Engineering advances within the automotive industry consistently deliver more technologically advanced vehicles on a yearly cycle. However, OEMs are failing to drive digital transformation from the top down and to actively change how they define a customer-centric approach. Adoption and implementation of technologies surrounding marketing and targeted advertising are prime examples of this hesitation and how the misalignment it creates between the brand and the customer contributes to an environment where legacy car brands are facing threats from new competitors.
While large OEM organisations are having executive-level guided tours in the Silicon Valley, talking about innovation and strategies with LinkedIn, Facebook, and others, the areas of the organisation responsible for making this innovation and executing these strategies are under-resourced, siloed, and not empowered to affect true change. Investments are misguided, decisions are tenuous at best, internal politics prevents growth, and dealerships are left in the dark when it comes to information about the people walking through their doors. Strategy without execution is hallucination!
The current automotive industry is broken, allowing companies like Tesla to redefine what it means to be customer-centric and slowly erode the legacy brands’ market share. As Tesla’s approach proves, the company has the ability to “pretail”—that is, sell a car even before it is produced. Tesla Model 3, for example, has turned the auto-selling concept upside down, with 400.000 preorders even before a single car has been produced. No other OEM can pull this off, even though every one of them would like to. This kind of success requires strong branding, engaging with customers way before they are planning to buy a car, and using digital channels to drive early and continuous engagement.
Here are five ways to save the struggling automotive OEMs.
- Establish strong leadership.
As companies mature and expand, the democratic organisational structure they use to manage their business can create roadblocks for true digital transformation. Changing from being product-driven to customer-centric requires strong leadership to remove organisational roadblocks and deliver confidence for teams to test and try out new digital technologies, and to sometimes fail while figuring out what works and what doesn’t. Having a best-of-breed reputation is no longer sufficient for today’s consumer. Leadership needs to prioritise a holistic approach across the organisation within a single platform if the company is to succeed.
Without a strong leader, political issues within the organisation can easily erode a team’s ability to succeed. For example, in businesses experiencing an organisation-wide shift toward digital, conflicts can arise between the marketing team and IT. As the marketing team looks to integrate enterprise business information into their marketing algorithms, IT will feel responsible for the budgets, use, and maintenance of that software and processes.
Political rifts between departments can sink viable digital marketing transformations, so it is important to identify potential pitfalls within your organisation and act to remove them.
- Empower marketing teams to respond quickly to customer needs.
A digital transformation is not a project, nor is it siloed in one part of the organisation. It is not a fixed-cost implementation with a one-time spend. It is not the digitalisation of the cars. It is a shift in mindset for the entire business, and requires alignment within all areas of the organisation. Without executive buy-in and strong support for the long haul, individual departments may cling to historic ways of doing things, eroding the program’s effectiveness.
A digitally driven organisation does not evolve over long cycles. The change happens quickly as a result of responsive action to the needs of the market. To better understand the underlying currents in their market, businesses need to try new things and be willing to fail. Decisions can’t be held at the executive level, nor distributed in silos; rather, employees need to be trusted to interpret results and make changes to the strategy based on the information they’re receiving, without waiting for C‑level sign-off.
- Invest in tools for creating personalised customer experiences.
Although the advances in automotive technology are without question, OEM investments tend to be engineering- rather than customer-centric. This blinds the organisation to what the market and the customer demand and expect. Having reliable products or a great reputation is not a differentiator anymore; today’s automotive consumer expects the same personalised, customer-focused experience they have when purchasing other goods or services.
Automotive brands need to invest in digital marketing if they are going to stay current in the industry of the future. Commercial websites have already begun to fill the gap, providing more personalised search and discovery services for car buyers. Emerging auto-companies are also filling the gap, redefining the consumer experience and leveraging improved, customer-focused advertising and sales to find market share.
- Provide dealerships with customer data and the knowledge to use it.
Many dealers are unable to deliver the experience that the brand advertises and is often built on. They lack the digital information that the brand captures throughout the purchasing and after-sales phases. OEMs need to take an active lead in the capture, analysis, and communication of customer information to dealers if they are ever to provide a personalised experience on par with an Apple Store.
OEMs also need to provide the necessary infrastructure and training on how to leverage this data, along with incentives for utilising the process and delivering on the brand promise. Dealers do not have the money, expertise, nor the cross-dealer brand view to provide it themselves, and without it, they are left in the dark as to who their customers are, what they want, and why they want it. However, they must be on board as well, as they’re the ones who come face-to-face with the actual customers. This type of knowledge must be driven by a centralised platform that exists at the OEM level and is utilised at the dealer level.
- Stop fearing change to the status quo.
Unlike most industries that rely heavily on marketing and advertising, automotive has been slow to adopt modern digital marketing techniques to personalise, build, and segment audiences, create more relevant and accurate communication, and develop and use more complete profiles of their current and potential customers.
According to a recent Accenture report, The Future of Digital Advertising: Overcoming the Challenges to Higher ROI and Revenues, 41 percent of advertising dollars are spent on television. These ads are untargeted, with little hope of reaching the intended audience. Moreover, there’s no real success measurement or reflection on how they contribute to overall sales.
The report goes on to note that “Ad buyers polled say they believe that the convergence of digital and traditional advertising, and the large amounts of data that are available, will help them target an audience with even more accuracy.” In other words, businesses are beginning to understand the true opportunities afforded by merging their traditional and digital marketing strategies. This trend transcends industries, and is quickly reshaping markets and competitive landscapes.
Automotive OEMs have a long way to go when it comes to real, meaningful digital transformation. Executives need to help drive digital transformations within their organisations and empower their employees to quickly analyze and redirect marketing, sales, and after-sales strategy based on their learnings. OEMs must invest in the capture, analysis, and communication of data and share their insights and customer profiles with their dealers to enable them to truly provide the experience their customers desire. In a sentence, they need to get personal with their customers.