Mercedes Cuddles Up To The Gen Y Consumer

by , May 19, 2010, 5:29 PM
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At the Association of National Advertisers' Brand Innovation Conference in New York on Wednesday, Mercedes-Benz marketing VP Steve Cannon talked about how the brand is going beyond customer satisfaction to something he calls "customer intimacy" -- a quality a brand needs to create brand advocates and disciples. "I'm talking about getting that much closer to your customer -- that makes some of our ways of targeting them look Stone Age," he said.

In the past couple of years, per Cannon, the brand has been pursuing two initiatives designed to do that. "We have actually taken money away from things like focus groups and the like and moved it to these new programs." To reach Gen Y consumers between the ages of 16 and 33, the company started Gen-Benz, an online community among so-called "digital natives" who grew up with the Web. The company recruited owners and non-owners alike within that cohort to engage with them in an online community.

"We asked them questions like, what do you think of brands, who do you turn to for decisions, what kind of TV do you watch -- so we were getting rich sets of data," says Cannon, adding that the company has learned that asking builds advocacy. "What I love about this is, it's quick, easy and so comfortable for them. They just hang that camera in front of their face and talk to us."

There are now 580 Gen Yers participating, 60% of whom drive the brand. "We wanted a well-rounded group," he said, "not just people who have decided we are the brand for them." One group within the group went undercover and served as mystery shoppers at Mercedes dealerships as well as those of competitive brands, and came back with harsh comments.

"They weren't being treated that well," said Cannon. "They were ignored; the salespeople were too old and disconnected from them. The sales staff often didn't understand the product well. Here's a truth we wouldn't have known about for a couple of years."

Also, he says, the company will offer testing fleets for every new vehicle launch so Gen Y members can test the vehicles and talk about them on YouTube and other social media.

The second program was to translate the Gen-Benz program to current Mercedes-Benz owners with a program called M-B Advisors. "Currently we have about 1,800 people participating, and they aren't doing it once and going away; 70% of them log in regularly," says Cannon.

The program epitomizes the brand intimacy he wants for M-B. "The most essential item is [the fact that] we are in their living room; we can get that close," says Cannon, who has live chats with the group every month, showing TV spots and getting feedback and discussing product. "At the end, they are all saying thank you to me; it should be the opposite."

He says the group of brand advocates has had a direct influence in how the brand is going to market with its limited-edition halo-car supercar, the SLS, launching this year. "The initial plan was to use it in a halo campaign. After the recession, we thought, 'Does that make sense for a brand campaign?' We were nervous about being out of sync with what was happening in the economy," says Cannon.

"What we found out surprised us. The M-B Advisors said they were tired of doom and gloom, [saying,] 'Give us something to be excited about. If you only spend time being rational, you are missing the big picture.'"

When the company showed them storyboard of the spot, their reaction was so strong that Mercedes-Benz decided to go ahead and run with it. The ad shows iconic moments in sports, history and popular culture cutting to beauty shots of the SLS. Cannon says the ad has "not a single rational argument; it's all emotion, all about the brand."

The M-B Advisor group also helped the company last year, when terms like "Luxury Shame" were being bandied about as the economy fell through the floor, and conspicuous consumption was lambasted.

"They said, 'Just because my 401(k) has dropped 20% doesn't mean I'm going to abandon what I hold as important," said Cannon. "So we decided not to market down to the economic circumstances. We launched the E Class in that environment. The reassurances from the M-B Advisors kept us from potentially stumbling and doing something different."

He says the lessons are that marketers will be amazed at the length to which customers will go to help the brand if they feel like insiders.

2 comments on "Mercedes Cuddles Up To The Gen Y Consumer ".

  1. Jerry Shereshewsky from GrownUpMarketing
    commented on: May 20, 2010 at 7:29 a.m.

    Cuddling up to Gen Y if fun but unlikely to sell significant numbers of MB's expensive cars. Probably makes some sense for their lower end models. Quick question: of their MB owners in their Gen Y panel...how many purchased their cars themselves with their own money? How many purchased new cars?

  2. Hal Stinchfield from Promotional Marketing Insights
    commented on: May 20, 2010 at 9:10 a.m.

    Mr. Cannon's supervisors should be very proud of his foresight. This is an amazing long view intiative that will pay dividends. I wish my clients had this kind of intuition.

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