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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
Effective Automotive Marketing
Effective Automotive Marketing
Effective Automotive Marketing
Effective Automotive Marketing
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

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Effective Automotive Marketing

  • 1. Effective Automotive Marketing Devon MacDonald February, 2012
  • 2. Introduction • The Automotive Industry – Some basics • The Savvy Consumer • Some Examples (good and bad) • What should be done
  • 4. 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
  • 5. 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
  • 6. 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
  • 7. Similar Business Models to Automotive Generating Revenue from Service, not Sales
  • 8. 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
  • 9. Concert Stadium • Majority of revenue goes to performer and promoter • The stadium makes its revenue from – Concessions – Parking – In stadium advertising
  • 10. 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
  • 11. 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
  • 12. Consumer Behaviour How do people decide what car to buy?
  • 13. 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
  • 14. Making a Decision • A typical buyer will take 3 months to purchase a vehicle – Online Research – Advice from friends – Visiting a dealer
  • 15. So why then is the majority of ad $ focused on TV?
  • 16. 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
  • 18. ? Sent to a Volvo Owner, where is the personalization?
  • 19. ? Sent to a VW Owner the week after they bought a car – very bad
  • 20. ? Sent to an Auto Show attendee – some good personalization, but horrible format for a premium brand
  • 21. Sent to an Auto Show attendee, love the unique PIN
  • 22. Sent to an Auto Show attendee, love the unique PIN and personalization
  • 23. Sent to an Auto Show attendee, love the personalization
  • 24. ? The link from the email however goes to a horribly managed Facebook page – I almost thought it was hacked
  • 25. Sent to an Auto Show attendee, love the personalization
  • 26. ? But the hyperlink doesn’t remember my vehicle of choice 
  • 27. 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
  • 32. What should OEMs and Dealers do?
  • 33. 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
  • 34. 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
  • 35. Customize and Personalize • More than name – Communication preference – Vehicle preference – Service history – Vehicle history • Learn what you can, and incorporate into modeling and messaging
  • 36. 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
  • 37. 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
  • 38. Thank You Devon MacDonald @devonmacdonald Linkedin.com/devonmacdonald