Empowering the Automotive Customer Journey Through. How Automotive Manufacturers,

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1 Empowering the Automotive Customer Journey Through Social Business Transformation How Automotive Manufacturers, Dealer Networks and Dealers can Capitalize on Social Media to Drive Value Through Every Stage of the Customer Lifecycle. January 2013

2 Empowering the Automotive Customer Journey Through Social Business Transformation How Automotive Manufacturers, Dealer Networks and Dealers can Capitalize on Social Media to Drive Value Through Every Stage of the Customer Lifecycle. Authored by Max Kalehoff VP Product Marketing Sarah Long VP Strategy & Strategic Alliances Maxine Friedman VP Business Development, Automotive This Syncapse White Paper addresses: The Six Stages of the Automotive Customer Journey Social Media Strategies for Amplifying and Extending Current Marketing Efforts Coordinating Marketing Efforts across Automotive Manufacturers, Dealer Networks and Dealers with Social Media Strategies for Activating Social Business Transformation 2

3 Empowering the Automotive Customer Journey Through Social Business Transformation The automotive purchase cycle is complex. It begins before consumers decide they want to buy a car, and continues long after they ve done so. Today, this happens in a digital, socially-connected world. More than 60 percent of auto buyers already regard the Internet as the most important tool influencing their purchase decisions. 1 With Internet users spending a fifth of their time online using social media, 2 and 75 percent of millennials are on social networking sites, compared with 50 percent of Gen-Xers and 20 percent of Boomers. 3 This is clearly an area that automotive manufacturers cannot afford to neglect. With social media, advertisers can deliver hyper-targeted messaging with variable frequency. For example: Fans can receive the most frequent and highly-targeted messages, Friends of Fans can receive socially-endorsed messaging, and remaining budget can drive sales via spot campaigns to demographic and interest targets on Facebook, Twitter, LinkedIn and elsewhere. 4 Social media marketing is agile, can be implemented quickly, customized for multiple audiences and optimized in real-time based on performance against key performance indicators (KPIs). Never before has this degree of precision been possible across so wide an audience. The opportunity of Audience Relationship Management (ARM) is particularly great for industries like automotive, where customer journeys are long, complex and involve a variety of stakeholders. Six Stages of The Automotive Customer Journey In today s digital, socially-connected world, the automotive customer journey takes place over six major stages, and spans multiple business stakeholders, from auto manufacturers to dealer networks and individual dealers. 1. Dream Car: Before the Journey Begins even before customers decide to buy a car, they consider several brands. These initial-consideration sets are largely driven by long-term brand awareness campaigns, which can be amplified and expanded on social media platforms. 2. triggers: Deciding to Buy a Car Customers decide to buy cars for a variety of reasons, from life events like job promotions and moves, to seeing friends and colleagues buy new cars, to auto-related factors like the expiration of an existing lease. Social media provide automotive manufacturers unprecedented opportunities to track and activate these triggers. 1 Bruce Giffin and Joe Richards, The Role of the Internet in the New and Used Vehicle Purchase Process, [PolkView, February 2011].) 2 comscore Report, It s a Social World: Top 10 Need-to-Knows About Social Networking and Where It s Headed (12/21/11). 3 Pew Research Center, Millennials: A Portrait of Generation Next. 4 Michael Scissons, It s Time to Refresh Your Facebook Marketing Strategy, Advertising Age, October 9,

4 3. options: Expanding the List of Potential Brands After customers decide to buy a car, they often expand their list of potential brands before arriving at a final option often the result of financial considerations and personal recommendations. To reach customers at this stage, social media provide OEMs new opportunities to introduce special deals and social endorsements. 4. Evaluation: Comparing the Options After coming up with a final list of potential brands, customers start the process of evaluating available options for their preferred makes and models. Much of this evaluation happens on third-party websites, but OEMs can drive engagement by providing evaluation tools on their own social media pages and mobile apps. 5. purchase: Deciding Where and When to Buy The final stage of the customer journey is deciding where and when to buy a car. This is where dealerships have the most to gain and where OEMs can do the most to help them engage customers online and drive conversion. 6. loyalty: Long-Term Service Relationships and Brand Advocacy For dealerships, a successful customer interaction doesn t end with a sale. It results in a long-term service relationship. Social media helps dealerships drive these relationships in unprecedented ways, as well as enabling them to use prior sales as new business drivers. Activating Social Business Transformation Social media empower automotive industry stakeholders to better understand their buyers and existing customers, fortify their overall marketing mix, and create deeper and more profitable relationships. Still, auto manufacturers need to step up their use of social media to more effectively manage and improve their messaging, engagement and service with consumers throughout their buying and loyalty journey. Driving success across all stages of organizational and distribution networks requires workflow adaptation, or social business transformation. This happens through three distinct areas: buy-in from the C-suite; tailored technology and services; and ROI measurement. What we have seen so far in the automotive industry s flirtations with social marketing has been great. But social business transformation in the auto industry must be driven by a much broader mandate to build, manage and measure relationships with customers, wherever they are. 4

5 THE SOCIALLY-EMPOWERED AUTOMOTIVE CUSTOMER JOURNEY DREAM CAR TRIGGERS OPTIONS EVALUATION PURCHASE ADVOCACY Amplify brand messaging with online distribution and social validation. Target social media ads against known car-buying triggers. Highlight current promotions and offers, and scale word-of-mouth endorsements, with social ads. Provide evaluation tools and apps on Facebook and other social media platforms. Drive dealer engagement with syndicated, customizable social media apps and advertising campaigns. Drive trust and loyalty and amplify positive experiences among your new customers' social graph. THE SYNCAPSE SOCIAL ENGINE OTIVE MANUFACTURERS 5

6 Dream Car: Before the Journey Begins Lead Business Stakeholders: Auto Manufacturers Even before customers decide to buy a car, they decide on a number of brands that they d seriously consider. These initialconsideration sets are driven to a large extent by long-term brand awareness campaigns, which can be extended and amplified on social media platforms. Dream Car Measuring the impact of brand awareness campaigns is notoriously difficult. But when it comes to the automotive industry, McKinsey & Company has discovered a crucial metric: automotive customers begin their journey with an initial-consideration set of 3.8 brands. They choose these brands for a number of reasons, but long-term awareness campaigns play a crucial role. (Campaigns that focus on special offers and deals are more effective with customers further along in their journeys.) 5 To improve the likelihood of being included in these consideration sets, automotive manufacturers need to expand awareness campaigns across all channels, including social media. Social Media Strategies: Extend Reach with Social Distribution To reach the largest audience possible, OEMs can amplify messaging from traditional channels like television and radio with social media distribution, as Toyota did by releasing their commercial The Force on YouTube weeks before broadcasting it during the 2011 Super Bowl. [ Fig. 1] Amplify Brand Messaging with Social Validation TV, radio, billboard and print advertising lack social validation. On social media, every ad including apps and videos can be commented on, shared or Liked by a customers friends, family and colleagues. This lends them a degree of credibility unavailable in any other medium. Create Multiple, Demo-Specific Campaigns Augmenting traditional offline branding campaigns, OEMs can create and distribute new social ads campaigns in days or weeks, with attractive efficiencies. More importantly, those ads can be targeted to niche demographics, rather than millions of more general TV viewers at once. In an always-on paradigm, the metrics generated by one campaign can be used to refine the message and the targeting of the next iteration. Amplify Customer Aspirations OEMs can tap into social media s unique potential by helping customers broadcast their aspirations on platforms like Facebook and Twitter. Even if a customer isn t ready to buy, their initial-consideration set is a powerful marketing tool if they have ways to communicate it. [ Fig.2 ] 5 David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik, The consumer decision journey, McKinsey Quarterly (June 2009). 6

7 Dream Car: Case Studies and Stats [ Fig. 1] Volkswagen s 2011 Super Bowl commercial The Force featured a young boy dressed as Star Wars Darth Vader attempting to move objects with his powers. AdWeek called it the best television commercial of 2011, but it was more remarkable for its social media success. Volkswagen released the ad on YouTube and other social networks weeks before its TV debut. With more than 50 million views, it broke records and surpassed any other Super Bowl entry to date. [ Fig.2 ] BMW provides Facebook users with Configurator apps for their 1 Series, 3 Series Touring, 7 Series, X1 and X6 lines. Users can customize body color, wheels, upholstery, interior trims and accent lines. Most importantly, they can post the results to their Timeline, broadcasting a portion of their initial-consideration set to their entire social graph. 7

8 Triggers: Deciding to Buy a Car Lead Business Stakeholders: Auto Manufacturers Customers decide to buy cars for a variety of reasons, from life events like promotions and moves, to seeing friends and colleagues buy new cars, to directly auto-related factors like the expiration of an existing lease. Social media gives OEMs unprecedented opportunities to track and target advertising against these triggers. Triggers People decide to buy cars for a variety of different reasons. A study conducted by Road and Travel Magazine in 2005 (without the benefit of social media data) found that the number one reason people bought a new car was, Old car had high mileage. [ Fig. 3] A much more recent LinkedIn study, by contrast, suggested that job-related triggers were the most important, with I received a raise, bonus or other new work-related income topping the list. [ Fig. 4] These results aren t mutually exclusive, and additional factors could be added, including social factors like friends or family buying cars themselves. With the wealth of user data available on social media now available to OEMs, our understanding of these triggers will only deepen. The first step is to collect the data. Social Media Strategies: Collect the Data Until recently, OEMs and dealers were very limited in the potential triggers they could track, as reflected in Road and Travel s emphasis on facts like car mileage and lease expirations. Today, potential triggers ranging from promotions (LinkedIn) to moves and graduations (Facebook) to straightforward announcements that it s Time to buy a new #car! (Twitter) are all potential data points. OEMs should collect this data across platforms, and supplement it with online customer surveys. The results can be used to optimize future campaigns. Target Ads Against Known Triggers Seasonal campaigns target ads against triggers shared by a very broad audience including holidays and year-end bonuses. With social media advertising, OEMs can target ads against far more specific triggers, such as promotions (LinkedIn) or changes in relationship status (Facebook). The results of these campaigns can be used to hone demographic targets and optimize future ad creatives. 8

9 Triggers: Case Studies and Stats Top 14 Reasons People Buy a Car Old car had high mileage Tired of the old car, I wanted something new Old car was always in for repairs Wanted a car with better gas mileage Old car just died Not really sure, other Like the styling of the new models Wanted a vehicle with better safety features Financing deals/incentives too good to pass up Needed another car for the family My significant other wanted a new car Needed a vehicle with more room Wanted a vehicle with new techy toys Lease on old card is up I received a promotion [ Fig.3 ] It s necessary for my line of work Source: Road & Travel Magazine (2005) Changed jobs and need it for my new commute My employment changed in another way Key Factors Triggering LinkedIn Users to Shop for a New Car I received a raise, bonus or other new work-related income I received a promotion It s necessary for my line of work Changed jobs and need it for my new commute My employment changed in another way [ Fig.4] Source: LinkedIn 2011 Automotive Report 9

10 Options: Expanding the List of PotentialBrands Lead Business Stakeholders: Auto Manufacturers After customers decide to buy a car, they expand their list of potential brands before narrowing it down to a final option usually as the Options result of immediate needs, financial considerations or personal recommendations. To reach customers at this stage, social media gives automotive manufacturers new platforms to communicate special deals, and a totally unique platform for driving social endorsements. There is no substitute for being in a potential customer s initial-consideration set. As McKinsey points out, brands in the initial-consideration set can be up to three times more likely to be purchased eventually than brands that aren t in it. However, all is not lost for brands that don t make the first cut. Before moving on to the next phase of their journey, automobile shoppers added 2.2 [potential brands] to their initial set of 3.8. With the exception of well-timed promotions and deals, traditional marketing is much less effective at this stage than it is earlier in the customer journey. The key here is to enable consumer-driven marketing activities, such as Internet reviews and word-of-mouth recommendations from friends and family. 6 Social media platforms are an ideal venue for doing so. Social Media Strategies: Tailor Ads to Customers Immediate Needs If ads are targeted against specific car-buying triggers, campaigns should highlight ways that a brand is appropriate to a customer s immediate situation. Relevant promotions further differentiate an offer. Drive Social Endorsements Nearly all automotive shoppers actively seek out recommendations from friends and family. While in-person interactions are necessarily limited in reach, OEMs should create opportunities for social media users to communicate positive brand mentions to a large audience, as Chevrolet does as part of its Meet the Spark campaign. [ Fig. 5 ] The greater the frequency of these engagements, the more likely brand advocates are to stay engaged and the more likely potential customers are to see a positive interaction at the right moment. And with ad units like Facebook Sponsored Stories, interactions like these can be made even more prominent. 6 David Court, Dave Elzinga, Susan Mulder, and Ole Jørgen Vetvik, The consumer decision journey, McKinsey Quarterly (June 2009). 10

11 Options: Case Studies and Stats [ Fig.5 ] Chevrolet tracks what their 1.6 million fans are saying, and uses that data to find conversations where they can promote their brand. In this interaction, Chevrolet injected a humorous comment that prompted a thankful response and might even have been noticed by a potential Chevy Spark customer. Evaluation: Case Studies and Stats Engagement per Thousand Fans on Automotive Facebook Pages [ Fig. 6 ] Source: SynQ DB Analysis 11

12 Evaluation: Comparing the Options Lead Business Stakeholders: Auto Manufacturers, Dealer Networks, Dealers After coming up with a final list of potential brands, customers start evaluating their options. Much of this evaluation happens on third-party websites, but OEMs can drive engagement by providing evaluation tools on their social media pages and apps. Evaluation On average, automotive shoppers spend between 18 and 19 hours shopping for a car, and 60 percent of that time is online. While a portion of that time is spent engaging dealer-created content including dealer websites and social media pages customers report that they spend the majority of their time on third-party sites like Consumer Reports and Kelly Blue Book. The reason is clear: overwhelmingly, automotive customers go to the Internet in order to research pricing and compare car models 7 [ Fig. 7] exactly the information that these sites provide. If dealers want to drive traffic toward their branded pages, they need to provide customers with ways to evaluate their options. Social Media Strategy: Track Customer Behavior Across Owned and Third-Party Properties Only 15 to 17 percent of brand s engagement with its social media audience takes place on owned properties like Facebook brand pages. It is crucial that OEMs track their behavior outside owned properties to better understand their customers. What third-party sites, blogs or forums are they consulting? What kinds of questions and concerns are trending? By constantly monitoring the Web for answers to these questions, OEMs will be in a much better position to give customers what they re actually looking for. Buick achieved exactly that with their Fuel Efficiency Games, available in mobile and desktop versions, as well as on Facebook. [ Fig. 8] Customers were given information about a key evaluation criterion fuel economy in a format that sites like Consumer Reports don t offer. Scale Word-of-Mouth Recommendations Customers ask friends and family for advice at every stage in their automotive purchase journey, but these recommendations have the greatest impact when customers are narrowing their options to a final choice. Until now, OEMs have had very limited control over word-of-mouth endorsements. Social media ads enable them to broadcast personal recommendations to millions of potential customers. As Facebook COO Sheryl Sandberg told the Wall Street Journal, We enable effective word-of-mouth advertising at scale for the first time. Enable Dealer Engagement Nearly 70 percent of customers engage dealers for the first time when they walk into a dealership. 8 While most individual dealerships don t have the resources to change this fact by developing their own social media content, OEMs can create social media templates and distribute them through dealer networks. Ford took this approach with their 2012 Swap Your Ride Social Media Opportunity campaign, which was completely turnkey for the Dealer. 9 [ Fig.9 ] 7 Bruce Giffin and Joe Richards, The Role of the Internet in the New and Used Vehicle Purchase Process, (PolkView, February 2011). 8 Bruce Giffin and Joe Richards, The Role of the Internet in the New and Used Vehicle Purchase Process (PolkView, February 2011). 9 Amberly Collins, Ford Dealer Drives Sales with Social Media (Automotive Digital Marketing Blog, August 7, 2012). 12

13 Evaluation: Case Studies and Stats Why New and Used Vehicle Shoppers Use the Internet Research pricing of car models and makes Compare car models across different makes Look at exterior / interior photos Locate / find a specific vehicle to purchase Read car reviews Research reliability and safety info Evaluate trade-in value Find info about special offers, dealer rebates & incentives Locate a dealer Request price from a dealer Used Vehicle Buyers New Vehicle Buyers [ Fig.7 ] (Source: Bruce Giffin and Joe Richards, The Role of the Internet in the New and Used Vehicle Purchase Process, [PolkView, February 2011].) 13

14 [ Fig. 8] Buick s Fuel Efficiency Games available in mobile and desktop versions, as well as on Facebook allow users to test drive a Buick and learn how eassist Technology helps drivers save fuel. [ Fig.9 ] Ford creates social media campaigns at the brand level and distributes them through dealer networks. When Elder Ford of Tampa used this particular campaign, they doubled their Facebook fans and drove four new sales in 30 days. 14

15 Purchase: Deciding Where and When to Buy Lead Business Stakeholders: Auto Manufacturers, Dealer Networks, Dealers The final stage of the customer journey is deciding where and when to buy a car. This is where dealerships have the most to gain and where automotive manufacturers can do the most to help them engage customers online. Purchase For most customers, the final stage of the evaluation process is the test drive. This means that customers are beginning to engage dealerships and make their final decision: where they will buy a car. The answer depends on their perception of where the best deals are to be found, and recommendations (or warnings) from friends and colleagues. Social Media Strategies: Promote Foot Traffic While dealerships may not be doing enough to take advantage of social media, OEMs have found increasingly creative ways to drive foot traffic to dealerships. Fiat s Street Evo iphone app, for example, drove an 82% increase in test drives by directing users of their mobile game to the nearest Fiat dealership. 10 [ Fig. 10] Accelerate Approval of Dealer-Created Initiatives A growing frustration among dealers is the length of time it takes for OEMs to approve dealer-initiated marketing initiatives. 11 Social media workflows allow OEMs and dealers to collaborate with far greater efficiency. Given how quickly social media marketing opportunities come and go, an accelerated compliance process is essential. Share Best Practices Among (Non-Competitive) Dealers While dealers clearly have no incentive to communicate best practices with local competitors, OEMs and dealer networks can enable communication among non-competitive dealers, allowing them to learn from and replicate effective social media strategies and campaigns. 10 Fiat: Street Evo iphone App Case Study (DigitalBuzz Blog, May 3, 2011). 11 J.D. Power 2012 Automotive Marketing Roundtable, Dealer Panel. 15

16 Purchase: Case Studies and Stats [ Fig. 10 ] Fiat s Street Evo iphone app allows users to treat street signs as QR Codes, which unlock details about the new Fiat Punt Evo. And the first users to capture a particular sign have the opportunity win prizes, including a new car. Every interaction with the app can lead to a Facebook status update. Most importantly, Street Evo is driving results: Street Evo users captured more than 1 million street signs on week one, and the app s feature directing users to the nearest Fiat dealer via GPS drove an 82% increase in test drives. 16

17 Loyalty: Long-Term Service Relationships and Brand Advocacy Lead Business Stakeholders: Auto Manufacturers, Dealer Networks, Dealers For dealerships, a successful customer interaction doesn t end with a sale. It results in a long-term service relationship. Social media helps dealerships drive these relationships in unprecedented ways, as well as enabling them to use prior sales as new business drivers. Advocacy The major driver of dealer revenues is continuing service relationships, and the major driver of those relationships is Good Prior Experience. In other words: a successful car sale doesn t end by handing customers the keys. It should result in a long-term relationship. The other major factors influencing long-term relationships are trust, loyalty and convenience. [ Fig. 11] With social media, dealers and OEMs have an unprecedented opportunity to improve customer perceptions in all of these areas. Social Media Strategies: Amplify Positive Experiences To date, communicating successful interactions has not been a significant part of dealer marketing. As Dealer-FX.com recently wrote, most dealers do not look at the experience they deliver as something that can be communicated, so they don t try. 12 Social media enables this crucial marketing opportunity, as Toyota USA has demonstrates by consistently responding to brand mentions on Facebook. [ Fig. 12 ] Generate Meaningful Customer Communities to Foster Trust and Loyalty Building direct engagement with customers is crucial, but creating meaningful customer communities allows them to engage with each other. Customer communities are powerful incubators of brand loyalists. And social media makes it simpler than ever for OEMs to incubate customer communities. Activate Your Customers Social Graphs A recent customer is one of the most powerful marketing tools available to automotive manufacturers and dealers, especially because their recent purchase could contribute to another customer s decision to buy. To enable this powerful tool, there is one social media marketing strategy that dealers can implement today, at almost no cost: take a picture of every customer as you hand them their new keys. Post it to your Facebook page; tweet it; encourage customers to share it themselves. It just might trigger that customer s friends to start their own journeys to car ownership. 12 Can social media help you retain service customers? (Dealer-FX, Dec 8, 2011). < 17

18 Loyalty: Case Studies and Stats Why go to a dealership for parts and service? Good Prior Experience Trust the Store / Shop and Its Personnel Other Loyalty to Particular Store / Shop Convenient Location Warranty on the Party Had Other Things I Also Needed to Buy Low Prices Brands of Parts Offered Friend or Family Recommended Fair Prices Own new to 5-year-old vehicle Own vehicle 6 years or older Reasons Given by Less than 1% Large In Stock Inventory Quick and Easy Checkout Way Questions Answered On Phone Would Test My Part for Me Way Questions Answered in person Information on Their Website [ Fig. 11] Source: IMR Inc. ( 2012 Repair Shop Syndicated Research ) Amplifying Social Endorsements [ Fig. 12 ] Without social media, positive word-of-mouth endorsements are limited to a handful of friends. (The current stats bear this out, with less than one percent of customers going to dealers for service at the advice of family and friends.) But by finding and amplifying this online endorsement, Toyota USA spread the word about a Good Prior Experience at a Minneapolis dealership to a much larger audience. 18

19 Activating Social Business Transformation Social media empower automotive industry stakeholders to better understand their buyers and existing customers, fortify their overall marketing mix, and create deeper and more profitable relationships. Driving success across all stages of the organization and distribution networks requires workflow adaptation, or social business transformation. This happens through three distinct areas: buy-in from the C-suite; tailored technology and services; and ROI measurement. Buy-In From The Top. The more interest and sophisticated understanding of social from senior executives, the more the future of consumer interaction and service becomes a C-level and board-level conversation. Conversations evolve from social media is important to we know what we need to do and how to do it to how do we best track and measure progress? Tailored Technology and Services. A cultural change is critical, so that departments, dealers and sales networks are activated and rewarded to initiate and collaborate on a new customer-loyalty cycle. According to dealers and top marketers in the auto industry, this cultural change is in its infancy, and one size will not fit all. However, the right integrations with existing customer-relations management systems, partner networks and brand-tracking systems will contribute to faster growth. Technology and services required for success will need to extend top-to-bottom and across the organization. ROI Measurement. Measuring numbers of fans, followers and likes are not going to cut it in the C-Suite. Instead, social goals must be aligned to business objectives benchmarked and measured against Key Performance Indicators empowering marketing stakeholders across the auto organization to contribute to social success. Social management that can assign, track and standardize metrics will allow the shift in focus toward long-term goals of message effectiveness, forecasting and overall marketing optimization. With the right combination of executive sponsorship, technology implementations and visibility, we re likely to see the automotive industry blazing ahead with social in 2013 and beyond. 19

20 About Syncapse Founded in 2007, Syncapse improves marketing outcomes by increasing the relevancy and scale of messaging through Audience Relationship Management. Syncapse provides auto manufacturers and dealers a holistic collaboration platform for global brand consistency, publishing and controls; standardized measurement and a flexible system for global benchmarking and reporting; and optimized social media and advertising performance. UNIFIED METRICS DEALER DEALER HEAD OFFICE CONTENT REPOSITORY DEALER THE SYNCAPSE AUTOMOTIVE WORKFLOW The Syncapse Platform is secure, SaaS-based technology infrastructure tailored for large global brands and enterprises. The Syncapse Platform gives brands the ability to manage and amplify communications, measure engagement, and analyze paid, earned and owned social media across multiple markets, brands and channels, with a single turnkey solution. Syncapse has a team of passionate social media and advertising professionals, key partnerships with companies like Facebook, Twitter and Google, and global reach to help companies that need to better harness their social marketing and engagement programs. Client partners include the world s top global marketers, including Amway, AB-InBev, The Coca-Cola Company, Diageo, L Oreal, Reckitt Benckiser and more. 20

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