When Jim Cross, CEO of Mercedes-Benz of Boise, called to ask if I’d be interested in doing some research for his car dealer, I responded: “I’m not really a luxury car gal, so you might prefer someone else do the work.” Cross responded, “And that’s exactly why I want you to do it.”
The project turned out to be one of most interesting projects of my career. And after test-driving a few cars, I experienced the luxury and safety of Mercedes for myself!
Mercedes-Benz turned me into a believer, but the challenge was convincing other consumers to feel the same way. According to Cross, current customers skewed 65+ and male. Who would be the next most likely demographic to buy?
Behind the Eight Ball
Mercedes Benz has historically been the cream of the crop when it comes to cars. As a good friend recently said to me, “I drive a Mercedes because it’s the best.” Apparently, the manufacturer agreed with her advice in creating their tagline.
Sales of Mercedes-Benz in Idaho have lagged behind industry averages, despite this stellar reputation of quality. Why do these cars sell like hotcakes in states like California and Washington, and not in Idaho? Especially among the younger clientele.
Our plan to solve the puzzle
Cross and his team had a few hypotheses for the lagging numbers: (outdoor) lifestyle, (lower average) income, (so old they’re dying) customer base and dealer location. We carried out extensive research to question those assumptions, including internal interviews, mystery shopping, a quantitative study and focus groups.
It’s a mystery
I interviewed internal staff, including sales and service personnel and even finance folks. I visited Audi, BMW, Acura, Infiniti and Lexus (I know, someone had to do it) and hired others to mystery shop Mercedes-Benz. I even flew to California to visit dealerships in that state to better understand what they were doing so well.
No surprise, service was inconsistent across the board. A consistent theme was:
All prospects should be treated equally at a luxury dealer, even if it’s a woman in a pair of jeans. Make no assumptions. Make no judgments.
Who is most likely to buy?
Working with colleague Kim Donovan, we fielded an online survey to customers and prospects. The goal was to understand the car buying habits of Idahoans and how Mercedes-Benz could fill a need and desire for a younger demographic than current customers.
Our findings revealed that the 30-40 year old females, both single/working and married/non-working, were the most likely to buy.
After narrowing down on this demographic, how need to know how we could convince this demographic to upgrade from their Honda or switch from their Audi.
Stereotypes matter. At least to some.
To understand the mindset of customers and prospects of all ages, we then carried out interviews in person (at a local country club, with a wonderful meal included – the best location for groups I have ever moderated!).
Our focus groups validated the female prospect, but we also learned about other considerations, influencers and obstacles. This demographic of women vehemently disliked the “pushy salesman” and preferred marketing messages that focused on peace of mind and luxury in a relaxing way (think spa instead of status). From our “take a car to a party” exercise, we learned a lot about luxury car stereotypes. Millenials are far less concerned about the stigma associated with brands than X-ers or Boomers.
A surprising finding was how much customers appreciated the focus group invitation. Our wealthy, older male attendees were happy to take time out of their day to share their thoughts and opinions.
Don’t underestimate the power of asking your customers for their thoughts and opinions.
Bring meaning to research
We didn’t want Cross and his team to feel overwhelmed by a bunch of research data. So we also provided actionable recommendations on who to target and how best to reach them through marketing initiatives.
Recommendations included showroom renovations and more female salespersons. We created customer personas and recommendations on how to market to these audiences – online, offline and via social media. We came up with key messages and a new company tagline.
A 37-old female professional has different tastes, interests and habits than a 65-year old man, and the marketing mix should reflect this.
Sales are soaring
Just the other day I heard a new radio ad for Mercedes-Benz that bubbled with personality. Even though I am slightly outside their target market (much too young, of course), it still resonated with me.
Buying speaks louder than ad copy, however; and sales are up 20%. Though Mercedes-Benz hasn’t completely shifted their customer base from 65 to 35, drivers will skew younger over time. At the very least, the dealership can convey the magic of Mercedes-Benz among millenials – and when they have the buying power, they’ll choose the best.
“The research, especially the focus groups, provided great direction for the business. We’re renovating our showroom and always looking for qualified female sales personnel. Sales are improving and our new tagline ‘peace of mind since ‘69’ truly reflects the heritage of our dealership.”
Jim Cross, CEO of Mercedes-Benz of Boise and Lyle Pearson