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What auto marketers can do to address the impact of COVID-19 on U.S. consumers

Keep It Running

Since the COVID-19 pandemic spread across the country in early March, it has sent the economy into a tailspin, impacting virtually every industry and changing daily life in profound ways. Undoubtedly, one of the hardest hit industries is the automotive sector.

The three biggest automakers in the U.S. all saw year-record lows in their stock value due to the outbreak. Consumers who were in the market for a new vehicle are, at best, postponing purchases and, at worst, forgoing car purchases altogether in the coming months. This has left marketers across the globe with a singular question and no clear answer: What do I do now?

Hindsight from the Great Recession has taught us that a major factor in determining which brands will prevail is maintaining your prevalence with consumers. A famous study by Millward Brown that surveyed over 85 brands in the 2008 recession found that those who maintained their share of voice saw a 9x faster recovery than those who didn’t.

This is particularly true for automotive brands, which are shaped by long periods of relatively passive opinion shifts before the consumer moves into “shopping” mode. Over 60% of consumers enter the shopping process with a vehicle and brand already in mind, making it pivotal for marketers to maintain top-of-mind awareness today to prepare for when consumers return to the lots.

To be successful in the long-term, there are three, distinct “phases” that automakers should recognize and address in the coming months.

Phase 1: Crisis Mode – Support Societal Good

Right now, consumers aren’t acting beyond the day-to-day of keeping their families safe and healthy. Gartner’s COVID-19 Consumer Sentiment Survey explored reactions to the pandemic and found the key emotions being expressed are fear and anxiety. They also found that those who over-index on these feelings tend to expect a greater presence of brands in their life.

Although consumers are not averse to brand communications during this time, hard sell tactics cause them to draw back. Instead, brand messaging should focus on supporting societal good with the goal of remaining top of mind and increasing brand favorability. 

Take Land Rover’s recent action to pull its press fleet of the recently released Defender model. Rather than distribute the fleet to press, the brand deployed them to emergency groups and other organizations like the Red Cross to help combat the virus.

Prove that your brand is “in it” for more than sales, and you’ll be rewarded with brand preference.

Phase 2: Adjustment & Normalization – Align with your target’s values

In the coming months, consumers will begin to adjust to this new way of life – likely a combination of staying indoors and slowly returning to workplaces and public life. Crisis mode triggered a re-evaluation of values and priorities, so brands that can show alignment with this new set of values will do well in this phase. One emerging microtrend will likely be increased consideration and purchase of products that reflect a newfound focus on conservative values, such as stability and security.

Take a critical look at what makes your brand and your product stand out. It may be an added level of service guarantee, extra comfort or reliability or, even, access to exclusive experiences. Be cautious of rushing too far down the purchase funnel during this phase; consumers will still be feeling the heavy economic impacts of the crisis, and may not respond to a product- focused message or be ready to visit a dealership. 

In 2013, Honda U.S. honed in on its goal “to be a company society wants to exist” and extended this to a cause their consumers cared about: saving an American icon, the drive-in theater. With many historic drive-ins facing shut-down due to rising cost, Honda created a campaign to reopen certain locations based on community voting.

Those who do return to shopping during this phase will seek out ways to trial the product, and your brand should keep opportunities to do so available to them.

Phase 3: The New World – Return to Acquisition

This third phase is marked by a return to active shopping for high-value purchases, but the set of factors that contribute to purchase will long be tainted by a sense of foreboding and a need for reassurance that the product will last, provide value and reflect confidence. Which means brands – especially in the automotive sector – are going to be fighting even harder for transactions.

Rest-assured knowing that the work you did to build the brand will drive intent to purchase the product. Hold o? on heavy product messaging until signals point to increased shopping patterns (i.e. increased web traffic of build tools). Instead, be ready with a stellar experience that makes shopping, trial and ownership seamless between the online and physical world. Test-drive programs will return, but they may look different – they may exist solely online via a virtual showroom or perhaps as an on-demand approach, where the vehicle is brought to the consumer’s doorstep.

Mini successfully tested an on-demand model in 2018, allowing a simple tweet to trigger the delivery of a Mini Countryman to consumers’ residences for a 30-minute test-drive. Using social media as a reservation mechanism meant Mini not only drove product trials but generated a large number of impressions in the process.

Put your product at the forefront of consumers’ minds with branded events and experiences, test drive programs and new ways to engage with the brand.

There’s no doubt it’s a long road ahead for the auto industry, with a potential recession looming in the future. However, this is an industry that has proven its resilience before and surely will do so again. Not all brands will rise to the occasion – but staying top-of-mind, tracking with consumer’s shifting mindsets, and standing for something will ultimately bring consumers to your dealership when they once again are open for business.

This article originally appeared in Campaign Live.

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