How do consumers buy cars today? What should OEM's and Dealers be doing to effectively engage consumers through their purchase decision?

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

3. Some Basics

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

17. Some Examples of
Consumer Marketing

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