Volt: New Technology Needs New Marketing

NEW YORK ( TheStreet) -- "Wine, shrimp and bumper stickers." That was my marketing plan in 1987 as a politically active teenager, organizing soon-to-be like-minded fellow high-school students.

Sometimes, for some products and causes, it's not fruitful to use old geezers using old-fashioned sales and marketing methods. This goes whether you're promoting The Libertarian Party to teenagers or an electric car to engineers. You need to "talk" to the right people using the right methods.
Chevy Volt
Chevrolet Volt

Tesla ( TSLA), for one, appears to "get" this requirement of a new sales and marketing plan better than any other car company in the market today. Tesla has learned a thing or two from Apple ( AAPL), dispensing with these "dealers" that car buyers generally hold in similar esteem to root canal surgery or bargaining for Persian rugs of unknown pedigree.

Tesla has "showrooms" that it directly owns and controls, rather than relying on independent "dealers." You can order a car by going to Tesla's Web site and putting down a deposit using your credit card. There is no "channel conflict" where the dealer's interest is not aligned with the car company's long-term interest.

Apple figured out this "end-to-end" customer satisfaction model a decade ago. By controlling its own distribution through its own store and web site, it could ensure that each customer felt comfortable about the life-cycle service and support of the purchase.

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After all, why should buying a car be any different than ordering your iPad 3 from Apple's Web site or ordering that new Samsung TV from Amazon.com? Granted, a new electric car can be 100 times the price of that new iPad, but ask yourself: Which kind of purchase experience do you dread -- clicking the "buy" button on Amazon.com or Apple.com, or going to the car dealer and dealing with a car salesperson?

You know the answer to that one.

The Volt

A unique car requires a unique marketing plan. And the Chevrolet Volt is the most unique car in the market today, from a technology standpoint. I said "unique," which doesn't necessarily translate into "best" for every single person in society.

>>Also see: How the Chevy Volt Became a BMW

What's a traditional marketing plan for a traditional car? TV advertisements, magazine advertisements, banner ads on the Web, and "educating the dealers" in how to sell the car.

A traditional marketing plan for a new car can cost into the many millions of dollars. But for the Chevy Volt, such a traditional marketing plan is relatively useless.


Car buyers of any one model fall into four major categories:

1. Early adopters. These are the people who read the automobile Web sites (formerly magazines...) and are more than somewhat informed about an upcoming model, typically at least months before the first car is delivered. They put deposits and order the car long in advance.

2. Those who walk into dealerships. Pretty straightforward. The salesperson presumably has a meaningful impact on this type of sale.

3. Those who have seen an ad. This presumably causes that person to go to the automotive maker's Web site for more research, or to a dealership.

4. Referrals. Those who are persuaded by friends, neighbors, co-workers and relatives. In the first year or two, those people are mostly touched by the early adopters in (1) above. After that, it will be their disciples in turn.

How does marketing the Volt fit into this model, and how does it differ from other cars? Let's take it category by category:

1. With about 10,000 cars sold to date, half of them were to the earliest of adopters, which is a huge percentage this deep into the race. Many of those 5,000 or so Volt owners put down a deposit a year in advance.

2. Walking into a Chevrolet dealership for the first time and making up their minds about the Volt there? Not a chance! At least not in favor of the Volt. People who knew next to nothing about the Volt saw the $44,000 price tag and said: "I'll take that Cruze over there, for $20,000." It's hard for most salespeople to describe all the unique advantages of the Volt to a buyer during one dealership visit.

3. Seeing an ad and becoming interested in the Volt? Highly unlikely as well. The technology in the Volt is highly complex and does not lend itself to a 30-second commercial. You also simply cannot communicate the Volt's smooth, powerful and silent driving experience without actually driving the car, or at least having it described to you by someone you trust, repeatedly.

The "someone you trust" part leads us to category number four: Friends, neighbors, co-workers and relatives.

Volt owners are uniquely passionate about what they drive. They have typically done far more research about the car than other car buyers. They share their experiences with friends, neighbors, co-workers and relatives every day. They take them on test drives, looking as giddy as a school kid in a go-kart. They take pleasure in convincing the people they know, and in actually making a sale.

Sales Angle

In other words, Volt buyers aren't the ones who stumbled into a Chevy dealership, perhaps after having seen an ad. They're either one of the earliest of adopters who got their car by 2011, or they were persuaded by one of those earliest adopters after many long conversations, demos and reinforcing claims.

>>Also see: Chevy Volts Are All But Sold Out in America

When you are talking about radically new technology in a car, you are unlikely to be persuaded by a slick ad or a slick car dealership salesperson. On the other hand, you are likely to trust the repeated detailed statements by your friends, neighbors, co-workers and relatives.

In order to understand and fully appreciate the Volt, you need to be familiar with the finer details of its engineering. This is different from most other performance cars, where performance is measured and understood in a very linear way. Basically, with a "regular" performance car, the only formula you need to understand in order to "get" it, is: Larger engine and/or more refined method to pump gasoline into, and out of, the cylinders, means more power, which means the car is faster or otherwise more efficient. And that's the core of a premium experience.

With a Volt, it's many times more complicated than that, in many dimensions. It is not required that you be a mechanical engineer in order to purchase a Volt, but it helps. In order for you to be persuaded about the mechanical elegance and complexity of the Volt, having at least a serious interest to educate yourself about the finer engineering details is a major plus. Specifically, a prospective buyer of the Chevrolet Volt needs to somehow be talked into viewing this 36-minute detailed video description of how the Volt manages to be so efficient, while still being so powerful.

Once you are finished with that video, I would have a few more for you, after which you would have a university engineering diploma stapled to your forehead -- and you'd be very much programmed to make the Chevrolet Volt your next car. This is what it takes, folks!

So who is going to persuade a prospective Volt buyer to watch, for starters, this 36-minute engineering education? The salesperson at the dealership won't. An advertisement won't. It can almost only be a friend, co-worker, neighbor or relative. This person will probably be pushing you for weeks and months, until you have eventually been persuaded to make the Volt your next car.

The New Model

Now that we have established that GM ( GM) should stop wasting Volt marketing dollars on advertisements and on the belief that the salespeople at the dealerships can be effective in selling the Volt, what should GM do precisely?

Here is the answer: GM needs to utilize technology and social networking in order to get existing Volt owners to sell the car to their friends, co-workers, relatives and neighbors. Basically, seeing as the successful sale of the Volt will take many hours of personal persuasion, GM should incentivize its Volt customers to formalize their hobby sales process.

The tool to achieve this is a Web-based and mobile app-based "social dashboard" for each Volt owner. Here is how it would work:

1. The Volt owner enters the name and some basic information -- physical address and email address -- into a form for each "customer prospect."

2. The "social dashboard" shows a series of "milestone" columns for what the Volt owner should do in order to personally persuade someone to buy or lease a Volt. Here is a list of the possible milestones:

A. Talk to the person about the benefits of the Volt. This could in turn be sub-divided into energy savings, quality of the drive, construction of the car, etc.

B. Offer the person to test drive the Volt, so they don't have to feel the pressure and perhaps geographic inconvenience of going to a Chevy dealership.

C. Persuade the person to view a video or two describing the Volt engineering in detail.

D. Go through a Volt PowerPoint presentation from the Chevrolet Web site together, adding the personal friend-to-friend touch to each page.

Hopefully after these steps, more likely to take weeks or even months, rather than days, a sale or 36-month lease is made. After this considerable work, who should get the bigger commission on the sale -- the Chevrolet dealership, or the Volt owner who took lord knows how many hours to make the sale happen?

GM should be able to offer at least something close to $1,000 per car to each one sold by an existing owner who used their persuasive powers to argue for the Volt's benefits. This is how complex cars are sold in the era of social networking.

But it doesn't just stop there. Chevrolet already has some activity on Facebook, with occasional Q&A sessions and so forth. That's a good start, but it doesn't give GM much in analytics. GM knows essentially nothing about Jane Do trying to persuade her co-worker John Smith to buy a Volt because she is passionate about the quiet and smooth gasoline-free driving experience around town, while still being able to drive it to Las Vegas for her monthly poker competition.

Companies such as Google ( GOOG) and Facebook have as their most crucial asset the kind of analytical knowledge that enables them to "map" the thoughts and social relationships of all of their users. GM must obtain the same kind of knowledge about their own users, and how those users in turn work to sell other people the GM car they like the most.

Specifically, by utilizing the kind of "customer prospect dashboard," GM would be able to track, essentially in real time, how the 10,000 existing Volt owners are working on, perhaps 100,000 other Volt sale prospects. Only a small percentage of them would realistically result in a sale, but GM could help "push" these sales as the midwife of the eventual order.

Data Tracking

For those prospects that do not turn into a sale, GM would quickly find out why. Perhaps someone really needed a Suburban or minivan-style car body, instead of a fairly compact four-seater? Was it too expensive? Not luxurious enough? Did it need a sunroof? This kind of information could even help GM decide what kind of cars to build in the coming years.

Every Volt owner would be issued some form of authentication to activate his/her Volt social sale dashboard. It could be the their cars' VIN number in combination with a user name and password. The actual Web-based dashboard would be integrated into a GM analytics engine, on the back end. In many ways, this would look a little bit like Facebook, but would have to be based on something that the enterprise controls and can analyze in real-time.

This type of enterprise-centric Facebook could be Chatter by Salesforce.com, for example. In this case, the "social Volt sales dashboard" could be perfectly customized by GM, and GM would be viewing the analytics in real-time: Did Tom Jones go over the engineering video and slides with Rita Rock? No test drive yet -- why not? And so forth.

GM would soon be sitting on a database with eventually millions of people whom they know were exposed to what precise layers of arguments and techniques. For all the attempts at a sale, they would know what went wrong, and offer other current or future product to address those missing needs if at all possible. And the probability of eventually closing a GM sale would be dramatically increased.

Existing Volt owners, already enthusiastic and willing to talk to others about their almost universally positive experiences, would redouble their efforts to evangelize the product. For example, how many Volt owners aren't approached and asked about their car almost every other time they plug into a public charging station? Volt owners often end up talking with strangers for minutes. Even more with neighbors. Why not incentivize them to jot down their info and offer to get them started on an information process? Imagine the lead generation!

Once people get in front of a computer -- although of course there should be a mobile app for this as well -- they would input the initial info and start to move along the grid of milestones that could yield a sale and be rewarded by the eventual monetary prize for a successful sale.

GM has been trying to sell the Volt as if it were any other car, where no or little customer education is needed and the owner passion isn't there. This needs to change. I have outlined some details of a plan that would probably cost GM a lot less than TV ads and dealer incentives, but would yield more sales and much more analytics that would snowball into further positive uses for GM.

Army of the Faithful

Almost everyone who gets to test drive a Volt and has understood and appreciated the Volt's finer engineering points becomes very impressed. The most effective way to get as many people as possible to cross those lines is to incentivize the existing users on a social platform with milestones and an analytics engine for GM to monitor the progress.

The Volt will sell better once prospective buyers are educated and take a test drive. This plan achieves those goals.

It may not be the same kind of "wine, shrimp and bumper stickers" as in my 1980s high school political campaigns, but it would be an example of a transformation of an outdated sales/marketing model into a more successful social enterprise of 2012.

At the time of submitting this article, the author was long AAPL and TSLA.