What’s Driving Automotive Marketers Crazy?

By Elizabeth Gooding / Published:

Automotive sales were already under pressure prior to 2020 with the rise of car sharing services and a generational shift away from car ownership. According to eMarketer, vehicle sales and auto parts sales are projected to decline by 0.3% in 2020 which may, in turn, trigger a decline in marketing budgets for auto marketers, but this is not the only thing keeping automotive marketers up at night. There are two key trends that are having a major impact on marketing. First, a growing consumer preference to conduct more of their car shopping online and second, the decline in new vehicle sales is creating a cut-throat atmosphere for securing aftermarket sales revenues.

According to a report from Winterberry Group, “The Drive for Data: The Future of Automotive Marketing in a Customer-Centric World” published in August, COVID-19 social distancing is further accelerating the auto industry’s shift to digital retailing. The auto industry has embraced of e-commerce as a platform for both new car sales and aftermarket parts and service sales. The report further notes that, while automakers and dealers would like to conduct more business online, poor online experiences are undermining the full digital retailing potential.

headshot image of Jonathan Margulies

Jonathan Margulies

I had the opportunity to speak with Johnathan Margulies Managing Partner, Winterberry Group to dig into these issues further. Considering first the car buying experience, Margulies noted that just a handful of digital toolsets are responsible for almost every dealer website in the marketplace today, so when a consumer visits an auto dealer website, the look, feel, experience and flaws are consistent across dealerships. “That will not cut it in a world that is very marketing focused where people want better engagement,” he notes. ”Websites show a specific VIN (Vehicle Identification Number) based on features, that may have absolute truth as the system sees it,  but it may have no relation to what is actually on the dealers lot. There is a big need to fix those basic real time inventory problems.”

The go-to-market effort in auto has traditionally been a sales driven engagement, dealers in brick and mortar dealerships walking consumers through available inventory, through pricing, through distinctions between different models and working with them one on one to close the sale. That traditional personal sales effort is quickly receding in terms of the role it plays in helping moving consumers down the sales funnel to make a purchasing decision.

According to Margulies, “Sales and marketing have always coexisted nicely, but clearly the go-to-market effort was a sales driven interaction and now it has swung, in part from the physical limitations of COVID, but more importantly because digital now represents a centerpiece in how consumers expect to do business and expect to learn about products, make product comparisons, source out information on pricing. What that means is that the role of marketing in auto is only growing more prominent.”

While electronic channels (digital) may be the greatest beneficiary of this renewed focus on marketing, ultimately all marketing channels driven by data, such as variable print, stand to benefit over the long term. This is true both for new car sales as well as aftermarket sales, and the challenge in both cases is the data to drive the process. While car e-tailing sites struggle with inventory data, in the battle for aftermarket sales there is a tug-of-war for customer data.

OEMs see themselves as owning customer relationships to maintain that fluid personalized dialogue but most dealer organizations in the U.S. take a proprietary attitude towards their customer data, particularly since they may sell and service multiple brands. So the dealers have customer data, but don’t often have the tools to orchestrate the messing in an optimal way.

“The imperative facing the dealers is clear: they have to produce significantly improved loyalty communications,” said Margulies. “ It’s no longer good enough to sell a car and sit around for years to wait for the consumer to come purchase another vehicle. They must be proactive about maintaining a relationship and make that person an active customer through that lifecycle.”

Dealers need OEMs, but also from the marketing the supply chains in order to leverage data and to build programs that deliver value. With online channels leading the process in many cases, opportunities for direct mail must consider that the that the window for turnaround for content has grown much shorter. In order to be responsive to an online buying process, triggered direct mail must be fast (delivered in 24 hours), accurate and personal.

Savvier dealerships build better relationships with OEMs, get better online infrastructure and remain dedicated to maintaining differentiation, marketing and experience from other dealerships,” advised Margulies. There is a battle for the aftermarket sales that will not be won with online marketing alone. This an area where direct mail can shine with service reminders, car-care tips and maintaining brand awareness. Data-driven direct mail can be easily integrated with social, mobile and web channels through QR codes or augmented reality to leverage open and retention power of mail with the ease of response and data capture of electronic channels. After-market sales also require transaction communications which should be leveraged to optimize the customer experience and promote loyalty.

Margulies warns, “Competitiveness is going up, disruptor new business approaches like Tesla are increasing, the structural nature of the auto space is changing, along with how they make money. Dealerships make money by the means of service and parts and after sales support, not necessarily on car sales, which requires raising the game for putting out relevant offers and communications for the whole customer life cycle.”

OEMs and dealerships need support from their existing, and likely new, marketing partners in order to respond to demands for more content delivered with controlled budgets. The cost-effective, just-in-time, print-on-demand nature of high speed inkjet provides an opportunity to deliver personalized communications in that maintain consistency and increase the value of other channels. Print and marketing services providers who take a consultative approach to helping automotive marketing professionals manage and leverage their data to drive loyalty should find this fertile ground for their offers.

Winterberry research indicates that “manufacturers and dealers are facing an unprecedented mandate to transform how they manage customer insights—and apply them to a renewed marketing effort.” They need help and our industry can provide it.

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About the Author

Elizabeth Gooding

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Elizabeth is the Editor and Co-founder of Inkjet Insight. She has a rare ability to see print related issues from many perspectives. She has managed creative teams on complex design projects, selected outsourcers for major brands and helped print organizations to retool operations, focus their market positioning and educate sales teams to accelerate growth. She works with a team of top analysts to translate experiences into tools, data and content to help print organizations evaluate the potential of inkjet, optimize their operations and grow pages profitably. She is a founding member of the Inkjet Summit advisory board, the co-author of an award-winning book on designing for inkjet and a curious consultant constantly seeking innovative ways to drive new pages onto inkjet presses.

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