The automobile industry is entering new territory as the recession wanes and consumers, who have been emotionally scarred by the last 18 months, remain cautious. Many believe that consumers have been forever changed by this recession and that they will be more conservative with their money for years to come.
No one expects that the automotive industry will achieve the heady sales levels of the early part of this decade.
“By 2013, car and truck sales in North America will rebound to the new normal rate of 15 million to 16 million units” Automotive News 8/5/09
At best, we will attain a “new normal” of 15-16MM units in 2013.
That means that competition for customers is going to be tougher than ever and no one’s business is going to grow just hanging on to the industry coattails. Historically the manufacturers have reacted to these types of circumstances by using incentives. These tactics artificially inflated sales earlier in the decade, pulling sales forward and contributed to the most recent “correction” that has pummeled the industry. Using short-term incentives to steal share is not the answer to long-term prosperity, it’s merely a tactic that gives a franchise a quick shot in the arm. Establishing a brand’s immutable points of difference and creating consumer affinity for it, is what creates value over the long term.
Last week, BusinessWeek published a piece by Ed Wallace about GM making the same mistakes; in it he made the case for branding:
“True, people want a “deal” when they buy a new car. But more important, they want to buy something exceptional….The automotive selling process, done right, has little to do with negotiation: It has everything to do with building value in the vehicle.”
It’s about time the industry took “branding” seriously.
You only need to look as far back as the last eighteen months to see the power of an automotive brand. Subaru and Mini have survived the recession and some would argue have flourished under incredibly difficult circumstances while virtually every other manufacturer suffered.
The automobile industry has not made building and nurturing its brands a priority. There are some exceptions like Subaru, Mini, Porsche, BMW, Mercedes Benz and Jeep. But generally speaking investing in the brand has been the first thing cut by automotive marketers when things get tough. The brand investment gets cut in favor of marketing efforts that will “make the doors swing.” Frankly some of the above-mentioned brands have weakened in recent years, but clearly the marketers in charge of them have historically recognized the leverage created by a well-understood brand.
The first step toward having a well-understood brand is being able to clearly articulate it. This is not a tagline or even a series of “core values,” both these approaches seek to summarize a brand. The first step is a complete and full articulation of the brand, several pages perhaps, that explain its history, beliefs, behaviors, accomplishments, failures and contributions. This document seeks not to summarize a brand’s essence but rather to capture it in detail; it describes the brand’s character, what makes it authentic.
The process of writing it down is critical. A consultant friend used to say that: “nothing exists until it is spoken.” In this case, if you can’t write this document about your brand, then you don’t have a brand. Often it can help to have an “outsider” write this document, if you allow that person full access to your company and your people. Either way, you need to articulate your brand in depth and in full, as it should form the underpinnings of all that you do. It should drive communications, your use of social media, dealer experience and everything in between.
With this document in hand, you are ready to leverage your brand and give your customers the experience that will differentiate you from the competition. Without it, you’re grasping at straws, hoping that somehow everything comes together.
In the hyper competitive “new normal” market of 12-16 million units, “guessing and getting lucky” will not carry the day.