DATAPOINTS Social Selling A Digital Blueprint for the Automotive Industry

OEM

OEM social Supplier presence media presence

Customer Dealer Supplier

Partner Suppliers’ social Dealers’ social media presence media presence

Social selling: Leveraging digital ecosystems that enable customers, dealers, suppliers and prospects to discover, connect and share their experiences with the , eventually influencing transactions.

Social Selling: A Digital Blueprint for the Automotive Industry PwC DATAPOINTS

Overview Social media growth Among 15-24 year-olds in the U.S., Selling in the online era of from 2010 to 2011. Engagement infinite connections with social media 34% The automotive industry is amidst an era of Engagement disruption. Traditional models and budgets are with email 22% withering. Consumers’ time and attention have quickly transitioned to social and digital platforms. Interspersed Engagement with instant among those platforms are growing ranks of brand advocates messaging 42% and detractors who share their purchase and ownership Source: ComScore experiences through text, photo and video postings on their personal networks. That process alone is having significant Dealer ad budgets influence on purchase decisions. Newspaper

Television The percentage of people who pause to share their purchase and ownership experiences using social and digital platforms Internet Radio is growing significantly. The process is always on and 2012 relentless. It’s a new playing field for automakers, dealers, Direct mail 2002 and suppliers. The sum of connected experiences shared online Other and how they influence transactions is what we refer to as 0% 10% 20% 30% 40% 50% social selling. Source: PwC Autofacts, 2013

Always-on relationships

Traditional engagement Building on connected experiences Cyclical launches, campaigns, events, and press Value-added media supported by promotions and consistent social announcements yield transactional relationships. interaction yield sustained relationships, helping to inspire advocacy.

Relative size of campaigns =

Media

Social media base Interest Interest

Campaign 1 Campaign 2 Campaign 3 Campaign 1 Campaign 2 Campaign 3

Source: PwC

Social Selling: A Digital Blueprint for the Automotive Industry 2 PwC Part 1. DATAPOINTS The third online era

A generation of marketing practices to begin the transformation to in the automotive industry is being becoming digital . What’s 70% silently and efficiently dismantled. more interesting – and important – Some of the change agents are Apple, is that a smart phone now represents Of the buying process in a Amazon, Facebook, and freedom and desire more so than complex sale is already Google—representative companies owning a car—as a group of complete before prospects that are shaping the digital landscape millennials told NPR in 20131. That’s are willing to engage with and redefining what it means to find an entirely new emotional paradigm a live person. information, connect with people and for automakers. Adapting to these Source: Sirius Decisions buy products and services. cultural changes means focusing on social selling and taking ownership of Change is largely being driven by the digital ecosystem. affluent customers and millennial 65% (also known as Generation Y) who The first online era was the first 10 are between ages 18 and 30 and have years of the World Wide Web, when Percentage of U.S. grown up largely as “digital natives.” automakers relied on websites as consumers who spend time To them, online experiences are as digital showrooms. Push-marketing on social media to learn important as in-person experiences, programs, search engines or about brands, products since the two are closely aligned and integrated campaigns helped drive and services at least once ripe for the ongoing commentary in site visits. One-way, push-based per month. the social news feeds of their lives. communication was the dominant Source: Nielsen, “State of the Media: The This generation of future customers online marketing framework. Then Social Media Report,” 2012 is the forcing function for automakers arrived.

1 “Why Millennial are Ditching Cars and Redefining Ownership,” NPR, 2013

The first online era: Web-connected brands The early years of blogs

35 30 25 Number of tracked blogs, 20 in millions Blogs take root, 15 signaling arrival of 10 social media Web-based car forums 5 begin to organize and 0

Wikimedia Commons, used Commons, Wikimedia under license take shape 2003 2004 2005

719 million people online World Wide Web launched; Mosaic browser makes web accessible

16 million people online

1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003

Source: PwC research One-way communication

Social Selling: A Digital Blueprint for the Automotive Industry 3 PwC Blogs signaled the arrival of social for car owners to seamlessly media in 2002-2003, and the second integrate their four-wheeled digital online era dawned, followed quickly hub into their social networks for by business-friendly social networks. safely sharing data and updates, as Now automakers could connect various low-cost consumer products directly with customers and do already. Automakers can “gamify” DATAPOINTS prospects and their conversations in the ownership experience so that a scalable way. Those networks made customers share trip details, fuel it easy for other networks to cross- consumption, vacation destinations, Auto lags in social share updates, and the digital etc. on their personal networks, How the automotive industry compares ecosystem began to take shape. thereby adding more data and in using social media platforms on a Engagement became part of the awareness to social news feeds. regular basis vs. all other industries. lexicon. Expectations for brands to Overall

Automotive industry participate in social channels grew It’s already a reality that people are and continue to grow. Always-on increasingly introduced to the car communication is the reality. they purchase through family and Online 26% friends via social media updates. communities 26%

In 2013, we began to enter the third That passive, news feed-driven online era, the “Internet of things,” influence is part of what constitutes 38% Facebook whereby Internet-connected devices social selling, the dynamic in which 33%

post updates to users’ news feeds car owners’ and prospects’ everyday about destinations, performance content on social networks is shared, 26% Blogging 21% metrics, goal attainment and myriad commented on and integrated across metadata for social sharing. It is an multiple networks. For automakers,

32% era of infinite communication that means creating, connecting, LinkedIn 22% possibilities. For automakers, cars monitoring and optimizing systems will function as digital hubs, with that enable more widespread sharing

29% their own ecosystems that share data of customer experiences. The other Twitter 14% between owner and dealer, owner part is adopting and growing a social and OEM, owner and OEM partners engagement mindset internally and in real time. The new challenge for externally with dealers, partners and Source: PwC Digital IQ Survey, 2013 automakers is to provide the means suppliers.

The second online era: Social-connected brands and customers

2.7 billion people online

Facebook opens its network to everyone Facebook Twitter grows to grows to 1 500 million Facebook launches as closed billion users network for college students registered users Apple releases first iPhone, ushering in smartphones

719 million people online

Instagram Instagram Twitter debuts at launches acquired by Facebook Android OS released SXSW

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Two-way communication Source: PwC research

Social Selling: A Digital Blueprint for the Automotive Industry 4 PwC Part 2. Connected experiences in the third online era DATAPOINTS

In the third online era, potential system: Its Shop-Click-Drive Social media usage buyers are exposed to numerous program allows consumers to % people in U.S. with social profile % of people in U.S. who use social influencers and disruptors via social purchase a car online from a dealer several times per day media during every stage of their of their choice, all the way from path to purchase. Awareness and financing to delivery. That means 56% consideration can ping-pong at each managed, co-owned or loosely 48% 52% whipsaw rates as socially shared affiliated digital touch point must be 34% 24% 22% pictures, links and/or status updates managed with air-traffic-control- 15% 18% 5% 7% via social media sites shape opinions level guidance. in a crowd-sourced decision-making 2008 2010 2012 exercise. Combine prospects’ personal online Source: Edison Research and Arbitron, networks influencing preference and “The Social Habit,” 2012 By the time prospects set foot in a a potential all-digital purchase dealership, their digital experiences process, it’s incumbent upon Current connections with the brand site, dealers’ sites, marketing and technology leaders to and the online opinions of friends, partner on digital ecosystem design Percent of auto brand outreach family, colleagues, as well as some and management. Automotive met with positive 20% professional reviews, may have marketers must ensure social response already contributed to a final technology is seamless, invisible and Percent of auto decision. That presents major simple from an uncompromising tweets from implications for the role of the user-centric point of view; social qualified buyers 75% dealership salesperson. For selling thrives when simplicity and Percentage of auto automakers, this requires widened, efficiency are key objectives and thus tweets from real-time focus on digital ecosystem become their own value proposition. “dreamers” 25% experiences. General Motors has Digital ecosystems should expand as Source: Digital Roots LLC, “Smarter Social invested in a fully digital sales quickly as social technologies do. CRM,” 2013

The modern digital consumer

90% 79% 71% 70% 70% Consumers who Twitter followers Consumers more Consumers using Active online adult trust peer more likely to likely to make a social media to listen social networkers recommendations recommend brands purchase based on and learn about who shop online. posted on social after becoming a social media other consumer media sites. follower. referrals. experiences.

Source: Nielsen Global Source: iModerate Research Source: HubSpot case study, Source: Nielsen, "State of the Source: Nielsen, "State of Online Consumer Survey, Technologies, 2012 2011 Media: The Social Media the Media: The Social 2011 Report,” 2012 Media Report,” 2012

Social Selling: A Digital Blueprint for the Automotive Industry 5 PwC Social selling in the digital ecosystem Infinite communication possibilities exist when digital systems and platforms are connected, similar to the way commercial social networks are, allowing people to easily share their brand experiences in real time. For manufacturers, managing the digital ecosystem is a key imperative during the third digital era of infinite communication possibilities. DATAPOINTS Word-of-mouth (WOM) Engagement

Expert opinions Observation Discovery Pre- Brand commitment Evaluation strength Consideration Commitment Pay Compare

Transact

Awareness Buy

Discover Engage Transact

Post- commitment Exploration

Advocacy Experience Bond Passion

Reflection Repeat Allegiance Action need Re-engagement Emotion Validation New Source: PwC consideration

Here’s one way to view social selling means for prospects to share their A positive connected strategy: From an orbital vantage buying journeys on their social experience empowers point. Digital and social platforms media accounts. For example, customers to: are often so extensive that they BMW’s MINI division encourages become their own “planets,” each potential buyers to establish a digital with its own governance, culture, “garage” to house the model they Discover and learn about energy and ability to affect change on have configured on MINIUSA.com. brand value and offerings— anywhere, anytime. business. A digital blueprint Users are invited to share their connects the planets around three configured model on their social Engage with a voice that’s simple yet distinct stages, allowing networks. Conversations about the heard and acknowledged— potential buyers to share and configuration take place on the contributing to brand equity syndicate posts, photos, videos and user’s Facebook account, which are through conversation. recommendations easily and automatically shared in their news seamlessly on any platform. feeds. As data on the next page Transact in a fast and demonstrate, BMW leads all other frictionless way—from any A key next step in devising a social- legacy automakers in online device on any channel. selling blueprint is to provide a mentions compared to units sold.

Social Selling: A Digital Blueprint for the Automotive Industry 6 PwC Comparing car sales to online mentions Social media asks a fundamental question: What’s new? Online mentions are often fueled by new products, new data and new experiences, and the car-buying experience, from research to driving home from the lot, can be a rich source of mentions. For this whitepaper, we compared 12 months of total unit sales to the total DATAPOINTS number of online mentions during the period. While the mentions are not exclusive to new car purchases, they can serve as an indicator to how well brands are engaging people during the buying experience. How 4 OEMs compare Number of mentions and unit sales, monthly.

Ford GM 1 420,000 Mentions Ford 350,000

Toyota 280,000

Chrysler 2 210,000 140,000 Honda Sales 70,000 Legend Nissan 0 Total number of online S O N D J F M A M J J A S Hyundai mentions, in millions 2012 2013

Kia Total unit sales, in GM millions Subaru 400,000 Mentions BMW 320,000 240,000 Tesla 160,000 0 0 1 .5 1 1 21.5 22 2.53 3 3.54 44 4.55 Sales Millions 80,000 1 Includes mentions of Chevrolet/Chevy brand 2 Includes mentions of Jeep and Dodge brands 0 Measurement period: Sept. 2012 through Sept. 2013 S O N D J F M A M J J A S 2012 2013 Source: Sales figures from Automotive News, online mention data based on PwC research using Sysomos MAP, 2013 Chrysler

350,000 Mentions Tesla and BMW: Highest ratio of mentions online 300,000 250,000 Newcomer Tesla is making waves, including Mention index 200,000 online enthusiasm. In the 12-month period we The number of online mentions for an automaker 150,000 examined, Tesla sold 15,626 cars and had compared to every unit it sold 100,000 Sales 500,000 online mentions. That’s 32 mentions for during a 12-month period: 50,000 every car it sold. Among the “legacy” automakers, 0 Tesla 32.0 BMW leads in online mentions compared to sales: S O N D J F M A M J J A S 262,200 cars sold and 3.1 million mentions. That’s BMW 12.0 2012 2013 12 mentions for every new BMW sold, six times Chrysler 2.3 BMW higher than its closest competitor. Ford 2.3 350,000 Mentions Subaru 2.0 280,000 In the social selling framework, the higher the Honda 2.0 210,000 number of online mentions compared to the Nissan 1.7 140,000 number of cars sold indicates strong buzz and GM 1.7 Sales online engagement, well-connected digital 70,000 Toyota 1.5 systems that feed online news feeds, and a healthy 0 Hyundai 1.3 loyalty loop to drives sales. For the 12-month S O N D J F M A M J J A S 2012 2013 period between September 2012 and September Kia 1.0 Source: PwC Sources: Sales from Automotive News, 2013, Tesla and BMW lapped the field. online mention data via PwC research

Social Selling: A Digital Blueprint for the Automotive Industry 7 PwC Part 3.

Loyalty and advocacy: DATAPOINTS Currency for social selling The loyalty loop Some car brands have 25,000 whose affinity is a virtual bond for online mentions per day. That the brand, managed without The new paradigm for marketing is the loyalty loop, a framework to explain means digitally engaged car buyers compensation or any form of fiat or purchase decisions based on well- may be subject to a river of opinions directives from the OEM. informed friends, advocates or from friends, family and colleagues influencers. The underpinning of the loyalty loop is social engagement; it’s on social platforms, forums, Authentic (and legal) social selling incumbent upon OEMs to connect enthusiast sites, and self-initiated comes from wrangling together suppliers, partners and dealers into a web searches. Online opinion has user-generated content and re- holistic digital ecosystem that leverages its scale for driving engagement. real-world, tangible effects on sharing it, a practice also known as brand preference (see charts on curation. Content is decentralized page 9). but monitored and curated from a centralized point of view. That Consider Evaluate A connected digital ecosystem helps customers and prospects creates efficiency in winning hearts continually connect, enhance and Suppliers and minds because positive syndicate content along any stage of Advocate conversations on social platforms the buying cycle. That enables OEM are like water over a dam: They social selling to be more findable Bond power leads and opportunity to win and relevant to the prospect, and Dealers Partners ratios. Negative conversations can shareable with their own networks have an undesired effect, but their of friends and family. Experience value is serving as an early-warning radar for product or service issues Automakers should focus on Buy or faulty touch points in the digital building a direct relationship with experience. Among the the customer via any channel. As Who’s who in social conversation-makers are brand dealers evolve and embrace digital selling influencers, advocates, defenders transformation, manufactures and detractors. Advocacy is largely should be standardizing, Brand influencers an untapped pool for automakers. supporting, and amplifying dealer Those who actively share their The strategy is to identify, engage, messaging as part of a systematic opinions, passions, and expertise and activate brand advocates, loyalty strategy. through their typically large personal and professional networks. Brand influencers add high connection value. Listening for advocacy A listening center that monitors external and internal social and digital platforms to understand current sentiment is a key operational component to social selling. Brand advocates and Social media platforms defenders Those who proactively participate Blogs and online forums in public conversations to Social listening Customer call centers promote a particular brand, product, service, or cause and defend against brand detractors. Brand advocates and defenders add high behavioral and Support Influence Insights Marcom Campaigns contextual value.

Source: PwC Source: PwC

Social Selling: A Digital Blueprint for the Automotive Industry 8 PwC Part 4.

Management considerations DATAPOINTS for the third online era

The automotive manufacturer that about this whole network of things.”2 Social-driven leads seamlessly connects its digital Aligning the organization of the The primary sources of social-driven leads, from 2012: ecosystem with customers, suppliers, automaker, not to mention hundreds dealers and the aftermarket on of dealers, into a well-functioning, Web Facebook, platforms that provide uniform, real- real-time network can be daunting, forums, 6% 2% time data, is positioned best for but the automakers that seize the transformation into a digital brand. digital brand trophy of the future will As Tony Fadell, the former Apple understand they must move toward executive who co-founded Nest, the collaborative thinking programs and product company that is causing practices—both internally and disruption in the home product externally—so that the organization Twitter, industry, describes it, “Disruptive will itself becomes an integral part of 92% technology isn’t a better sensor, it’s the digital ecosystem.

An automotive digital ecosystem blueprint A digital ecosystem makes multiple, seamless connections:

• Connect the brand with customers • Connect suppliers with other suppliers • Connect customers with dealers • Connect partners with other partners 15% • Connect dealers with other dealers • Connect OEM teams enterprise-wide Of social media Connect everyone and everything to social media platforms and brand websites. conversations are turned into test drives. Social media platforms Brand websites Organization-wide collaboration group OEM $2 Collaboration group for suppliers The cost per social-driven lead.

Customer Dealer Supplier OEM 67 Collaboration groups for dealers The number of leads a dealer must reply to in Legend order to sell one vehicle. Connected ($134) system Partner Brand/model collaboration groups for Data sharing customers / users Source: Digital Roots LLC, “Inside the Customer Experience: Insights About Source: PwC Collaboration group for partners Today’s Connected Consumer,” 2013

2 “Tony Fadell’s Nest is Making the Smartest Smoke Detector in the World,” Forbes, 2013

Social Selling: A Digital Blueprint for the Automotive Industry 9 PwC Measuring for impact Digital ecosystems are data factories. A properly architected system collects, monitors and shares contextual, real-time results about conversations, influencers, relationship strength, engagement, message effectiveness and DATAPOINTS social selling results across the enterprise. Digital ecosystem data help strategists plan for future work while helping practitioners pivot quickly. A Digital ecosystem mission control-room setting signals its importance as a centralized function, helping ensure organizational alignment. investments

Technologies enjoying growing investment levels in 2013. Forum s Priority 2

Blogs Priority 1 Ideatio Priority Overall industry 3 Video Automotive industry

Real-time traffic Social listening results Ecosystem health 38% Data analysis 32% Site visits Engagement rates Share of voice vs. competitors Site drivers Early-warning radar on issues Follower numbers SEO/SEM Positive-negative sentiment analysis Shares/retweets 31% Customer mobile 18% Referrals Trend analysis Participation percent Social revenue Campaign monitoring Fault analysis

Call resolution Influencer identification Insight gathering 52% Employee mobile 44%

30% Internal social 19%

33% External social 29%

Source: PwC Source: PwC Digital IQ Survey, 2013

4 measurement types Competitive advantage and brand binding agent, causing brand loyalty in a digital ecosystem relies switching to be a bigger decision. Awareness on digital experience management. Organizations that experiment with Total audience exposed to paid, This portends the growth of digital engagement in silos, or hoard owned or earned media. Includes total .com visitors, command centers that monitor data or don’t collaborate across video views, number of traffic, conversations and the overall organizational lines are likely to find followers, retweets, shares, health of the ecosystem. A command themselves fall behind competitors check-ins, page views. center can direct brand engagement that embrace digital agility as an accordingly to established organizational attribute. The longer Engagement governance and engagement it takes an organization to own, The total level of participation. protocols. This helps ensure positive architect and manage a social Includes total interactions, comments, replies, photos/ experiences at every touch point in selling-driven digital ecosystem, the videos posted, click-throughs. the purchase and ownership longer it will take to recover lost lifecycles, plus identify ground. In short, doing nothing is Influence opportunities to supplement he really not an option. How an information source is syndication of experiences. deemed relevant, authoritative Digital ecosystem success relies on and credible. Includes number Brand loyalty in the burgeoning enterprise-wide collaboration, of likes, embeds, external retweets. third online era will be based on the ideally atop an enterprise social roots being planted by automakers’ platform. It’s also dependent on Advocacy online engagement today. When team-driven collaboration in asking The messages, opinions and customers share their loyalty across questions, considering options, and recommendations about a multiple channels over time, that act agreeing on key objectives for a brand. Includes sentiment, and of syndication is like a sticky digital ecosystem blueprint. reach of recommendations.

Social Selling: A Digital Blueprint for the Automotive Industry 10 PwC An organizational model that’s digital-ready

Digital ecosystems require adaptive organizational design to meet the needs of fast- changing technology and user expectations. An agile framework is best-suited for this.

Traditional Transitional Agile

Customer Customer insights Customer data begins Customer insights shared DATAPOINTS insights gathering hampered to inform priorities across the organization by ownership fights. across the company. ensure clear line of sight.

Organization Fragmented Some integration of Nimble organization adapts customer customer experiences. to evolving customer needs. experiences. Top 10 questions Strategy Strategy determined Planning more flexible Strategy regularly updated About digital ecosystem planning: early in year; limited as integrated based on consistent ability to adapt. strategies take root. feedback cadence. How do we create a Measured Inconsistent Increased rigor for Business impact clearly 1 consistent, seamless and impact methodologies. scorecards. defined and measured. simple brand experience throughout the vehicle People Teams compete for Moving from “me to Team members see career owner journey? resources and we”; cross-functional opportunities rise as they visibility. collaboration increase their impact on the increases. business. How is our voice, content, 2 and community Source: PwC management governed across organizational boundaries? As companies prepare for social traditional F&I processes and selling, their organizational structure infrastructure that remain within How do we balance 3 functional measures with must account for all aspects of the traditional brick-and-motor shared objectives across the customer journey—one that cuts dealerships must evolve, including C-suite? across marketing, sales and the the re-evaluation of up-sale and Does our current operating aftermarket. Automakers should cross-sale tactics. These tactics may 4 model allow us to team, consider an organizational drive incremental revenue in the collaborate and deliver framework that fosters more stores, but a drawn out and siloed across organizational lines? collaboration and data-sharing that F&I process can create frustration How do we share expertise brings to the forefront the latest and defensiveness for car buyers at a 5 and competencies across trends and talent across people, moment when they should be our operating portfolio, process and technology. celebrating their purchase. brands and geographies? Streamlining the F&I process will How do we foster innovative For dealer teams, social selling prove to be a customer-experience and creative use of the strategy must inform sales and differentiator. 6 digital platform? service staff with knowledge about incoming and outgoing messaging, Social selling will require dealers to Who and what have primacy 7 in governing technology sentiment, digital tools, and the re-evaluate how sales and service platform decision-making? power to consistently make the staff engage with car owners. The purchase process seamless and proliferation of mobile and social How do we better integrate convenient. With dealer pre-sales technologies will require sales and in-vehicle technology into 8 the overall customer visits on the decline, sales staff need service staff to also be community experience? to ensure that their make and model managers and experience curators in information is not only accurate but the digital ecosystem, expanding How do we deliver insights leverages real-time social their base influence. Dealerships 9 to the right people at the right time to act on and react conversations and product reviews. should focus on enhancing to opportunities and threats technology, creating a digital-centric in the marketplace? These guiding principles apply to the culture, and developing process finance and insurance side (F&I) of training to instill a digital customer- What if we decide to do 10 nothing? the business, too. As more centric mindset and deep expertise consumers purchase online, the with social and mobile technologies. Source: PwC

Social Selling: A Digital Blueprint for the Automotive Industry 11 PwC About PwC DATAPOINTS

PwC’s auto practice PwC's global automotive practice leverages its extensive Contacts experience in the industry to help companies solve complex Brian Decker business challenges with efficiency and quality. One of PwC's Partner global automotive practice's key competitive advantages is US Automotive Advisory Leader 1-313-394-6263 Autofacts®, a team of automotive industry specialists dedicated [email protected] to on-going analysis of sector trends. Autofacts provides our Ben McConnell team of more than 4,800 automotive professionals and our Managing Director clients with data and analysis to assess implications make US Social/Digital practice [email protected] recommendations, and support decisions to compete in the global marketplace. Erich Bergen Director PwC’s social/digital practice US Automotive practice 1-313-394-3206 PwC’s social and digital practice helps organizations capitalize [email protected] on the social, mobile, and other digital technologies that are transforming the way business gets done, from customer value to revenue growth. With a strong, customer-centric focus, PwC’s social and digital practice employs a range of solutions, from operating models, to technology solutions, to customer data to global social and digital strategies.

Contributions and assistance to this report Eleanor Bartosh, Meghan Bested, Sam Eder, Geoff Knox, Terese-An Nguye, Sean O’Driscoll and Todd Shimizu.

Legal Any trademarks included are trademarks of their respective owners and are not affiliated with, nor endorsed by, PricewaterhouseCoopers LLP.

Social Selling: A Digital Blueprint for the Automotive Industry 12 PwC