Ypulse Interview: Steve Cannon, Mercedes-Benz
Posted by meredith on 06-03-2010
With the recent drop in young drivers and growing fears that youth would rather stick with digital pathways than real roads, the pressure is on for marketers in the auto industry looking to connect with young people. This goes for brands that see Gen Y as their primary target today (Ford Fiesta, Scion), as well as those looking ahead a few years down the line.
Case in point is luxury auto brand Mercedes-Benz, which has been actively researching young consumers for two years through their private online community Generation Benz. To learn more, I caught up with Steve Cannon, VP of marketing for Mercedes-Benz, in a quick phone interview on the lessons learned and questions raised from these recent Millennial-targeted initiatives.
Ypulse: What is one of the biggest differences between Millennials’ attitudes towards cars and car buying vs. past generations?
Steve Cannon: One of the first observations we made is that they’re more aligned with their parents than previous generations. Gen Y’ers are used to involved parents, parents that they appreciate, so [parents are] getting involved in making the big decisions in their lives. From the data we’re looking at, you see past generations who wouldn’t get something because their parents had it. “If my Dad is driving this car, I’m going to drive that car.” We’re not seeing that. For Gen Y’ers, certainly of our customers, they have an appreciation for brands, they have an appreciation for luxury brands. There’s a greater alignment than previous generations when it comes to cars and car brands.
YP: What sorts of challenges does this generation raise for automotive brands?
SC: How to keep up with them is challenge number one. And how to reach out to them is challenge number two. Start with the first challenge – keeping up with them – Gen Y’ers are data-obsessed. This [observation] is from multiple, heavy interactions with these guys on our GenBenz portal. These folks do their homework. They’re going to come into a purchase decision and the point-of-sale just loaded with information. We’ve actually done some early mystery shopping with Gen Y’ers and found they were not satisfied with the level of product knowledge that some of our sales guys had on the showroom floor. That’s what I mean when I say “How do we keep up with these guys?” You can’t have an older generation of sales personnel who might not be as deep into the product as they need to be knowing that the folks coming at them aren’t just kicking tires. They’re coming fully loaded, having done their homework, and if you don’t know the product as well as they do, you’ve almost automatically disqualified yourself. We know we have a delivery gap there in how to stay on top of a data-obsessed generation of buyers. So, that’s number one.
How to reach out to them – number two – comes from a lot of them are telling us “we consume media much differently.” They spend much more time online and on social networks than they do interfacing with traditional media. They use their social media networks as a part of the decision-making and fact-finding process. So, “How do we as marketers in an authentic and organic way insert ourselves into the social network?” That’s a problem we’re all grappling with. One of the ways we found works for us, at least when it comes to the Gen Y’ers, is that we’ve allowed them to start sampling our product. We reached out through our GenBenz community, and we’re allowing these guys to test our product. And what we’ve found through doing this is it’s not only building the longer term affinity for the brand, but all of a sudden it’s popping up all over their social networks. We’re giving them a little piece of social capital that they want to project out into their social networks to say they were part of an insider group test-driving a fleet of Mercedes’ cars. That cool factor we found inadvertently is a great little piece of social capital, and it’s a very organic way to insert ourselves into their social networks.
YP: Could you describe the GenBenz online community and the thinking behind it?
SC: GenBenz is a private online community. The reason we made it private is because the value proposition to these folks that participate with us is that we’re giving them advanced information, we’re going to have discussions that aren’t generally open to the public. We wanted to bring them under the tent and have them be part of the process as sort of an informal younger generation advisory group, where they can directly interact with our management team, help drive product decisions, enlighten us with how they consume media. That’s the value proposition.
It’s about 500 strong, 60% are already Mercedes-Benz owners, 40% are a mix of competitive [brand] owners and just non-luxury folks. We get online and we talk with them about brands, about what brands are hot, what do they consume, what they carry in their trunk, what do they shop for, where they go to spend their weekends. what sights they spend their time on. Generally it’s a back and forth communication that we’ve used mostly to get caught up on this younger generation so as they become more of our primary consumer over the next 5-plus years, we’re going to use this time right now to understand them better and to start to understand how they consume media differently so that we’re able to more organically communicate with them when they do become our primary customers. That’s the proposition for this GenBenz community that started two years ago.
YP: What were some of the more unexpected findings you’ve made during that time?
SC: One I already pointed to comes from when they mystery shopped for us. They got in and told us about the experiences they had with Lexus, BMW and with our brand. [We asked] “How well were they treated?” “Were they greeted and did they have an informative sales process?” That mystery shopping was enlightening on two fronts. Number one it identified some gaps that we need to figure out how to cover over the next couple of years. Number two, what I found particularly refreshing, is how willing they were to participate with us when we asked them. We didn’t incentivize them, we didn’t pay them to go out. We said, “We’re looking for a few volunteers.” They took their own time to go out and shop at our store and a competitive store in their area and tell us what they thought. I was amazed at the level of engagement that they were willing to give us just because we asked them.
I also talked about how closely aligned they are with their parents, and it’s an influence path that goes in both directions. They get to influence parents on their choices and vice-versa. For us, as a marketer whose primary consumer is still the Baby Boomer, to think that the Baby Boomer and the Millennial are aligned when it comes to brands in a lot of ways is one of these things that says, “Wow, we don’t need to create a completely different marketing plan to go after the Millennials than we do for the Baby Boomers.” That was a surprising but pleasant learning that we got out of the group.
YP: Any other components to the Mercedes-Benz Gen Y initiative that you’d like to share with Ypulse Readers?
SC: One of the coolest exercises was another data source we got from a Gen Y business school competition with NYU, Harvard, Kellogg and the Stern Schools of Business. We had about 25-30 second year MBA students that we involved in a competition to give us an assessment of the Mercedes-Benz brand, our key competitive brands, how our brand is doing when it comes to reaching you, and what are the problems that you see. The outcome of that competition was pretty enlightening, but the fact that we co-opted a group of very smart Gen Y’ers to participate in helping to solve our business problem was kind of neat.
What impressed me most was when we asked them to come back with some ways, some tactics that they felt would work in connecting with them as a cohort, most of the ideas were not classical marketing. It all revolved around experiencing the product and most had to do with their social networks. The idea they came up with was to create a leader program where we’d recruit highly social networked leaders from the top Business Schools in the country, bring them out for a Mercedes-Benz test drive experience and let them interact with our product and with our executives in a really cool experience, and one that they could package out with videos clips and sound bites and push out into their social networks. When you compare that to classical marketing, it’s clear they just are wired differently. It’s all about their social network. All of the ideas that they had for tactics to reach them were geared around these. It’s amped up our thinking with how we better start experimenting more vigorously with social media because that’s how these folks are wired.
YP: What do you see happening next with these current tech trends and young drivers? How can brands anticipate these changes?
SC: Good luck with that one! We’re still trying to figuring out all of the devices that are coming in now. Right now the iPhone has moved into the iPad and more browsing is coming from mobile devices than it is from stationary devices. The landscape is evolving so quickly. We’re just beginning to wrap our brains around the new medium that the iPhone represents and right on its heels is going to be a whole new set of tablets that could fundamentally change the way people interact with media and interact with brands. Rather than try to anticipate what’s next because that’s all but impossible, it’s about getting in the game on multiple fronts.
I could argue that for my current primary demographic I don’t need to experiment with that at all, I couldn’t demonstrate to you a Return On Investment for that. But given the fact that it’s changing so quickly, if I don’t get involved with some social media experiments — and some are going to probably fail, some might resonate and move the ball down field a little bit — if I don’t experiment with things like Generation Benz, Business School competitions with Gen Y’ers, a lot of things that maybe takes a brand out of its current customer base and its current comfort zone — we’d be left hopelessly behind. Because Gen Y’ers will just continue to embrace these technologies, and not just embrace them, but transform what that means in terms of a relationship between a brand and an individual.
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Categorized under: Youth Marketing