How Automakers are Shifting Gears With Customer-Centric Marketing

October 14, 2014

The JD Power Automotive Marketing Roundtable begins today in Las Vegas. The event brings together more than 1,500 industry professionals to share insights and perspectives on critical marketing issues facing the automotive industry.

One emerging trend is clear in automotive marketing: consumers have laid claim to the driver’s seat and they show no signs of giving back the keys.

This is due to two factors. First, the digital revolution has caused an explosion in the number of marketing channels, allowing consumers to pick and choose where and how they interact with brands. Second, digitally native Millennials (ages 18-30) make up 40 percent of the consumer market, according to PricewaterhouseCoopers.

What this means for automakers, regional dealer groups, and local dealerships is that the traditional strategy of carving up tiers and pumping out channel-centric messaging is dead. But that’s not a bad thing. A shift to a customer-centric model is a necessary adaptation for survival. It’s also the key to understanding the consumer’s journey toward purchase.

What we have to work with

Most industries have embraced large-scale data collection. The auto industry is actually ahead of the curve because it not only collects data from traditional sources, it has also taken advantage of the proliferation of connected consumer devices like smartphones to improve the driving experience and inform the automaker’s marketing. This is a challenge in the short run, and a huge opportunity in the long run.

According to a McKinsey Global Institute Report, the auto industry is projected to be the second largest generator of data by 2015, underscoring the need to press toward a new marketing paradigm where every single customer touch point — whether it’s offline or online, first party or third party — makes it into your database.

What we need to build

Automotive marketers tend to see the customer through the three distinct vantage points of the automaker, the regional dealership groups, and the individual dealer. But the customer doesn’t care or know about these three marketing tiers. A television ad or word-of-mouth may pique their interest and cause them to visit the brand’s website, which may lead them to a dealer’s site. They might deepen their search by visiting a showroom or using a brand’s app, or they might go in another direction and consult a trusted third-party source, zigzagging through tiers and channels during their purchase journey.

Automotive marketers face the same challenges as their colleagues in other industries. But because the automotive marketing spend is split across three distinct groups, the challenge of seeing that single view of the customer is actually three times harder. Valuable data is housed by three different levels of marketing organizations, where technology fragmentation makes it difficult for marketers to connect customer data across tiers and channels.

The stakes are incredibly high because car buyers put a lot of time and energy into purchase decisions that they’ll have to live with for years. The failure to engage the consumer today may cost you a customer forever.

But even after automakers break down their internal silos and unify their data-collection processes, a bigger challenge remains: coordinating among all three groups so that the customer journey is a seamless one as they engage both simultaneously and sequentially with the brand, the dealership group, and the individual dealer. Accomplishing that requires centralizing all this cross-channel and cross-tier information in a data hub where marketers across all tiers can instantly access a comprehensive view of individual customers.

Where we need to go

The goal of automotive marketing—driving sales—hasn’t changed, but it has hit the accelerator. Today, consumers want information now. When interacting with automakers and dealers they expect to see:

  • Personalized interactions
  • Targeted promotions and marketing techniques
  • Investment in social, mobile, and retail channels
  • Acknowledgement that the customer controls the shopping process

The goal of customer-centric automotive marketing is the ability to deliver personalized marketing in any channel at any point in the customer’s journey, and to do so in real time. And once a purchase is made, that same application of data can be used to drive loyalty and revenue by offering a more personalized and integrated service experience from manufacturer and dealer sites. That is what it really means to say that the customer is now driving today’s automotive marketing. The question is: how long will it take your organization to arrive at that destination?

Jonathan Ricard was formerly the Head of North American Sales at Signal.