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 andmarketing 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 rootcanal surgery or bargaining for Persian rugs of unknown pedigree.

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

Apple figured out this "end-to-end" customer satisfaction model adecade ago. By controlling its own distribution through its own storeand web site, it could ensure that each customer felt comfortableabout 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 youriPad 3 from Apple's Web site or ordering that new Samsung TV fromAmazon.com? Granted, a new electric car can be 100 times the price of thatnew iPad, but ask yourself: Which kind of purchase experience do youdread -- clicking the "buy" button on Amazon.com or Apple.com, orgoing 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 Voltis the most unique car in the market today, from a technologystandpoint. 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? TVadvertisements, 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 manymillions of dollars. But for the Chevy Volt, such a traditionalmarketing plan is relatively useless.

Why?

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 informedabout an upcoming model, typically at least months before the firstcar is delivered. They put deposits and order the car long inadvance.

2. Those who walk into dealerships. Pretty straightforward. Thesalesperson 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 adealership.

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

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

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

2. Walking into a Chevrolet dealership for the first time and makingup their minds about the Volt there? Not a chance! At least not infavor of the Volt. People who knew next to nothing about the Volt sawthe $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 uniqueadvantages of the Volt to a buyer during one dealership visit.

3. Seeing an ad and becoming interested in the Volt? Highly unlikelyas well. The technology in the Volt is highly complex and does notlend itself to a 30-second commercial. You also simply cannotcommunicate the Volt's smooth, powerful and silent driving experiencewithout actually driving the car, or at least having it described toyou 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 havetypically done far more research about the car than other car buyers.They share their experiences with friends, neighbors, co-workers andrelatives every day. They take them on test drives, looking as giddyas a school kid in a go-kart. They take pleasure in convincing thepeople they know, and in actually making a sale.

Sales Angle

In other words, Volt buyers aren't the ones who stumbled into a Chevydealership, perhaps after having seen an ad. They're either one ofthe earliest of adopters who got their car by 2011, or they werepersuaded by one of those earliest adopters after many longconversations, 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 areunlikely to be persuaded by a slick ad or a slick car dealershipsalesperson. On the other hand, you are likely to trust the repeateddetailed statements by your friends, neighbors, co-workers andrelatives.

In order to understand and fully appreciate the Volt, you need to befamiliar with the finer details of its engineering. This is differentfrom most other performance cars, where performance is measured andunderstood 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 pumpgasoline into, and out of, the cylinders, means more power, whichmeans the car is faster or otherwise more efficient. And that's thecore of a premium experience.

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

Once you are finished with that video, I would have a fewmore for you, after which you would have a university engineeringdiploma stapled to your forehead -- and you'd be very much programmedto 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, forstarters, this 36-minute engineering education? The salesperson atthe dealership won't. An advertisement won't. It can almost only bea friend, co-worker, neighbor or relative. This person will probablybe pushing you for weeks and months, until you have eventually beenpersuaded to make the Volt your next car.

The New Model

Now that we have established that GM ( GM) should stop wasting Voltmarketing dollars on advertisements and on the belief that thesalespeople 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 socialnetworking in order to get existing Volt owners to sell the car totheir friends, co-workers, relatives and neighbors. Basically, seeingas the successful sale of the Volt will take many hours of personalpersuasion, GM should incentivize its Volt customers to formalizetheir hobby sales process.

The tool to achieve this is a Web-based and mobile app-based "socialdashboard" 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 "customerprospect."

2. The "social dashboard" shows a series of "milestone" columns forwhat the Volt owner should do in order to personally persuade someoneto 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 inturn 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 tofeel the pressure and perhaps geographic inconvenience of going to aChevy dealership.

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

D. Go through a Volt PowerPoint presentation from the Chevrolet Website together, adding the personal friend-to-friend touch to eachpage.

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

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

But it doesn't just stop there. Chevrolet already has some activityon Facebook, with occasional Q&A sessions and so forth. That's a goodstart, but it doesn't give GM much in analytics. GM knows essentiallynothing about Jane Do trying to persuade her co-worker JohnSmith to buy a Volt because she is passionate about the quiet andsmooth gasoline-free driving experience around town, while still beingable to drive it to Las Vegas for her monthly poker competition.

Companies such as Google ( GOOG) and Facebook have as their most crucial assetthe kind of analytical knowledge that enables them to "map" thethoughts and social relationships of all of their users. GM mustobtain the same kind of knowledge about their own users, and how thoseusers 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 100,000other Volt sale prospects. Only a small percentage of them wouldrealistically result in a sale, but GM could help "push" these salesas the midwife of the eventual order.

Data Tracking

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

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

This type of enterprise-centric Facebook could be Chatter bySalesforce.com, for example. In this case, the "social Volt salesdashboard" could be perfectly customized by GM, and GM would beviewing the analytics in real-time: Did Tom Jones go over theengineering 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 ofpeople whom they know were exposed to what precise layers of argumentsand techniques. For all the attempts at a sale, they would know whatwent wrong, and offer other current or future product to address thosemissing needs if at all possible. And the probability of eventuallyclosing a GM sale would be dramatically increased.

Existing Volt owners, already enthusiastic and willing to talk toothers about their almost universally positive experiences, wouldredouble their efforts to evangelize the product. For example, howmany Volt owners aren't approached and asked about their car almostevery other time they plug into a public charging station? Voltowners often end up talking with strangers for minutes. Even morewith neighbors. Why not incentivize them to jot down their info andoffer to get them started on an information process? Imagine the leadgeneration!

Once people get in front of a computer -- although of course thereshould be a mobile app for this as well -- they would input theinitial info and start to move along the grid of milestones that couldyield a sale and be rewarded by the eventual monetary prize for asuccessful sale.

GM has been trying to sell the Volt as if it were any other car, whereno or little customer education is needed and the owner passion isn'tthere. This needs to change. I have outlined some details of a planthat would probably cost GM a lot less than TV ads and dealerincentives, but would yield more sales and much more analytics thatwould snowball into further positive uses for GM.

Army of the Faithful

Almost everyone who gets to test drive a Volt and has understoodand appreciated the Volt's finer engineering points becomes veryimpressed. The most effective way to get as many people as possibleto cross those lines is to incentivize the existing users on a socialplatform with milestones and an analytics engine for GM to monitor theprogress.

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

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

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

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