effective automotive marketing

Effective Automotive Marketing

Devon MacDonald

February, 2012

Introduction

• The Automotive Industry – Some basics

• The Savvy Consumer

• Some Examples (good and bad)

• What should be done

Some Basics

OEM and Dealers

• Original Equipment Manufacturers (OEM) do just that, they make the vehicles

• Dealers are licensed agents of the manufacturers that allow them to sell the vehicles at agreed to costs

OEM and Dealers

• Sales Targets are set by the OEM for the Dealer

• Dealers report to regional sales groups while managing their own sales staff

• Dealers receive an agreed to volume of advertising, promotional and administrative support

Generating Revenue

• Dealerships are owned and operated by the dealer principle (the owner)– They are responsible for all costs associated to running the

dealership

• Dealers make little money from selling the actual cars

• Their main source of revenue is from servicing vehicles

Similar Business Models to Automotive

Generating Revenue from Service, not Sales

Movie Theatre

• Revenue from ticket sales goes back to the studios– A small percentage stays with the theatre

• Less in the first couple of weeks, more in the latter

• The theatre makes its revenue from– Concessions– Trailers– Cinema Advertising

Concert Stadium

• Majority of revenue goes to performer and promoter

• The stadium makes its revenue from– Concessions– Parking– In stadium advertising

Electronics Retailer

• Very low margins on electronics• Highly commoditized with active price

comparisons by consumers

• The chain, or store, makes it revenue from– High margin accessories– After market warranties

Apple

• First generation iPhone / iPad were not focused on profit, they were focused on penetration

• The devices are sold at market prices, with more functionality

• Revenue is generated from– Apps– iTunes– Content, content, content

Consumer Behaviour

How do people decide what car to buy?

The Marketing Challenge

• Consumers today use digital to research most purchases, particularly vehicles

• With a long time between purchases it is very difficult to maintain a relationship with the consumer that will influence their future buying decision

Making a Decision

• A typical buyer will take 3 months to purchase a vehicle

– Online Research– Advice from friends– Visiting a dealer

So why then is the majority of ad $ focused

on TV?

Who owns the Customer?

• Manufactures and Dealers are often at odds over a number of issues– Sales Targets vs Sales Support– Model availability– Innovative Features

• Maintaining a relationship with the customer is in the interest of both– But no one does it really well

Some Examples of Consumer Marketing

?

Sent to a Volvo Owner, where is the

personalization?

?

Sent to a VW Owner the week after they bought a

car – very bad

?

Sent to an Auto Show attendee – some good personalization,

but horrible format for a premium brand

Sent to an Auto Show attendee, love the unique

PIN

Sent to an Auto Show attendee, love the unique PIN and personalization

Sent to an Auto Show attendee, love the

personalization

?

The link from the email however goes to a horribly managed Facebook page – I

almost thought it was hacked

Sent to an Auto Show attendee, love the

personalization

?

But the hyperlink doesn’t remember my vehicle of

choice

Owner Portals

• Most manufacturers have developed owner portals to try to maintain connection with owners– Ideally owners are signed up at vehicle

delivery, but with a lot of papers to fill out already sales staff have been reluctant to add more

– Signing up after the fact can be arduous

What should OEMs and Dealers do?

Establish ownership

• Assign ownership of a customer based on proximity to a dealer– But let the customer ultimately decide what

dealer they want to work from• One may be for purchase and one for service

• Understand complimentary consumer behaviour from postal code / zip code

Align Forces

• Coordinate activities between Head Office and Dealer– Messages should be consistent– No overlap– Don’t compete with themselves

• Integrate Service messaging with other communications

Customize and Personalize

• More than name– Communication preference– Vehicle preference– Service history– Vehicle history

• Learn what you can, and incorporate into modeling and messaging

Lead Time before Next Car

1. Don’t bombard the customer

2. Ask when they want to get involved

3. Engage them at the right time (see 1 & 2)

4. Qualify the lead for the Dealer to engage effectively

Create Advocates

• Develop word of mouth amongst your drivers and service customers by providing quality sales and service experiences

• Engage them in their ownership experience– Submit photos– Submit videos– Share purchases– Tell Stories about their vehicle

Thank You

Devon MacDonald

@devonmacdonald

Linkedin.com/devonmacdonald