Automakers' Digital Imperative


From telematics to autonomous vehicles, there’s no shortage of technological innovation driving the car of the future. The sales and marketing of that car, however, have not quite kept pace.

And it’s to the peril of automakers.

“[OEMs] that engage prospective buyers across a range of channels can rejuvenate their sales and marketing and convert digitally minded consumers into loyal longtime customers,” as was articulated in a report from Strategy&.

Indeed, wholly utilizing digital channels — channels that are, by all accounts, integral components of nearly every other industry — is more than a best practice. It’s an audience demand.

WHY DIGITIZATION?

This digital imperative can in part be attributed to the fact that the new generation of car buyers was raised on technology. They avoid passive consumption of media, instead preferring interactivity. And they are accustomed to being in control of their brand experiences. Digital platforms allow for just that.

Best-in-class clients across industries have engaged The XD Agency to tap into the power of digitization, with recent successes including an online training program for Samsung. The two-week program included custom interactive video content, pop quizzes, and a national online leaderboard that drew raves from engaged participants. By monitoring and analyzing training results in real-time, we were able to assess which messages were being received and retained and optimize accordingly, both in the online platform and with a real-world complement. The result of this digital training: unprecedented knowledge retention, brand engagement, and product recommendation rates among the program’s nearly 50,000 trainees.

SMART AUTOMAKERS WILL SIMILARLY TAKE HEED OF THESE INCREASINGLY TECH-FOCUSED CUSTOMERS, INVESTING IN THE TOOLS AND TECHNIQUES NEEDED TO HAVE TWO-WAY CONVERSATIONS WITH THEM, BUILD RELATIONSHIPS WITH THEM, AND OFFER THEM THE FLUID OMNICHANNEL EXPERIENCE THEY REQUIRE.

WHO’S DOING WHAT?

Strategy& reports that 80 percent of dealers say they drive their own digital sales and marketing, with a measly 13 percent saying they feel “rather well equipped” to compete online.

And that is, to say the least, a missed opportunity. Dealers who are going at it solo will have varying degrees of success, but across the board, they will be unable to capitalize on the power of big data, they will leave the automaker unable to fully protect its brand, and they will miss out on economies of scale.

 To that end, it is our belief that OEMs must deliver world-class digitization in order to be world-class brands. The Tier II and Tier III level will of course continue to have an important sales role, but it’s Tier I that must take the onus upon itself to create customer-centric digital engagement, from brand awareness through after-sales.

According to Accenture research, an OEM with $55 billion in annual net revenue could unlock more than $2.3 billion in new value by 2020 with digitization. “If they fail to digitize,” Accenture warns, “OEMs could lose up to 15 percent of current profitability, and significantly more than that in missed future opportunities.”

HOW DOES IT WORK?

By parsing consumer data— think demographic shifts, social media behaviors — and pairing that with knowledge of the competitive landscape, product lifecycles, and sales drivers, The XD Agency is positioned to help OEMs distill essential insights regarding individual consumer segments. Those insights can inform improvements in how buyers buy and sellers sell.

On a macro level, that translates into using patterns in online activity to distill predictive buying behaviors, so the right message can be delivered to the right audience at the right time in the buying cycle.

On a more granular level, it means telling the stories individual audiences want.

BECAUSE WHILE THE AUTOMOTIVE INDUSTRY’S EVOLUTION HAS BEEN PRODUCT-FOCUSED, AUDIENCES HAVE INCREASINGLY DEMONSTRATED A PROPENSITY FOR EXPERIENCES THAT PUT THEM AT THE CENTER.

Automotive brands and others should take note. We certainly do.

The XD Agency has, for example, created a hyper-targeted Adult Swimbrand experience that generated north of 50 million social impressions from a niche audience. And in an award-winning partnership with Cisco, we used immersive technology to tell the human-centric story of the Network Intuitive. Those are just two of many cases where real-world experiences leveraged the power of digitization to put audiences first and maximize impact.

And while the analytics involved in digitization can at first glance appear dehumanizing, we believe they are actually what enable this kind of hyper-personalized experience. They allow for the kind of audience segmentation that ensures OEMs are telling a story of safety to someone whose online footprint suggests he’s shopping for a car for his teenager, one of value to someone who has been actively comparing prices. They allow racing enthusiasts to be fed adrenaline-fueled videos, while design-minded consumers get to watch something cinematic in style.

THEY ALLOW FOR THE CONTENT TO BE NOT ONLY CREATIVE AND BEAUTIFUL, BUT SMART AND TARGETED, TOO.

“Customers are interested in content, irrespective of which particular channel they use, and it is against our ability to provide this that we will be measured,” Mercedes-Benz VP of Marketing Jens Thiemer told Marketing Week. “The guiding principle for us is therefore: content marketing becomes paramount and will beat advertising.”

So too does content marketing allow OEMs to bridge the gap, while dealers work to catch up their infrastructure and human resources to meet the needs of an evolving customer segment and product line-up. As with the aforementioned Samsung training program, automakers can use digital tools to train the Tier II and Tier III level, helping them to better sell the increasingly important hybrid and electric vehicles and better understand and cater to the preferences of the consumers who buy them.

Of course, digitization is for more than just training. OEMs can use digital content marketing across multiple channels to speak directly to this evolving consumer base. A study that Google commissioned from Millward Brown Digital indicated that 70 percent of people who used YouTube as part of their car buying process were influenced by what they watched. And as views of YouTube test drives and walk-throughs continue to increase exponentially, automakers would be wise to shape the narrative and encourage its reach.

It’s with this in mind The XD Agency has made a name for itself in content development. From channel strategy, creative direction, scripting, and storyboarding to sound design, post-production, and real-time analytics, The XD Agency develops content that is customized based on platform best practices, the competitive landscape, and audience segmentation.

This content anticipates the preconceptions and motivating factors of each audience segment, influencing their perceptions, affecting their emotions, and in turn, aligning them with the brand and business objectives of clients including Mercedes-Benz, Porsche, and Kia, and outside the automotive vertical, Coca-Cola, Reebok, and Microsoft.

And we’re diligent about measuring the results in real time, so we can continually improve benchmarking and segmentation, optimize content and strategy, and maximize results. According to EY, consumers spend more time conducting online research for a purchase of a car — 10 hours on average — than they do for the purchase of any other product. With a holistic and targeted digital presence, complete with a sound content and channel strategy and best-in-class creative, OEMs can ensure that those 10 hours pack a punch.

BUT WHAT ABOUT ACTUAL SALES?

By integrating appropriate CRM tools to track the customer journeys, measure the results, and adapt as needed, OEMs can assess which elements of the digital mix are most consistently compelling audiences to take the next step toward purchase, and they can optimize accordingly

As part of this effort, OEMs need to provide relevant audience information to the dealers, so they know what the individual consumers want when they come into the dealership and so they can follow up — with appropriate messages, at appropriate intervals — if they don’t.

Additionally, automakers have to make it easy to buy. Audiences can get a ride, a meal, a designer gown, or groceries with the click of the button. They can learn about products, consider other consumers’ experiences, and compare prices without ever leaving their home (or their phone). They want, need, and expect buying to be easy.

Similarly, OEMs should give buyers buying options. (Tesla has been an early and celebrated adopter of the technique.) Allow them to pick out their car entirely online, if they so choose. Show them where the nearest dealership is, without them having to ask. Help them take the next step in what should be a seamless, hassle-free, and consistently branded experience.

Indeed, Autotrader reports that 54 percent of consumers would buy from a dealership that offers their preferred experience, even if it didn’t offer the lowest price.

And that’s what agencies like ours are here for. We create end-to-end experiences that meet audiences where they are, giving them the ability to get what they want in the way they want it. Sometimes that involves a face-to-face brand experience and buying a product at a brick-and-mortar store; other times, it involves researching online and completing the path to purchase from the comfort of a smartphone. More often though, it involves a combination of digital engagement and personalized in-person service that respects buyers’ time and preferences and creates a sought-after customer experience.

That’s why The XD Agency works across channels, developing and designing experiences through which consumers will be most apt to receive and retain brand messages and make their purchases. We measure along the way, validating the choices brands make and issuing recommendations for ongoing improvement and effective resource allocation.

It is said that the most successful brands live in conversations, not in advertisements. OEMs that embrace digitization — OEMs that pair audience segmentation and analysis with channel benchmarks and compelling customized stories — are poised to shape these conversations. Conversations that put consumers at the center; that reinforce the brand’s points of differentiation, relevance, and salience; and that make buying easy. Conversations that move the needle.

12 East 49th Street
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12 East 49th Street
11th Floor
New York, New York 10017
United States

January 17, 2018

By Leigh Long