Establishing the New Automotive Marketing Ecosystem. A 'No More Tiers' Formula?

As digital channels fundamentally change the way customers make purchase decisions, is the traditional three tiered automotive model obsolete? Probably yes.  Will the three tiered model be going away anytime soon?  Probably not.

Why? It might help to go back to the beginning.

In 1898, E. St Elmo Lewis, an American marketer created the concept of the purchase funnel. It is based on the assumption that customers make decisions in a linear fashion through a process of elimination, from awareness to a consideration set to a single preference and purchase. Automotive marketers have used the funnel as the foundation for the conventional 3-tiered automotive marketing model in which manufacturers, dealer associations and individual dealers each have discrete 'buy this, 'buy now' and 'buy here' roles. A tier to tier 'hand-off' occurs as customers move down the funnel. 

And these tiers go hand and hand with a franchised dealer system, in which dealers and manufacturers sometimes see each other as necessary evils. Thus, while originally modeled on customer behavior, the tiers now serve to 'protect' individual interests, ostensibly allowing each entity to do what they do best.

And thus, as more and more automotive marketing activities move to digital channels, they move in tiered silos. But numerous studies have confirmed that customers are no longer behaving in such an orderly fashion; that, from the customers perspective, there are no more tiers. Rather, customers re-considering their 'upper funnel' 'buy this' decision right up until the moment they sign on the dotted line. And there is a strong possibility that the brand they ultimately purchase was not even on their original shopping list.  

And so, we have a system deeply rooted in comfortable conventions, supported by  profoundly entrenched institutions that evidence suggests is out of synch with today's reality. Not only does this create incredible inefficiency, but it also begs asking a fundamental question:  What if we started from scratch?

From there, a cascade of new questions arise.  A few:

• Would we create a collaborate ecosystem void of an 'us' and 'them' mentality?
• Would we be able to fundamentally change the customer experience?
• How would we fund the capital investments required to build a data engine to drive all marketing decisions?
• Who knows the customer best, and who, if anyone should owns the customer relationship?
• How can we optimize the total spend, regardless of source of budget?
• How would our media choices change?
• What role, should dealer associations have?

I don't have all the answers, but the brand who figures it out will define a new customer experience. 

I will be moderating a panel at the JD Power Automotive Marketing Roundtable on this subject next month.  The answers should be interesting.