How Auto Brands Can Navigate 2020’s New Realities

Customer-loyalty initiatives will pay off long after the pandemic dies down.

Daniel Parmar

June 2, 2020

4 Min Read
business strategy woman writing on board
Holding on to strategies designed at the beginning of the year can hinder success as the industry rebounds.Getty Images

Though the COVID-19 pandemic has made these are unprecedented times, they also offer a rare opportunity for auto brands to emerge as leaders and re-shape the industry.

This starts with having a strong viewpoint on what might happen over the rest of the year. It’s not an easy task in an evolving environment, but one that’s at the start of the strategic-planning process.

We have moved into the apex, where we’re analyzing the shifting impact the virus is having on various U.S. regions.  Time will tell how long this phase will last, and what the macro environment will look like afterward. Brands have put most marketing and promotions on hold, and much of the current focus is on brand engagement through social channels and support during the pandemic.

Given this backdrop, brands should transition from a business-as-usual operating model to a more agile one that enables quicker pivots as the economy re-starts.

Prioritizing innovation in areas such as financing, purchase models, products, and aftersales will help brands re-emerge stronger. To achieve this, brands must focus on these critical activities:

Continue Monitoring

Develop dashboards that aggregate internal and external metrics to take a constant pulse on the situation and on the movement from apex to exit, along with defining triggers to re-start activities.

Internal indicators to watch include sales trends, dealer closures as well as web, app and owned-channel activities to understand changing customer perceptions and purchase intent, survey data and production and inventory levels.

Expected impacts include factors such as prospects shifting consideration to lower-priced models or moving from a new to a used vehicle.

Some macro factors include state-by-state limitations to dealership sales operations, competitive activity, unemployment rates, driving patterns and customer sentiment.

Begin Planning

By utilizing inputs from monitoring, scenario planning should consider multiple timelines for the resumption of economic activity, recovery of production shortfalls, restoration of regional inventory and new customer priorities.

This helps to identify the right set of activities to activate under each scenario. Initiatives aimed at driving customer loyalty will pay off long after the pandemic dies down. Understand the needs of current customers and design solutions to meet them.

Examples of this include at-home services and installation of custom accessories. Innovation should also be at the forefront of strategic planning, as there may be an opportunity to test new services and models (e.g., subscription models), which might increase in popularity among customers who may not want to be tied into multi-year financial obligations with the potential of a COVID-19 resurgence.

Become Agile

In an unusual time, business-as-usual is not the best strategy. Auto brands need to be flexible, to take advantage of region-specific developments and sales opportunities.

Typical summer sales events need to be re-purposed and ready to go, with a mix of pre-approved offers and messaging. Agile processes also need to be adopted for more effective marketing. An MVP mindset ensures a high degree of effectiveness, while guarding against the risk of being irrelevant due to lengthy internal processes. Establish cross-functional teams with streamlined processes and clear ownership

Start Adapting

Established models and strategies may no longer be relevant. Prospects identified to have a high propensity to purchase within an in-market analytical model may have lost their jobs, and a car purchase is no longer high on their list.

Brands must determine what is still relevant, what is not and what needs to be refined. This is an opportunity to develop competitive advantages with new financing and audience models, incorporating real-time customer intelligence.

To connect with customers, new digital experiences need to be quickly developed and tested. As end-to-end online purchases grow in importance, these will be relevant and provide a more integrated experience with dealer touchpoints in the future as well.

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While the pandemic will end, the opportunities that brands have to connect with customers in creative ways, and the competitive advantages that can be established during this time, will impact customer loyalty, industry leadership, and market share far into the future. (Daniel Parmar, left) 

Holding on to playbooks and strategy plans designed at the beginning of the year can hinder success as the industry rebounds. Flexibility, speed, and innovation should underpin both short-term and long-term strategy development.

Daniel Parmar is senior director-customer strategy for Merkle, a technology-focused marketing agency.

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