Research | Roland Berger: Three Spaces for digital transformation in automotive marketing

Roland Berger believes that in the context of the current stagnation of the overall passenger car market and the intensification of competition, the core pain point of automobile marketing is that in the process of sales model change and business digital transformation, the continuous growth of digital marketing investment cannot achieve the same proportion of return growth. Therefore, it is urgent to have a deep insight into the challenges and opportunities in the process of change and transformation in order to break the game.

Although car companies have increased their investment in digital marketing and user operations in the face of competition in the stock market, there is still huge room for improvement from the perspective of efficiency, customer demand, and business upgrading.

Space for efficiency improvement: Increase the concentration of effective leads and accelerate user decision-making links

The main reason for the decline in the quality of sales leads is the vicious circle caused by inaccurate target audiences and traffic competition. Traditional car companies and dealers are prone to fall into the traditional sales concept of traffic as king, and the sales concept has gradually formed a model of focusing on the scale of traffic and ignoring quality, resulting in the inaccuracy of many corporate marketing advertising entities. At the same time, in order to reduce the average cost of delivery, car companies have to increase the scale of a single launch, and a large number of investments in exchange for lower conversion efficiency, forming a vicious circle of effective clue concentration reduction.

The low-frequency and high-price nature of automobiles determines that the chain and cycle of their consumption decisions are longer than those of other consumer goods. According to data released by third-party platforms, the average retention cycle of auto consumers in 2021 is 17.3 days, an increase of 2.1 days over 2020. Longer consumer decision-making links and cycles test the ability of auto brands to continue, refine operations and convert customers, and service negligence and breakpoints in any link may lead to the loss of potential customers.

Behind the longer consumer decision-making chain, the increasing innovation of online and offline marketing channels and scenarios, the increasing number of contact points for auto brands to reach customers, and the increasing number of marketing information received are important reasons that cannot be ignored. For car companies, this not only reduces marketing efficiency, but also makes marketing effects difficult to attribute, and the combination between marketing contacts is more difficult.

Therefore, how to use digital advantages to improve the accuracy of target users and carry out targeted information communication and contact combination based on refined user stratification is the key to improving the efficiency of digital marketing.

Space for demand insight: Optimize the online car buying experience and capture the consumption trends of young people

As the main force of the automobile consumer group gradually tilts towards Gen Y and Gen Z, consumer preferences and needs for cars are constantly changing and upgrading. For example, the Wuling Hongguang Mini EV blockbuster model focuses on the people's scooter, and attracts young customers with daily commuting needs through small models and low cost characteristics, which shows that consumers in the new era are gradually getting rid of the traditional concept of expensive.

Consumption upgrade is not equivalent to the amount of upgrade, the price war can not become a long-term development strategy, and insight into user needs, highlighting product value is the key to the car companies need to focus on the current focus, in the car companies to bring challenges at the same time also brought the opportunity of "corner overtaking". The digital operation provides a convenient channel for car companies to gain timely insight into the needs of users, especially the needs of young consumers who are willing to experience online car purchases.

On the one hand, insights into the existing online car buying experience provide a reference for digital transformation and upgrading. A survey of online car buying behavior shows that at this stage, the core demand of consumers for online channels is concentrated in the two front-end links of "collecting vehicle information" and "price comparison". "Price comparison is difficult" is the most core pain point in the current offline car purchase process of consumers, including "the price is not transparent, do not know how to negotiate with the 4S store", "do not know which 4S store is lower and more secure", and the transparency of online information and the convenience of price comparison are the core appeals of users for online car purchase. Despite this, consumers still encounter many problems in online car viewing, mainly focusing on "information is messy and difficult to select", "quotations and actual prices are different from each other", "preferential treatment is not as good as offline or can not be used" and other issues. In addition, at present, the problems encountered in the specific car purchase process such as "loan", "insurance" and "car pick-up cycle" still need to rely on offline channels to solve. This means that there is still a lot of room for improvement in the online car buying experience.

On the other hand, the user's word-of-mouth data in social and vertical media and the consumption data of all categories of e-commerce platforms also provide a basis for insight into the automobile consumption trends of different ethnic groups. For example, Tmall divides users into 13 lifestyles based on their full category behavior. Among them, new energy vehicle owners prefer travel, scientific and technological lifestyle, etc., which provides an opportunity for new energy vehicles to carry out Fliggy joint marketing.

Space for service upgrade: From the front-end policy to the underlying data, the system establishes the user's full-life cycle operation capability

The opportunity to improve sales efficiency comes from user mind mining and demand insight, which relies on the ability of car companies to operate in the whole life cycle of users. However, the ability to build a systematic user lifecycle operation with the help of digital technology must be comprehensively promoted from front-end policy applications to the underlying data system upgrade. At present, traditional car companies still have a lot of room for improvement in the following four aspects:

Customer portraits: Online populations have rich characteristics and diverse needs, but the industry has not yet formed an effective customer insight methodology, and it is difficult for car companies to effectively use data assets, nor can they deeply understand customer characteristics and actual needs, thereby forming accurate customer portraits.

Demand satisfaction: The core needs of consumers for online channels are concentrated in the two front-end links of "collecting vehicle information" and "price comparison", but at present, the online platform is facing problems such as "information is messy and difficult to select", "quotation is not real and difficult to win trust", "information is not complete and difficult to judge", and consumers' key demands have not yet been met.

Data operation: Traditional OEMs mainly rely on dealers to interact with customers, so dealers have a large amount of user data and real voice, but it is difficult to effectively feed back OEMs to make decisions. In the future, opening up the data link at all stages of the life cycle of car owners and mining the value of car owners is an important issue faced by the marketing side of most traditional OEMs.

System infrastructure: At the same time, the information system architecture is old and decentralized, and the infrastructure construction of various systems needs to be upgraded urgently. Therefore, the opening of data islands, the effective integration of data from all parties, and the effective transmission of various types of information to various departments are all problems that need to be solved urgently in system infrastructure.