The luxury vehicle market is growing rapidly. A recent study predicts that sales of luxury car brands will grow at an annual rate of 35% from 2019-2023. That means luxury car marketers are in a good place to sell a lot of cars, but they need to keep up with the demands of their customers to beat the competition.
Marketing within the auto industry is changing. Automakers used to focus on functionality and status (which still works to an extent), but today’s consumer is more concerned with value for their money and a sense of personal satisfaction for their purchase. Luxe car dealers need to prove their high-end vehicles are worth the extra expense.
Here are eight marketing secrets of luxury car brands that you can apply to your business.
1. Porsche: Segment Your Target Market
Porsche wanted to keep their heritage while at the same time attracting a younger female audience. What was their plan? Segmentation. So the most profitable automotive brand in the world set out to reposition themselves without alienating their core customers.
Porsche was marketing to an upscale target audience, primarily men above 40 years old with an income over $100,000. Their goal, however, was to expand on their already strong brand. They would need more than demographic information to do so, though.
Marketing research company J.D. Power and Associates reports that demographic targeting misses the mark when trying to attract new-vehicle drivers. Marketers need to look at the purchasing behavior across all 25 new-vehicle segments, down to the brand and model, to allow for proper targeting. So that’s exactly what Porsche did.
Their new targeted marketing focused on reducing the average age of the Porsche owner and increasing the number of female owners. So they created a campaign called “Engineered for magic, every day.” The 30-second commercial included a woman sweeping snow off her car with a child in a car seat, and another mother picking up two children from school in a yellow Porsche 911. It was a niche marketing approach designed to change their target position—but only slightly.
Porsche also enlisted the services of tennis star Maria Sharapova to help attract a younger female audience. The result? Female purchasing was up 7% in two years.
The Secret: If you have a loyal customer base, but you know you need to expand your market for continued growth, look at segmentation. You don’t have to alienate your primary customer base. But if you know (from market research beyond mere demographics) there’s a different audience likely interested in your product, you can change your target position to reach that group.
2. Lexus: Use the Power of Partnership to Attract a New Audience
Lexus saw an opportunity to connect with a new audience in a unique way—via the hit Marvel movie “Black Panther.” So they designed a car—the Lexus LC 500—and debuted it as a sort of superhero support system in the film alongside other Lexus vehicles.
Based on information provided by their ad agency, Walton Isaacson, they knew that Black affluence was outgrowing all other market segments. Young Black and Hispanic buyers were going to the movies more than any other consumers—by far. Therefore, any brand trying to take a modern approach to their marketing would need to look at multicultural audiences.
Multicultural appeal wasn’t their only goal, though. Lexus was striving to attract millennials, and having a strong multicultural approach was important.
Lexus had the statistics, but it was still a gamble considering there were no assurances the movie would be successful. In fact, the collaboration began two years before the script was finished. Lexus wasn’t even sure the movie’s message would align with their brand or its vehicles. One thing they knew was Black Panther’s main character, T’Challa, was from the most technologically advanced civilization in the Marvel Universe. And they felt a connection.
Furthermore, at the time of the movie’s famous car chase through the streets of Busan, South Korea, there were no LC 500s on the market. There were only very expensive hand-built prototypes. Lexus had to hand over six of them and be okay with the whole lot potentially getting wrecked beyond recovery.
So they introduced the LC 500 in a 30-second Super Bowl commercial costing $5 million. Considering their history of conservatism in marketing, this entire enterprise was a stretch for Lexus.
The gamble paid off, however. The movie made more than $1 billion within a month, and it has since introduced more than 175-million people to the luxury car brand.
The Secret: If you can partner with an established business—or an event that’s projected to be a huge success—it could provide tremendous dividends for your brand. Try to find a partner that matches your mission or meets specific criteria you feel are important to the success of your marketing. Don’t be afraid to get creative with a business you see as capable of introducing you to a desired target market. Just make sure you’re able to withstand the financial loss if it’s a bust.
3. Rolls-Royce: Focus on Traditional Marketing
Rolls-Royce is one of the most famous luxury car brands in the world. It’s always been big on simplicity and excellence. But there are still only two categories of people that buy a Rolls: Old Money and New Money.
Old Money describes affluent people whose families have maintained their wealth over multiple generations, perhaps inheriting it from one generation to the next. New Money, on the other hand, is someone whose wealth is recently acquired.
Rolls-Royce didn’t feel a need to turn to social media or any other contemporary approach to market their vehicles. Rather, they prefer activities like event marketing, where elite purchasers-to-be can test drive a car and/or meet the designers.
The English car brand began in 1906. Since their inception, they’ve catered almost exclusively to self-employed entrepreneurs or heirs of large fortunes with a net worth around $30 million. The typical Rolls-Royce customer has several homes and more than one luxe car. In fact, they might even collect cars.
So their marketing approach focuses on three primary areas:
- Brand Consistency. Rolls Royce isn’t trying to be anything other than what they’ve been—a reliable, ultra-luxe car for very wealthy people.
- Unique Perks. As a Rolls-Royce owner-to-be, you’d probably attend an event where you can test drive a car and meet the designers. Right?
- Emotions. Use opulence, refinement, and superior craftsmanship to attract customers. After all, that’s what impresses them to buy in the first place.
Their approach is working. The brand just announced their highest annual results in its 115-year history.
The Secret: If you’ve built a loyal following based on specific marketing methods—and your sales are better than ever—there’s no reason to change. In other words, if it isn’t broken, don’t fix it. That’s not an excuse to slack off, though. In fact, you can take what you’ve known to work and make it even better. Maintain your brand consistency. Make your perks even better. And always look for new ways to appeal to your customer’s emotions. The success you’ve known can continue for many more years as long as you never take it for granted.
4. BMW: Adapt and Find New Customers
Young people “want brands that behave like human beings.”
That’s what BMW’s Senior Vice-President of Brand, Hildegard Wortmann, says. So the German multinational company is attempting to create the ultimate driving machine for them—and everyone else, too.
BMW is not forgetting the customers they’ve been able to rely on for decades, but those drivers only have one or two more purchases left in their lifetime.
The brand’s survival depends on a new generation. That’s why the cars have changed and the marketing has taken them to some new places.
The Coachella Valley Music and Arts Festival is one such example. The annual fest attracts “every one,” as the event’s marketers like to say. But it’s an influx of young people, ages 18-26, that flock to the California desert town of Indio to take in the music and mayhem each year.
BMW took their sub-brand, fully electric i vehicle and became an official partner. They adopted a creative hashtag (#roadtocoachella) and unveiled a unique Coachella car design created by Portugal. The Man lead singer John Gourley.
BMW’s Stefan Ponikva, head of BMW Brand Experience Shows & Events, said:
“Like Coachella, inspiration, innovation and the will to constantly reinvent oneself are part of BMW i’s DNA. This makes the festival the ideal partner.”
The whole idea was to raise awareness among a new group of potential customers. Once they paid off their exorbitant student loans, BMW would be on their car-buying radar.
BMW isn’t just attending one festival and calling it quits, though. Quite the contrary. They built a content studio at their headquarters and hired analysts to figure out what’s working within the social realm. Now that’s a strategic way to cater to a new wave of customers.
The Secret: To find new customers, you may have to adapt your products and step outside your previous marketing methods. Adaptation is a big part of surviving as a business. If you want to attract a younger audience, go where they are and become part of their culture. Build the products they want and speak to them on their terms. When you adopt a human approach—complete with a social conscience and the ability to relate—you open your brand to acceptance. Hopefully you’re also building a customer for life.
5. Cadillac: Listen to Your Customers
As it turns out, even an iconic company like Cadillac can be at a disadvantage. When people think of this prestigious General Motors brand, they don’t immediately think of innovation and the future. They think about a classic automobile. They think of days gone by. Cadillac has proven to be a symbol of success within the automotive industry, particularly the luxury sector, but they’re generally perceived as an aging brand. That’s why they committed to changing that perception.
Cadillac has taken a customer-centric approach, putting their purchasers at the center of their business by listening to what they want and need—and then acting upon it. Here’s an outline of their plan.
The idea of luxury has changed somewhat. It used to be about affluence, status, and popularity. Those things still come into play, but modern luxury has a purpose. It resonates with a customer’s lifestyle. The demographics are evolving, too. By 2020, Gen X and Y will make the majority of purchases across all markets. Cadillac’s aim is to understand these consumers and meet their expectations.
Highlight the Customer Experience
Modern luxury also means innovative products. Cadillac needed to alter their reputation as a classic luxury vehicle. So they created the CT6 PLUG-IN, a top-of-range luxury hybrid electric sedan. It’s tagline: Power with a Conscience. Then they added the best possible brand experience. In fact, to improve the purchasing and ownership experience, Cadillac’s president sends a personal letter to each CT6 buyer, expressing his gratitude for their purchase.
Build Upon the Customer Relationship
To improve customer engagement, Cadillac created the Cadillac Collective, an online community of car owners and enthusiasts. They use the forum to set decision-making and strategy, and to understand potential Cadillac customers. It’s an extension of their brand. It helps them make informed product marketing decisions, but they also hope to measure how many participants make a purchase. Valuable information is great. A sale is even better.
Cadillac wants to “outwit” luxury. Rather than comparing themselves solely to other luxury car brands, they want to benchmark themselves against the entire luxury market. Luxury purchases are often driven by emotion rather than logic. To make a real connection with their customers, Cadillac uses Reddit AMAs to connect designers, engineers, and executives to consumers.
The Secret: Listen to your customers. Make products that match their needs and expectations. Then give them the best possible customer experience—before, during, and after a purchase. That includes thanking them for their patronage. The power of a handwritten note has been well documented. In this “age of the customer,” it’s important to establish a personal connection with them. After all, without their business, you’d likely be out of business.
6. Audi: Use Multichannel Marketing
How does Audi maintain their longevity as a luxury brand? They stay on top of the latest trends in marketing, with an emphasis on digital. The German auto manufacturer started more than 90 years ago, yet they remain one of the top 50 brands in the world. This is largely because they’ve always found a way to adapt to the times. Today is no different.
Here are three areas of marketing where Audi is thriving.
Watch Your Competitors
Audi took a tongue-in-cheek approach to their competition with Tesla. They created billboard ads for e-tron, the first purely electric Audi SUV, to rival Tesla’s Model X. The Berlin-based ads read: “Musk-Have.”
Feature Social Issues in Your Advertising
Audi raised awareness about gender inequality with a Super Bowl ad entitled “Daughter.” The one-minute commercial featured a powerful message about equal pay for women.
Focus on Video and Visual Content
Most car brands believe online videos are more effective than traditional advertising. Audi is one of them. Their “Think Faster” series of YouTube videos feature pop-culture celebs doing Reddit AMAs while riding around a race track at high speeds.
They’re also big on Instagram with 13.2-million followers. Audi posts pictures of their cars (obviously), but they also create timely, interactive posts that stay true to their brand.
The Secret: Mix it up. A multichannel approach to marketing can boost your results. More than half of today’s companies use at least eight channels to interact with their customers. That’s not to say the more channels you use the better, but more than one certainly appeals to customers. Over 70% of consumers say they’d rather connect with brands and businesses that use multichannel marketing. So use digital marketing, direct mail marketing, billboard advertising, radio and television commercials, etc.
7. Volvo: Marketing with a Higher Purpose
Volvo Cars believes marketing should reflect what’s happening inside the company. So the Swedish luxury vehicle company set out to organize the Volvo Ocean Race. They used this worldwide sailing adventure to collect data about harmful microplastics in the sea. Rather than merely sponsoring the event, however, Volvo plans to design cars with a higher content of recycled plastics. By 2025, the company envisions 25% of their plastic will be recycled.
Marketing with a higher purpose—aka purpose-based marketing or cause marketing—isn’t new. Volvo looks at it like icing on the cake. The cake is the purpose. The icing is the marketing for it.
Volvo, like many others, is spending more on digital marketing. But they’re also increasing their public relations efforts to let the world know what they’re doing. According to Bjorn Annwall, Volvo’s Senior Vice President of Strategy, Brand, and Retail, there are three important questions regarding any message your brand is sending.
- Is it relevant?
- Is it genuine?
- Are you really making the changes you say you’re making?
Volvo is changing the perception of their brand from one of safety to one that’s considered “all-inclusive premium.” They’re not giving up on safety, of course, but they want to be “a brand for people who care about people.” They were the only car company invited to the esteemed G7 Oceans Partnership Summit. This only contributed to their position as a sustainability leader.
The Secret: If you pursue marketing with a social purpose, make sure you can back up your message. Is it relevant? Is it genuine? What are you doing to make the world better? Are you merely supporting a cause or are you actively involved in finding a solution to a problem? If so, exactly how? Once you have that figured out, let the world know about it via your marketing and PR efforts.
8. Tesla: Innovation is Your Marketing
Tesla is one of the top luxury car manufacturers in the U.S., but they don’t do much in the way of marketing their products.
The California-based automotive and energy company doesn’t need to advertise when they’re taking 1,800 orders per day. In the fall of 2018, they increased deliveries by more than 100%, their best quarter in the company’s history. Collectively, car companies are spending more than $11 billion each year on marketing their automobiles. Tesla is not included in that figure.
If your brand is in a position of great fortune (or just the opposite), you might not need to focus on your marketing tactics. So what do you do? Here are a couple options.
This may sound very old school, but it’s essentially what Tesla is doing. They don’t offer their vehicles to dealerships. But they do set up showrooms in shopping centers and high-traffic areas around the country. It’s kind of a modern-day door-to-door approach to marketing. They go where the people are and show them their product. Each showroom shows off the innovation behind a variety of vehicles. You can also set up a test drive while you’re there.
Share Your Vision
Two years before the first Tesla car emerged, Elon Musk shared his vision for the brand. He wanted to make it clear his purpose was to “help expedite the move from a mine-and-burn hydrocarbon economy towards a solar electric economy, which I believe to be the primary, but not exclusive, sustainable solution.”
The Secret: Go where your customers are. Depending upon your product, that could be anywhere from the internet to shopping malls, to parking lots or busy sidewalks. Be sure to share your vision. What are your brand’s goals? Create press releases and share them via your website. Send an email to your mailing list, local newspapers, influential bloggers, and local websites.
Learn Marketing from Luxury Car Brands
You can learn a lot about how to create and refine your marketing strategy from luxury car brands. Some of these brands have been around for more than 100 years, so they’re aware of what works and what doesn’t. We can learn from both their wins and losses. Hopefully, their marketing secrets can help your brand succeed.
One idea that most luxury car brands can agree upon is how to treat their customers—to give them the luxe experience they deserve.
Regardless of whether your business is luxury or not, when you want to show your customers how much you appreciate them, send a handwritten thank-you note. Simply Written’s handwritten correspondence is not only simple—it’s also effective. Start today and help your business create connections that last a lifetime.
“Every company’s greatest assets are its customers, because without customers there is no company.” – Michael LeBoeuf Acquiring a new customer can cost up to 25 times more than retaining an existing one. Increasing customer retention rates by just 5% can boost...
Humans have been writing for over 5,000 years. From cuneiform and hieroglyphics to medieval manuscripts, our race has a long and storied love affair with the written word. But it wasn’t until 1440 AD that Johannes Gutenberg invented the printing press, and in turn,...
International business etiquette can be challenging. It changes shape, shifting as you cross borders, taking new forms as you travel across time zones. How you take your tea, how you wear your suit — they send different signals in Osaka than they do in Chennai. So...