Getting By With a Little Help From Your Friends

by John Gerzema on January 13, 2009

In times like these, it makes a lot of sense to play to your base. Loyal customers after all, need to be paid extra-special attention to as marketers move from growing their business, to merely protecting their market share. But your brand advocates can do more than cover you in a downturn. They can be the reason you stand out and shine.

Subaru is an interesting case in point. Subaru was one of the few automakers to grow its share in an otherwise annus horribilis for the auto industry. Yet its brand fans are a curious lot and not the ones you’d think would spark a sales run. They’re highly educated and extremely pragmatic: Subaru’s buyers tend to hold on to a car for an average of 7.3 years as TIME explains, often buying less car than they can afford. One doesn’t picture Subaru’s customers as the catalyst of the current credit crisis, so why is Subaru’s share growing?

The reason is they evangelize: Subaru owners honestly, truly, ‘love’ their cars and will let you know it. According to TIME, “Subaru has leveraged its existing customers, who identify more with their cars than perhaps is healthy. “If you stop a Subaru owner at sporting event, ski slope, shopping center, they’ll tell you, ‘I love this car,’ ” says Mahoney. And being the opinionated-bumper-sticker type, they are more likely to recommend the brand than even Toyota or Honda owners”. Subaru activates its brand fandom organically with strong pockets of evangelists in the Northeast and Rocky Mountain states, where all wheel drive matters.

My hypothesis is social networking and peer-to-peer dynamics are driving a resurgence in the Subaru brand. After all, we know that 72% of people now base brand decisions on what their networks suggest, rather than advertising. Whatever they’re doing, Subaru did it without the typical heroin of rebates and other deals:

“We had to bring down our incentive costs and stop selling based on the deal.”

                                                                                                      -Tom Doll, executive vice president, Subaru 

Times like these actually demonstrate the fruits of your labors. In Subaru’s case, they’ve widened their driver base through the free advocacy of the community they’ve painstakingly built and nurtured. Social media does work and in Subaru’s case, its brand fans are behind the wheel. 

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Viewing 2 Comments

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    • v
    Great example. The better you know your customers, the better your brand can create meaning and relevance--and the stronger your brand relationships. Subaru was smart to build on its strengths with its target audiences. Subaru was just as smart to avoid "the heroin of rebates and other deals."

    I recall a few years ago when the new VW beetle was battling the newer Mini and Z. Instead of taking the automatic choice with another rebate program, VW looked closely at its target audience and chose to add value. WV became the first automaker to tie with Apple (another brand where design truly matters) and offer a free iPod and docking station. They also gave a gift certificate to Amazon.com as a test drive incentive.

    Results: VW reversed sales declines and exceeded sales objectives, moving 6,000 Bugs with the promo. They exceeded their test drive objective, as well, getting 3,500 folks to take a spin. And here's a kicker. According to Edmunds.com, while the competition pumped an average $2,600 worth of incentive dollars into their cars, the VW program was estimated to cost only about $450.

    Know your target. Make smarter marketing decisions. Subaru certainly has, as VW did in the past.
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    • v
    Perhaps this is true.

    An alternate explanation for the success of Subaru is that the automaker has a strong sense of what is manufacturing (vehicles that are designed to operate exceptionally well in challenging weather and terrain) and to whom it is selling (as stated, customers in the Northeast and mountain states).

    Unquestionably, there is a network effect at play for a company like Subaru. More significantly, that network effect has geographic and functional components that spur, not hinder, word of mouth - be it online or off.

    In a down automotive market, utility is going to continue to drive real value. How fitting that auto makers who have forgone utility for upmarket aspirations are now having difficulty finding people who will evangelize on their behalf.
 

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