Sponsor Content Above the Clutter with Pete Krainik
Episode Seven: Man And Machine
Brought to you by: IBM
Volvo will almost double its marketing spend over the next five years and has vowed to shake up the automotive sector, in a bid to have more impact in a category where it has long been swamped by larger rivals with bigger ad budgets.
The Swedish car maker will provide a personal service technician for every customer. Each car will be delivered in person by a Volvo expert who will continue to be on call seven days a week for the duration of the vehicle ownership.
Alain Visser, SVP marketing, sales and customer service at Volvo Cars said, "We want to challenge traditional, conservative car marketing, which starts with TV, print, billboards and sponsorship. The recipe is always the same. But it's not the best recipe for Volvo. When customers buy a Volvo they are buying a relationship -- the personal service technician is like your butler."
Volvo has already started an extensive global training program in order to make sure that by 2017 all dealerships will offer personal service technicians as standard. The service has already started rolling out in Sweden.
Despite being owned by China's Zhejiang Geely Holding Group since 2010, the 86-year-old Swedish auto brand will start to place greater emphasis on its Scandinavian heritage in all aspects of communication. It will focus on brand advertising rather than price-led communications, cut back on sponsorship activity, and virtually withdraw from the auto show circuit.
Mr. Visser confirmed that Volvo is aiming to increase sales volume from 470,000 to 800,000 cars over the next five years, and that marketing budgets will increase in the same proportion. Zhejiang Geely ranks No. 96 in Ad Age's 100 biggest global marketers ranking, with $297 million in measured media spend in 2013, primarily for its Volvo brand, according to the Ad Age DataCenter. Of that total, the majority -- $213.7 million -- was spent in Europe. Volvo's biggest markets are China, the U.S. and Sweden.
Volvo will continue to work with Grey Worldwide London as well as Forsman & Bodenfors, with the two agencies competing for some campaigns. Mr. Visser said, "We will be going for big brand messages, focusing on our Scandinavian roots, and instead of trying a little bit of everything, we will optimize media and use whatever is best in a particular country or region. TV is best for some markets, but in Southern Europe, for example, billboards are very efficient."
Brought to you by: ZOG Digital
Grey London won the Volvo global account a year ago. The agency's first work for the brand, "The Swell," which urged consumers to "seek feeling," was an early indication of the new brand-led direction that the automaker is taking. (Volvo Trucks is a separate company and is not Chinese owned).
Dealerships are being "drastically upgraded" to have a very Scandinavian feel. That includes waiting areas furnished with Swedish interiors, Swedish snacks and drinks served in glasses made in Sweden. However, Mr. Visser said, "We have dealerships, not palaces. These are affordable investment levels."
Volvo estimates that 80% of car buyers now shop online. In order to better tap into this market, Volvo has overhauled its online offering and is attempting to create a seamless experience with the offline world, as well as a personal touch with the dedicated service technicians.
The new website was designed by R/GA. Mr. Visser said, "The biggest revolution in the car industry is happening at home. Around 80% to 90% of customers shop online first, so we have created a website that offers the same brand experience as the dealership. Online, we are starting with the designer editions of our car – not the Mickey Mouse version."
Instead of the standard "build your own car" online model, Volvo will start with what it calls the "designer's choice car," a cool, premium starting point which consumers can then adjust, based on individual tastes and budgets. Once finished, the consumer gets a video showing the car they have designed in motion.
Mr. Visser added, "With the XC90 we made the move to premium. It was the first car 100% designed and engineered by Volvo [under Geely ownership. Other recent models shared some technology with previous owner Ford Motor Co.]. We want to extend our safety leadership and set a new standard in terms of Scandinavian design. The average SUV has 35-50 buttons but we have only eight. For us, premium and luxury are not about showing off and being complicated; we are creating a more subdued, Scandinavian, cocooning experience that is relaxing and not too busy."
Instead of traipsing around the world on the auto show circuit, Volvo will concentrate on a single annual show per region -- one each in Europe, the U.S. and Asia – supplemented by putting on its own press events in several markets.
Mr. Visser said, "At motor shows, there are so many other brands that it's not easy to get the Volvo identity across. We will launch an annual Volvo event where you get to experience our brand and our product innovation in a Volvo way."
Sponsorships, which currently include Gothenburg's Symphony Orchestra, Opera and Horse Show, as well as various golf tournaments, will be scaled back to just the Volvo Ocean Race, which is held every three years and lasts nine months, with competing boats crossing four oceans, six continents and 30,000 miles.
Mr. Visser said, "We are totally reshaping what we are doing and reinventing the way we go to market. We are a small but well-differentiated player and I wanted to think about, if I was starting from scratch, how I would get my message across."