Why People Actually Buy Cars Online in China

From Volkswagen in China, a Preview of the Future of Digital Marketing

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Volkswagen sold more than 3 million cars in China last year, beating out General Motors as the top foreign automaker. The German automaker has a long history in China, but it also offers a case study about what can happen when brands break free of Western conventions.

For example, virtually all new car buyers in the U.S. do research online but completing the purchase is still done in a dealership. Very few of us can imagine buying a $50,000 car on the internet. Yet Shanghai VW, a joint venture with SAIC Motor, a Chinese state-owned car company, now does just that. (To keep dealers happy, it made sure to seek full dealer support when implementing an online sales strategy.)

When VW first set up local operations in China in the 1980s, the puzzle was how to sell foreign cars in a culture where more than 80% of purchase decisions are made by word of mouth. If brand reputation was the engine, how did you step on the gas? The answer finally came with the digital era.

The key to the Chinese auto market is a sophisticated digital communication strategy -- including social, mobile and email tactics -- that engages customers and gets them to begin the online buying process.

With a population of more than 1.3 billion, China has 1.1 billion mobile subscribers. That's 82% penetration. To sell more than three million cars per year, you don't have to look much beyond mobile.

HackerAgency built and executed Volkswagen China's digital CRM strategy to help the auto company develop targeting, lead generation, prospect nurturing, direct sales and loyalty. That digital acceleration strategy is designed to meet Chinese consumers where they live -- on their mobile devices.

Along the way, VW's digital experience has become a teaching platform for Western marketers. Whether marketing in China or elsewhere, Western marketers need to give up the idea that there's a single, linear purchase funnel. Here's what VW discovered:

First, earn trust.
Social-savvy Chinese consumers are open to sharing data and content. They are equally interested in recommendations from their networks. Key to a brand's success is becoming part of that trusted network.

VW earned trust in one overwhelmingly successful campaign called the People's Car Project. It solicited ideas for the future of automobiles from the Chinese public through social media. In 1,000 days, the campaign attracted 14 million visitors who submitted 260,000 ideas. This effort turned 480,000 people into fans and followers. Volkswagen subsequently produced three videos of the finalist cars that the participants suggested. These videos went on to generate 130 million views.

Meet the consumers where they are, not where you think they should be.
To generate action, the objective is all about getting the right message to the right consumer, at the right time in their buying cycle. An email message or content shared on messaging app WeChat posted by VW might be read on a mobile device, then shared, then read again at home on a different device months later. Each of these actions contributes to a crisper consumer understanding, when it is understood what type of content is welcomed and when. Digital CRM makes this possible.

To ensure even more involvement, people who raised their hands and engaged with Volkswagen were invited to events, or to learn about the company's work with environmental projects, or to join crowd-sourced initiatives like the People's Car Project.

To build a better, more holistic view of the customer, seek out dynamic and self-reported data.
Dynamic data gathered online is behavioral, transactional and often self-reported. It's super-smart data.

For example, did an unmarried consumer suddenly start researching child safety seats yesterday? Today, the profile can be adjusted accordingly. And tomorrow, the profile will be further refined, as data from consumers' physical world -- the coming internet of things -- is linked with their online networks.

With a deep analysis of consumer profiles, VW creates predictive models that successfully move leads from "brand engagers" to "car-buying intenders."

So what has VW's work in China taught us? Successful paradigm shifts require CMOs with nerve and vision. According to Forrester Research, social tools didn't become popular in China until 2008, but today 95% of metropolitan Chinese online adults use social media. This kind of growth has meant that a channel may be useful for as little as a year before being disrupted by another. VW's experience teaches us that responsive design doesn't just apply to content or devices anymore, but also to skills and processes between clients and agencies.

Volkswagen's experience in China is about more than selling cars. It's a real-time preview of the future of digital marketing for the rest of us.

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