The automotive sector is experiencing a phase of great transformation that marketing will need to adapt to. In this post, we’ll take a look at the 6 main trends looming on the horizon.
We live in a world that changes shape with unprecedented speed. This increasingly accelerated process—one that is impacting our financial and production systems, our social systems, our daily lives—has been triggered by digital transformation. This context—the continuous progress, the continuous race towards the future—is having a huge impact on the automotive sector around the world. This is a huge production sector, one of the symbols of the second industrial revolution (think of Ford, founded in 1903 in the United States, Peugeot in France, or Italy’s Fiat, founded in the late nineteenth century).
Today, we are talking about an industry that has seen the sale of about 78.6 million cars worldwide in 2018 alone (according to the latest available data). We are talking, in short, about an enormous and strategic ecosystem, with a broad industry, which in recent years, is trying to rewrite its dynamics, its processes, its future.
What has changed?
In a word, everything. The production systems, business processes, and technologies underlying this industry have all experienced a great change. The global context has changed: the focus on sustainability issues, for example, is becoming increasingly central. Suffice it to say that, in 2018, there was a 28% increase in purchases of alternative fuel cars compared to the previous year. There is also a great demand for ever smarter and more customizable technology in vehicles. On the horizon, we can see an epoch-making transition: from the car as an asset to the car “as a service.”
In short, public opinion and the expectations of potential customers are changing with it. All marketing operators in the sector must be the first to respond to these challenges. These are complex challenges, but, as always, behind each challenge lies great and unprecedented possibilities.
In this post, we will look at the six main trends impacting marketing in the automotive sector.
6 main trends
1. The decisive importance of B2B
B2B (Business to Business) marketing covers all sectors, but it is very important in the automotive sector. To understand all this, it is enough to reflect, first of all, on the dozens and dozens of components found inside a car. ln most cases, these are components supplied to the manufacturer by other specialized companies, located in different parts of the world.
Then there are the dealers, who sell about 95% of cars to the final consumer (source), with whom companies in the sector must establish profitable and trustworthy relationships. But we can go even further upstream and consider the same business processes: think of the efficiency gained by relying on companies specialized in digitization and dematerialization. Until a few years ago, B2B marketing strategies were rather standardized and rigid. Today this is no longer the case, thanks especially to digital tools and the dynamics of data-driven marketing. We have covered this topic in a previous post.
2. Everything must start from mobile
Smartphones have radically changed the way consumers search and shop. According to a 2016 study by AutoHook (“Auto Dealers and the State of Mobile Marketing“), 51% of people search via smartphone or tablet to choose car models, equipment, read reviews, compare prices, and locate dealers. It’s reasonable to believe that this number has further increased since 2016. Even when the customer is physically located at a point of sale, they will continue to use their smartphones. Here is a significant statistic: 72% of people who use a smartphone in one dealership are more likely to visit another. And, 33% of this sample will actually visit another retailer on the same day or in the following days, based on those online searches.
It’s no wonder, then, that already in 2015, the U.S. automotive sector has invested $3.43 billion dollars in ads on mobile; translated: about 47% of all investments in online marketing (source). If you want additional proof of the importance of mobile in the automotive sector, look no further than this point: Google itself has released a dedicated platform. “Google’s Model Automotive ads provide an immediate and immersive mobile experience for our guests, and the ability to show and tell our story helps highlight the value of the Toyota brand and our vehicles,” said Dionne Colvin-Lovely, Director, Traditional and New Media, Toyota Motor Sales, U.S.A. “Across our core line of car models, we’ve seen a 45% increase in conversion events and a 30% decrease in CPA compared to standard text ads.”
3. The importance of mapping the customer journey
An interesting study by ACA Research tried to precisely map the customer journey of those who are about to buy a car, from the initial research to the final purchase. They found that this “journey” can last from 5 to 12 weeks and that it develops more or less in this way:
- In the initial phase, the consumer uses online searches to create a list of vehicles and brands that interest him/her (usually this happens from 1 to 3 months before the purchase);
- A much narrower selection is then made, arriving at a short-list (on average, 4/7 weeks before purchase), often based on opinions and reviews;
- Next, potential buyers will conduct the test drive (2/4 weeks before the purchase);
- Then, the consumer will arrive at his or her final choice.
In short, it is a long customer journey that involves several channels. A good marketing campaign, then, cannot ignore all of this. It’s about being ready in the right place, at the right time, and, above all, on the right channel. This emphasizes the fundamental importance of data collection and analysis, as well as the role of an omnichannel perspective.
4. Customer service is the first and best marketing strategy
Especially in the automotive sector, Marketing and Customer Service are intimately connected, today more than ever before. It’s no longer just a question of competing on price alone; above all, companies must be able to compete at the level of Customer Experience.
Let’s look at some recent data:
- 54% of customers say they are ready to buy a car from a dealer who offers them the best experience, even if they do not have the lowest prices;
- Coming to dealers: 56% of them would buy more vehicles from the carmaker if the process were quicker and easier;
- In general, it has been calculated that car sales could increase by 25% if the retail experience improves, becoming simpler and smarter.
Finally, according to data provided by Capgemini, only 10% of customers who are dissatisfied with their dealer experience will return to the same place for future purchases. In contrast, 87% of “highly satisfied” customers will buy cars of the same brand; 85% will buy them from the same dealer.
It is understandable why the utmost attention must be paid to this area.
5. From big data to personalization
As we mentioned earlier, the automotive customer journey is complex and diverse. This has two consequences that are opposite but also complementary: on the one hand, it is difficult to trace this path, which goes from the search for inspiration to the purchase; however, with the right analysis tools, you can access a deep level of knowledge about your target customers. All of this is made possible by the most advanced tools for collecting Big Data, the digital traces that we all leave online. You need to know how to look for them in the right places, in an omnichannel perspective, and, above all, you need to know how to interpret them in the most precise and functional way possible.
This allows you to divide your audience into more and more specific segments, succeeding, in the final analysis, in isolating individual characteristics. It is this process, one that is as old as commerce itself and that is now made possible by the most advanced technology, that is called personalization. And there are companies that specialize in this very field, such as Doxee, capable of implementing marketing and customer care operations that address individuals, in an effective one-to-one dialog.
6. The power of personalized video
Personalized videos adapt to the user, even in real-time; they are interactive and built according to the characteristics of the person to whom they are addressed. The effectiveness of this type of communication is practically unrivaled. But it is worth taking this into account: according to research for Google by Millward Brown Digital, about 70% of people view videos on YouTube at the earliest stages of the car purchase process. This is no surprise, as taking our individual experiences into account seems very natural.
Consider that today, you can exploit the medium of video by combining it with personalization. Not through a one-to-many communication (however beautiful and effective), but a one-to-one communication that is tailored to the customer right in front of you. That’s exactly what Doxee Pvideo tools make possible. It’s no coincidence that Forbes defines personalized videos as “the ultimate marketing breakthrough that brands need”.