 1.6% 3.2% Charlotte-Gastonia-Rock Hill, NC-SC 0.6% 22.5% New York-White Plains-Wayne, NY-NJ 1.4% 4.5% Cleveland-Elyria-Mentor, OH 0.6% 23.1% Pittsburgh, PA 1.1% 5.6% Riverside-San Bernardino-Ontario, CA 0.6% 23.7% Chicago-Joliet-Naperville, IL 1.0% 6.7% Seattle-Tacoma-Olympia, WA Non-MSA 0.6% 24.3% Boston-Worcester-Manchester, MA-NH Non-MSA 1.0% 7.7% Lexington-Fayette-Frankfort-Richmond, KY Non-MSA 0.6% 24.9% Seattle-Bellevue-Everett, WA 1.0% 8.7% Birmingham-Hoover, AL 0.6% 25.4% Portland-Vancouver-Hillsboro, OR-WA 0.9% 9.6% Fort Worth-Arlington, TX 0.5% 25.9% Philadelphia, PA 0.8% 10.4% Kansas City, MO-KS 0.5% 26.5% Washington-Arlington-Alexandria, DC 0.8% 11.2% Denver-Aurora-Broomfield, CO 0.5% 27.0% Denver-Aurora-Boulder, CO Non-MSA 0.7% 11.9% Boston-Quincy, MA 0.5% 27.5% Minneapolis-St. Paul-St. Cloud, MN-WI Non-MSA 0.7% 12.6% Richmond, VA 0.5% 28.0% Dallas-Plano-Irving, TX 0.7% 13.3% Cambridge-Newton-Framingham, MA 0.5% 28.5% Newark-Union, NJ-PA 0.7% 14.1% San Antonio-New Braunfels, TX 0.5% 29.0% Nassau-Suffolk, NY 0.7% 14.8% Casper, WY Non-MSA 0.5% 29.5% Phoenix-Mesa-Glendale, AZ 0.7% 15.5% Hartford-West Hartford-East Hartford, CT 0.5% 30.0% Dallas-Fort Worth, TX Non-MSA 0.7% 16.2% Cincinnati-Middletown, OH-KY-IN 0.5% 30.5% Orlando-Kissimmee-Sanford, FL 0.7% 16.9% Los Angeles-Long Beach-Glendale, CA 0.5% 30.9% Atlanta-Sandy Springs-Gainesville, GA-AL Non-MSA 0.7% 17.5% Bridgeport-Stamford-Norwalk, CT 0.5% 31.4% Baltimore-Towson, MD 0.7% 18.2% Providence-New Bedford-Fall River, RI-MA 0.5% 31.8% St. Louis, MO-IL 0.6% 18.8% Asheville-Brevard, NC Non-MSA 0.5% 32.3% Edison-New Brunswick, NJ 0.6% 19.5% Oklahoma City, OK 0.4% 32.7% Tampa-St. Petersburg-Clearwater, FL 0.6% 20.1% Virginia Beach-Norfolk-Newport News, VA-NC 0.4% 33.2% Jackson-Yazoo City, MS Non-MSA 0.6% 20.7% Little Rock-North Little Rock-Pine Bluff, AR Non-M 0.4% 33.6% Minneapolis-St. Paul-Bloomington, MN-WI 0.6% 21.3% New Orleans-Metairie-Kenner, LA 0.4% 34.1% 27

28 You have 20 industries that total more than 80% of your customers. In total, 81% of your customers are in these industries. Shown below are your top industries. Industry Cumulative Percent Percent Site Preparation Contractors 18.7% 18.7% Landscaping Services 8.2% 26.9% Highway, Street, and Bridge Construction 7.8% 34.7% Water and Sewer Line and Related Structures Construction 7.3% 42.0% Other Heavy and Civil Engineering Construction 6.2% 48.2% All Other Crop Farming 3.6% 51.8% Other General Government Support 3.1% 54.9% Power and Communication Line and Related Structures Construction 3.1% 58.0% Residential Building Construction 2.7% 60.7% Commercial and Institutional Building Construction 2.7% 63.3% Plumbing, Heating, and Air-Conditioning Contractors 2.6% 65.9% Poured Concrete Foundation and Structure Contractors 2.5% 68.4% All Other Specialty Trade Contractors 2.4% 70.7% Logging 2.0% 72.7% Construction, Transportation, Mining, and Forestry Machinery and Equipment 1.8% Rental 74.6% and Leasing Construction and Mining (except Oil Well) Machinery and Equipment Merchant 1.6% Wholesalers 76.1% Beef Cattle Ranching and Farming, including Feedlots 1.4% 77.6% Electrical Contractors and Other Wiring Installation Contractors 1.2% 78.8% Support Activities for Mining 1.1% 79.9% Oil and Gas Pipeline and Related Structures Construction 1.0% 80.9% 28

29 NAICS Industry Your overall penetration rate is 6.7%. Your top industry is All Other Crop Farming that has 2214 prospects. You have 1459 customers for a 66% penetration rate. The chart shows your top 15 most penetrated industries Customer Industry Penetration All Other Crop Farming 66% Other Heavy and Civil Engineering Construction 55% Water and Sewer Line and Related Structures Construction Highway, Street, and Bridge Construction Site Preparation Contractors Power and Communication Line and Related Structures 35% 30% 29% 28% Oil and Gas Pipeline and Related Structures Construction Other General Government Support Construction and Mining (except Oil Well) Machinery and Construction, Transportation, Mining, and Forestry 24% 22% 20% 19% Logging Beef Cattle Ranching and Farming, including Feedlots 14% 12% Poured Concrete Foundation and Structure Contractors Landscaping Services Support Activities for Mining 5% 5% 8% 0% 10% 20% 30% 40% 50% 60% 70% Penetration 37,241 of your 58,503 customers can be identified to your primary geographies and industries. 29

30 Market Your top geography is New Orleans-Metairie-Bogalusa, LA Non-MSA that has 431 prospects. You have 112 customers for a 26.0% penetration rate. Gulfport-Biloxi, MS and Knoxville-Sevierville-La Follette, TN Non-MSA follow. The chart shows your top 15 most penetrated geographies Customer Market Penetration New Orleans-Metairie-Bogalusa, LA Non-MSA 26.0% Gulfport-Biloxi, MS Knoxville-Sevierville-La Follette, TN Non-MSA Asheville-Brevard, NC Non-MSA Erie, PA Non-MSA Pittsburgh-New Castle, PA Non-MSA Mobile-Daphne-Fairhope, AL Non-MSA 20.5% 18.7% 17.5% 16.6% 16.4% 15.4% Atlanta-Sandy Springs-Gainesville, GA-AL Non-MSA Asheville, NC Jackson, MS Charleston, WV Beaumont-Port Arthur, TX Seattle-Tacoma-Olympia, WA Non-MSA Boston-Worcester-Manchester, MA-NH Non-MSA Johnson City-Kingsport-Bristol (Tri-Cities), TN-VA 15.4% 15.3% 15.1% 15.1% 15.0% 14.8% 14.7% 14.4% 0.0% 5.0% 10.0% 15.0% 20.0% 25.0% 30.0% Penetration 30

31 Below are your 50 largest markets overall with your customer count and penetration in the selected NAICS codes. Your penetration rate in these markets is 7.3% Market Customers Market Customers Houston-Sugar Land-Baytown, TX % Salt Lake City, UT % Atlanta-Sandy Springs-Marietta, GA % Charlotte-Gastonia-Rock Hill, NC-SC % New York-White Plains-Wayne, NY-NJ % Cleveland-Elyria-Mentor, OH % Pittsburgh, PA % Riverside-San Bernardino-Ontario, CA % Chicago-Joliet-Naperville, IL % Seattle-Tacoma-Olympia, WA Non-MSA % Boston-Worcester-Manchester, MA-NH Non-MSA % Lexington-Fayette-Frankfort-Richmond, KY Non-MSA % Seattle-Bellevue-Everett, WA % Birmingham-Hoover, AL % Portland-Vancouver-Hillsboro, OR-WA % Fort Worth-Arlington, TX % Philadelphia, PA % Kansas City, MO-KS % Washington-Arlington-Alexandria, DC % Denver-Aurora-Broomfield, CO % Denver-Aurora-Boulder, CO Non-MSA % Boston-Quincy, MA % Minneapolis-St. Paul-St. Cloud, MN-WI Non-MSA % Richmond, VA % Dallas-Plano-Irving, TX % Cambridge-Newton-Framingham, MA % Newark-Union, NJ-PA % San Antonio-New Braunfels, TX % Nassau-Suffolk, NY % Casper, WY Non-MSA % Phoenix-Mesa-Glendale, AZ % Hartford-West Hartford-East Hartford, CT % Dallas-Fort Worth, TX Non-MSA % Cincinnati-Middletown, OH-KY-IN % Orlando-Kissimmee-Sanford, FL % Los Angeles-Long Beach-Glendale, CA % Atlanta-Sandy Springs-Gainesville, GA-AL Non-MSA % Bridgeport-Stamford-Norwalk, CT % Baltimore-Towson, MD % Providence-New Bedford-Fall River, RI-MA % St. Louis, MO-IL % Asheville-Brevard, NC Non-MSA % Edison-New Brunswick, NJ % Oklahoma City, OK % Tampa-St. Petersburg-Clearwater, FL % Virginia Beach-Norfolk-Newport News, VA-NC % Jackson-Yazoo City, MS Non-MSA % Little Rock-North Little Rock-Pine Bluff, AR Non-M % Minneapolis-St. Paul-Bloomington, MN-WI % New Orleans-Metairie-Kenner, LA % Penetration Rate Penetration Rate 31

32 Turner, GA is your most highly penetrated county. You serve 100% of the targeted customers there. Owsley, KY and Quitman, MS follow. Listed below are your Top 10 most penetrated counties. County Percent Turner, GA 100% Owsley, KY 100% Quitman, MS 75% Magoffin, KY 67% San Juan, CO 60% Pearl River, MS 53% Hamilton, KS 50% Harrison, MO 50% Martin, KY 47% Holmes, MS 45% 32

33 NAICS Industry Looking at the largest industries, the 15 largest industries and your penetration rate are shown below. Your penetration rate is 0.8% in the largest industry, Residential Building Construction. Your penetration rate is 5.0% in the 2nd largest industry, Landscaping Services Customer Industry Penetration Largest Industries Residential Building Construction Landscaping Services Plumbing, Heating, and Air-Conditioning Contractors Electrical Contractors and Other Wiring Installation Commercial and Institutional Building Construction All Other Specialty Trade Contractors 0.8% 5.0% 1.5% 0.9% 3.7% 3.5% Site Preparation Contractors 28.8% Poured Concrete Foundation and Structure Contractors 7.8% Highway, Street, and Bridge Construction 30.2% Support Activities for Mining 4.9% Water and Sewer Line and Related Structures Construction 34.8% Logging 13.8% Other General Government Support 21.6% Other Heavy and Civil Engineering Construction 55.1% Power and Communication Line and Related Structures 28.1% 0.0% 10.0% 20.0% 30.0% 40.0% 50.0% 60.0% Penetration 33

34 Market The chart below shows the 15 largest markets and your penetration rate. Your penetration rate is 3.4% in the largest market, New York-White Plains-Wayne, NY-NJ. Your penetration rate exceeds your average rate of 6.7% in 3 of the 15 largest markets Customer Market Penetration Largest Markets New York-White Plains-Wayne, NY-NJ 3.4% Chicago-Joliet-Naperville, IL 2.6% Atlanta-Sandy Springs-Marietta, GA 7.2% Los Angeles-Long Beach-Glendale, CA 1.8% Nassau-Suffolk, NY 2.8% Houston-Sugar Land-Baytown, TX 8.0% Washington-Arlington-Alexandria, DC 4.3% Phoenix-Mesa-Glendale, AZ 4.2% Philadelphia, PA 4.8% Minneapolis-St. Paul-Bloomington, MN-WI 3.7% Baltimore-Towson, MD 4.5% Seattle-Bellevue-Everett, WA 7.5% Tampa-St. Petersburg-Clearwater, FL St. Louis, MO-IL Denver-Aurora-Broomfield, CO 3.8% 4.3% 4.3% 0.0% 1.0% 2.0% 3.0% 4.0% 5.0% 6.0% 7.0% 8.0% 9.0% Penetration 34

35 PRODUCTS 35

36 Revenue Quantity Based on the Item Description, EXCAVATOR is your largest revenue producing item, generating $10.4B revenue over the five-year period. This is 36% of your total revenue of $29.1B. Shown below are your top 15 of your 38 total revenue producing items that generated 96% of your revenue. $12,000,000,000 Top Item Description -- Revenue and Quantity 40,000 $10,000,000,000 $8,000,000,000 35,000 30,000 25,000 $6,000,000,000 20,000 $4,000,000,000 15,000 10,000 $2,000,000,000 5,000 $0 0 Item Description 36

37 Revenue Based on the Item Description, the OFF ROAD TRUCK has the highest revenue per unit at $832,201. The CONV SCRAPER and ART HAUL UNIT follow at $827,532 and $622,287, respectively. Shown below are your top items. $900,000 $800,000 Top Item Description -- Revenue per Unit $832,201 $827,532 $700,000 $600,000 $622,287 $500,000 $400,000 $300,000 $200,000 $100,000 $287,040 $236,873 $52,171 $219,341 $93,777 $122,772 $207,463 $284,318 $296,348 $212,747 $156,721 $80,156 $0 Item Description 37

38 DECILE ANALYSIS 38

39 Decile analysis identifies the characteristics of your top customers Customers were placed into one of ten deciles for each year based on their revenue. Because of ties, some deciles contain more than 10% of your customers. Data for the most recent year was analyzed in-depth to determine differences between deciles and suggest opportunities for revenue enhancement. Decile migration over the years was examined to see how customers grew and if retention is a problem. 39

40 Current Year Details 40

41 The top 10% of your customers produced 50% of your revenue in The top 21% of your customers produced 65%. Customer Revenue Distribution by Decile Percent of Customers 10% 11% 9% 10% 11% Percent of Total Revenue 50% 15% 9% 7% 7% 0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Decile

42 Decile The average 2010 revenue of your top decile was $1,669,199. Average revenue per customer for your next decile falls to $469,657. For the lowest decile, the average revenue per customer is only $27,000. Average Revenue per Customer by Decile $1,669, $469,657 $317,359 $230,352 $211, $177,592 $91,376 $69,879 $47,945 $27,000 Average Revenue 42

43 Decile Your top decile averages 3.5 transactions per year. This is 2.6 times the 1.3 of your next decile. The last decile averages 1.0 transactions per year. Average Transactions per Customer by Decile Average Transactions 43

44 Decile Customers in your top decile order $574,396 per transaction. This is 45% higher than the next decile's $396,664. Your last decile only orders $26,970 per transaction. Average Revenue per Transaction by Decile $574,396 2 $396, $230,122 $210,174 $275,157 6 $167, $87,089 $69,879 $47,649 $26,970 $0 $100,000 $200,000 $300,000 $400,000 $500,000 $600,000 $700,000 Average Revenue per Transaction 44

45 Decile Customers in your top decile order 1.43 items per transaction. This differs by 27% from the next decile's Your last decile orders 1.00 items per transaction. Average Items per Transaction by Decile Average Items per Transaction 45

46 Best Customers Profile 46

47 Best Customers Profile attempts to differentiate your top 20% customers from others using external data. External data is used because this enables you to look for clones in the market that you can further develop. To make the segments meaningful, the minimum size is 10% of your customer base. The number of split levels is capped at five. The methodology picks the best variables to use. For this analysis, the following variables were used: Industry: 3 Digit SIC Gender: Male/Female Ethnicity: Hispanic/Unknown State MSA Contact Rank Contact Department 47

48 A decision tree shows the external factors to determine your top 20%. The first split is on 3-digit SIC, which is split 4 ways. The top node has 43 SICs with 7% of your customers. 62% of the customers in this cluster are in the top 20%. The next node has 37% of your customers in the 29 SICs and 27% of the customers in this node are in the top 20%. The next node has 16 SICs with 39% of your clusters. Only 17% of the customers are in the top 20%, but this is split again by rank and a node with 4 ranks that are not Other has 10% of the customers with 25% in the top 20%. The final SIC node has 79 SICs with 17% of your customers, and only 2% of these are in the top 20%. 48

49 Migration 49

50 Customers migrated between deciles as shown below for the first two years of data, 2005 to % of customers in decile 1 in 2005 remained in decile 1 in % of decile 1 customers didn't order in % of your total customers didn't order the following year Decile 2005 Decile Lost 1 31% 10% 5% 3% 1% 2% 1% 0% 1% 0% 46% 2 9% 9% 6% 4% 3% 2% 2% 1% 1% 0% 64% 3 5% 6% 5% 4% 3% 2% 1% 1% 1% 0% 72% 4 3% 4% 4% 6% 2% 2% 2% 1% 1% 1% 74% 5 2% 3% 3% 3% 3% 1% 1% 2% 1% 0% 81% 6 1% 2% 2% 2% 2% 4% 2% 1% 1% 1% 82% 7 1% 1% 1% 2% 1% 3% 3% 1% 1% 1% 85% 8 1% 1% 1% 2% 2% 2% 2% 2% 1% 1% 87% 9 0% 0% 1% 1% 0% 1% 2% 1% 2% 1% 90% 10 0% 1% 0% 0% 0% 1% 1% 1% 2% 2% 91% Total 5% 4% 3% 3% 2% 2% 2% 1% 1% 1% 77% Note: Red italics = lower decile migration; Green bold = higher decile migration. 50

51 Shown below is a migration summary for In total, 8% of your customers moved to a higher decile, 7% remained the same, and 8% moved down. 77% did not do business the following year Decile Moved Up Stayed Same Moved Down Lost 1 0% 31% 23% 46% 2 9% 9% 18% 64% 3 11% 5% 11% 72% 4 10% 6% 9% 74% 5 10% 3% 5% 81% 6 9% 4% 6% 82% 7 8% 3% 3% 85% 8 9% 2% 2% 87% 9 6% 2% 1% 90% 10 7% 2% 0% 91% Total 8% 7% 8% 77% 51

52 When weighted by revenue, 48% of customers in decile 1 in 2005 remained in decile 1 in % of decile 1 customers didn't order in 2006, lower than the customer count migration. Customers producing 52% of your revenue didn't order the following year. This equates to $5.4B of lost revenue Decile Revenue Weighted 2005 Decile Lost 1 48% 8% 4% 2% 1% 1% 1% 0% 0% 0% 34% 2 10% 9% 6% 4% 3% 2% 1% 1% 1% 0% 63% 3 6% 6% 5% 4% 3% 2% 1% 1% 1% 0% 72% 4 3% 4% 4% 6% 2% 2% 2% 1% 1% 1% 74% 5 2% 3% 3% 3% 3% 1% 1% 2% 1% 0% 82% 6 1% 2% 2% 2% 2% 4% 2% 2% 1% 1% 82% 7 1% 1% 1% 2% 1% 3% 3% 1% 2% 1% 85% 8 1% 1% 1% 2% 2% 2% 2% 2% 1% 1% 87% 9 0% 1% 1% 1% 0% 1% 2% 1% 2% 1% 90% 10 0% 1% 0% 0% 0% 1% 1% 1% 2% 2% 92% Total 29% 7% 4% 3% 2% 2% 1% 1% 1% 0% 52% Note: Red italics = lower decile migration; Green bold = higher decile migration. 52

53 16,963 customers were added in They generated $4.2B revenue. 931 produced enough revenue to be in decile Decile Number Revenue $1,461,475, ,361 $715,751, ,587 $592,966, ,773 $414,861, ,646 $327,486, ,846 $258,424, ,793 $159,785, ,105 $140,725, ,101 $104,454, ,820 $70,138,960 Total 16,963 $4,246,071,379 53

54 Customers migrated between deciles as shown below for the last two years of data, 2009 to % of customers in decile 1 in 2009 remained in decile 1 in % of decile 1 customers didn't order in % of your total customers didn't order the following year Decile 2009 Decile Lost 1 18% 5% 3% 2% 1% 2% 1% 0% 1% 0% 67% 2 5% 3% 2% 2% 1% 1% 1% 0% 0% 0% 83% 3 3% 2% 3% 2% 1% 2% 1% 0% 1% 0% 84% 4 2% 2% 2% 3% 2% 1% 1% 1% 0% 0% 85% 5 1% 2% 2% 1% 3% 1% 1% 1% 1% 0% 89% 6 1% 1% 1% 1% 1% 2% 2% 2% 1% 1% 87% 7 0% 0% 1% 0% 0% 1% 2% 1% 2% 1% 91% 8 0% 0% 1% 0% 0% 1% 1% 1% 0% 0% 96% 9 0% 0% 0% 0% 0% 0% 1% 1% 2% 0% 94% 10 0% 1% 1% 0% 0% 0% 1% 2% 1% 1% 95% Total 3% 2% 2% 1% 1% 1% 1% 1% 1% 0% 87% Note: Red italics = lower decile migration; Green bold = higher decile migration. 54

55 Your migration summary for 2009 shows that, in total, 5% of your customers moved to a higher decile, 4% remained the same, and 4% moved down. 87% did not do business the following year Decile Moved Up Stayed Same Moved Down Lost 1 0% 18% 15% 67% 2 5% 3% 9% 83% 3 6% 3% 7% 84% 4 6% 3% 5% 85% 5 5% 3% 4% 89% 6 6% 2% 5% 87% 7 3% 2% 3% 91% 8 3% 1% 0% 96% 9 4% 2% 0% 94% 10 4% 1% 0% 95% Total 5% 4% 4% 87% 55

56 When weighted by revenue, 24% of customers in decile 1 in 2009 remained in decile 1 in % of decile 1 customers didn't order in 2010, lower than the customer count migration. Customers producing 72% of your revenue didn't order the following year. This equates to $1.7B of lost revenue Decile Revenue Weighted 2009 Decile Lost 1 24% 7% 4% 2% 1% 2% 1% 0% 1% 0% 59% 2 6% 3% 2% 2% 1% 1% 1% 0% 0% 0% 83% 3 3% 2% 3% 2% 1% 2% 1% 0% 1% 0% 84% 4 2% 2% 2% 3% 1% 1% 1% 1% 0% 0% 85% 5 1% 2% 2% 1% 3% 1% 1% 1% 1% 0% 89% 6 1% 2% 2% 1% 1% 2% 2% 2% 1% 1% 87% 7 0% 0% 1% 0% 0% 1% 3% 1% 1% 1% 91% 8 0% 0% 1% 0% 0% 1% 1% 1% 0% 0% 96% 9 1% 0% 0% 0% 0% 0% 2% 1% 2% 0% 93% 10 0% 0% 0% 0% 0% 0% 1% 2% 1% 1% 95% Total 13% 5% 3% 2% 1% 2% 1% 0% 1% 0% 72% Note: Red italics = lower decile migration; Green bold = higher decile migration. 56

57 3,995 brand new or returning customers were added in They generated $1.1B revenue. 275 produced enough revenue to be in decile Decile Number Revenue $408,067, $197,041, $107,966, $98,908, $101,616, $58,585, $39,369, $27,906, $31,228, $6,455,967 Total 3,995 $1,077,147,503 57

58 Looking at data from the first and last years, 2005 to 2010, customers migrated between deciles as shown below. Only 5% of customers in decile 1 in 2005 remained in decile 1 in % of decile 1 customers didn't order in % of your total 2005 customers didn't order in Decile 2005 Decile Lost 1 5% 3% 1% 1% 0% 1% 1% 0% 0% 0% 87% 2 1% 2% 1% 1% 1% 1% 0% 0% 0% 0% 93% 3 1% 1% 1% 1% 1% 1% 1% 0% 0% 0% 93% 4 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 96% 5 0% 1% 0% 1% 1% 0% 0% 0% 0% 0% 96% 6 0% 0% 0% 0% 0% 0% 1% 1% 0% 0% 96% 7 0% 0% 0% 0% 0% 0% 0% 0% 1% 0% 98% 8 0% 0% 0% 0% 0% 0% 1% 0% 0% 0% 98% 9 0% 0% 0% 0% 0% 0% 0% 0% 1% 0% 98% 10 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 98% Total 1% 1% 1% 0% 0% 0% 0% 0% 0% 0% 95% Note: Red italics = lower decile migration; Green bold = higher decile migration. 58

59 When weighted by revenue, the picture is better. 8% of customers in decile 1 in 2005 remained in decile 1 in % of decile 1 customers didn't order in 2010, lower than the customer count migration. Customers producing 88% of 2005 revenue didn't order in This equates to $9.3B of lost revenue Decile Revenue Weighted 2005 Decile Lost 1 8% 3% 1% 1% 0% 1% 1% 0% 0% 0% 83% 2 1% 2% 1% 1% 1% 1% 0% 0% 0% 0% 92% 3 1% 1% 1% 1% 1% 1% 1% 0% 0% 0% 93% 4 1% 1% 1% 1% 0% 0% 0% 0% 0% 0% 96% 5 0% 1% 0% 1% 1% 0% 0% 0% 0% 0% 96% 6 0% 0% 0% 0% 0% 0% 1% 1% 0% 0% 96% 7 0% 0% 0% 0% 0% 0% 0% 0% 1% 0% 98% 8 0% 0% 0% 0% 0% 0% 1% 0% 0% 0% 98% 9 0% 0% 0% 0% 0% 0% 0% 0% 1% 0% 98% 10 0% 0% 0% 0% 0% 0% 0% 0% 0% 0% 99% Total 5% 2% 1% 1% 1% 1% 1% 0% 0% 0% 88% Note: Red italics = lower decile migration; Green bold = higher decile migration. 59

60 RFM ANALYSIS 60

61 Recency, Frequency, and Monetary Value Analysis Enables You to Target Customers Based on These Attributes for Responsiveness Customers are placed into deciles for each of these variables over the entire time period. A composite score is also computed with equal weighting given to each. This data is appended to your customer master file for future use. 61

62 Number of Customers Recency -- Days Customers in your top recency decile range from 0 days to 419 days from the last transaction in your data. They average 206 days from your last transaction. 7,000 RFM Recency by Decile 0 6, , , ,002 1,000 3,000 2,000 1,000 1,151 1,272 1,388 1,508 1,625 1,200 1,400 1,600 1,748 1, Decile Number of Customers Mean 2,000 62

63 Number of Customers Frequency -- Number of Transactions 3 to 261 is the range of transactions for customers in your top frequency decile. They average 6 transactions. Because of the low number of transactions, you only have 3 deciles. 45,000 RFM Frequency by Decile ,000 35, , ,000 20, , ,000 5, Decile Number of Customers Mean 63

64 Number of Customers Monetary Value $895,935 to $241.6M is revenue range for customers in your top monetary value decile. $3.1M is their average. Customers in decile 2 average $646,831. 7,000 6,000 Max = $241,577,677 RFM Monetary Value by Decile $5,000,000 $4,500,000 $4,000,000 5,000 $3,075,063 $3,500,000 4,000 $3,000,000 $2,500,000 3,000 2,000 1,000 $646,831 $404,875 $253,510 $203,744 $144,815 $92,108 $67,420 $49,950 $38,169 $2,000,000 $1,500,000 $1,000,000 $500, Decile Number of Customers Mean $0 64

65 MARKET BASKET ANALYSIS 65

66 Market Basket Analysis identifies products purchased together for crosssell opportunities Data was analyzed two ways: transaction specific purchases and customer purchases over the time period Data is only included for products that sell at least as much or more than the average product. Products must also be purchased together at least a certain percentage of the time. 66

67 No major product pairs are purchased together in the same transaction. This may be because we used UCC data and only large equipment is included. 67

68 You have 4 product pairs purchased together by the same customer over the five year period where the co-purchase is greater than 0.5%. Your top products (based on sales of the main product) to be sold together are EXCAVATOR and 1 DRUM VIB COMP. They are sold together 94% more often than expected. Shown below are your top cross-sell products. Purchased Together Percent Lift Percent Main Product Co-Product EXCAVATOR 1 DRUM VIB COMP 2.2% 94.1% EXCAVATOR MOTOR GRADER 1.5% 19.3% WHEEL LOADER 1 DRUM VIB COMP 1.4% 61.7% WHEEL LOADER MOTOR GRADER 1.3% 35.7% 68