COVID-19: Striking back with data-driven initiatives
The COVID-19 pandemic is expected to result in an immense downturn on the automotive sector, however we believe in a data-driven strike back to mitigate the impact.
Adapting to a changed landscape
COVID-19 has dramatically impacted the automotive sector, forcing brands to adapt to a rapidly changing landscape. Car sales across Europe were off to a slow start in 2020, with sales dropping by 7.6% in January followed by 7% in February compared to a year prior.
The most severe damage was however done in March, as sales were slashed throughout Europe, dropping by 51,8% compared to March 2019. Several of the largest markets within Europe took a huge hit, with sales decreasing by -44,4% in the UK, -37,7% in Germany, -72,2% in France and -85,4% in Italy.
The COVID-19 pandemic has undoubtedly resulted in unimaginable consequences, with estimates pointing towards European car sales facing its largest downturn in decades — even surpassing the financial crisis of 2008.
With shockwaves riding through the automotive industry, many are asking themselves; how do we ride out the crisis to emerge stronger than others in our industry? However, hunkering down and letting the storm rage does not qualify as an adequate form of resilience. Brands should not let themselves be paralyzed by these unprecedented times, but instead strive to reimagine a new future. In fact, imagining not only what could go wrong, but uncovering new opportunities poses as the strongest form of resilience. And so, brands should not seek to ride out the crisis, but instead aim to learn through this experience to win in a new world.
Preparing for a new normal
The magnitude of challenges brought on by the COVID-19 pandemic is larger than anything automotive brands have been used to dealing with. Brands must adapt quickly in order to face the extreme level of uncertainty within the sector and bring reassurance to customers. And so, brands should be asking themselves; How do we implement adaptability and resilience into our existing strategy in order to prepare for a new normal?
Initially, brands should obtain a realistic view of their starting position in preparation for multiple scenarios that take several versions of the future into consideration. In addition, we recommend building a pipeline to create a realistic forecast of what can be brought in financially. From there brands can adapt to a range of scenarios to come.
However, brands should not rely on traditional demand forecast, as these will not sufficiently account for the rapid changes that are currently disrupting the market. We recommend adapting data-driven methods to initiate reliable scenario-planning, as well as converting scenarios into tangible ideas for action. During this unprecedented time speed is of the essence — and the invisible enemy being uncertainty bottlenecking your decisions. Predictive analytics and forward-looking intelligence can provide a forecast that will enable brands to stay on top of escalating issues. Most importantly, it will increase the speed of the learnings brands adapt whilst preparing for a new normal.
Challenging your traditional marketing strategy
Whilst the automotive industry faces its toughest crisis in history, marketing budgets have been slashed. And so, brands must avoid spreading their resources across a range of marketing opportunities with prospects being vague. To take every possible measure, in an attempt to brace your organization for every potential scenario, can quickly turn out to be an expensive path to nowhere. Instead, brands should aim at reengaging in ways that allow them to understand, where their resources are spent most effectively.
Yet, organizations continue to fall back into old habits, seeking outdated and inefficient marketing methods to attract customers. Brands are throwing the kitchen sink at reengaging customers with traditional advertising efforts including commercials and television airings. The outcome and precision of traditional advertising is drastically declining, whilst being a costly approach in comparison to data-driven solutions. Utilizing data to create leads offers brands an efficient way of identifying relevant subjects, with a high probability of becoming your next customer. When considering a changed sales funnel, brands can turn to data-driven measures for assurance of real return on investment.
From reactive to proactive crisis management
COVID-19 has forced unknown grounds upon us, putting a high demand on valuable knowledge and insights. A real survival strategy comes from putting gathered insights into system to pave the way for a COVID-19 strike back. In a matter of fact, the solution lies right at hand. By identifying leads from existing data streams, brands can support their pipeline and maximize their sales potential, whilst initiating a proactive crisis management. Tracking leads can point out high-probability customers, allowing dealers to prioritize initiatives and target messages to reengage with customers. And so, existing data can be transformed into a crisis response.
In addition, the human touch is critical to any data-driven approach. Employee motivation remains a critical driver in determining execution — and with that the overall outcome. However, poor lead quality often results in demotivated employees, who due to lacking accuracy rarely experience success when approaching customers. And so, improving lead quality has a direct impact employee behavior and simultaneously the overall execution.
Politically enforced closure and physical distancing has required a change in mindset. Dealers must adapt to not merely serving customers, but looking to sell, as customers are less likely to visit dealerships. And so, dealers need to use proactive measures to seek out customers. However, current limitations are putting dealers under pressure to find alternative ways of engaging with customers — especially with consideration to new digital touchpoints. The crisis has led to somewhat of an eye-opener, as dealers have found new ways of engaging with customer, such as delivering cars to private addresses for test drives — challenging the traditional timeframe of a sales process.
The COVID-19 pandemic has disrupted the automotive industry beyond imagination. Some solutions have however been in eyesight prior to the crisis, and yet remained uncovered until now. Tapping into unmet potential has never been more crucial. And so, brands must act now, by using data-driven measures to proactively reengage with customers and challenge the traditional timeframe of a sales process. When emerging from the crisis, brands should consider what solutions should be preserved and built upon. In these times of uncertainty, one thing is for sure; the solutions that we now discover will not be temporary, but an indication of the next normal.