Commentary

Luxury Automakers Can Succeed With Premium Partnerships

Editor's note: This article originally appeared in Marketing:Automotive on Oct. 8, 2014.

Automakers have found interesting ways of getting people into their cars through fleet partnerships that give people an experience of a vehicle without the ignominy of the rent-a-car.

Rental fleets are a necessary evil for automakers who need to lose inventory, but who also lose money and resale value when they sell to fleet. The other problem is the actual rent-a-car experience of a vehicle. Perceptually, it can have the opposite of an ideal influence on the consumer's feeling about the car, and therefor the brand: There's a good chance you got the car because it was available and there's a good chance it's not in the best shape. It probably smells like the last user's cigarettes (which has happened to me.) 

Automakers want consumers to experience their cars in the best possible environment, in the best condition, in a way that also connects the car to the brand’s ideal experience. When you rent a car, it's a car in a parking lot among cars from every other brand, and no attention is usually given to category, segment, premium or mass. Just to give an analogy in another area I'm fond of: motorcycles. 

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Harley-Davidson brings in a lot of newbies because when you go into one of their stores, regardless of where it is, you get a memorable experience: there's Harley gear, Harley jewelry, Harley apparel, Harley people, and Harleys. But if you go shopping for, say, a Honda bike, you're going into a story that probably sells Kawasakis, Suzukis, Yamahas, ATV's, Skeedos, and who knows what else. 

So, how can marketers of luxury cars and trucks let people experience vehicles in a function-based way so that the experience also fills a purpose (versus an opt-in test drive that requires putting something on your calendar, which is something you can then skip because you don't really want to do it anyway.) 

One way is through hospitality partnerships, cross promotions and sponsorships. Done right, these kinds of programs do triple duty: they reach affluent consumers, they connect the brand to a complementary premium lifestyle experience, and they give these consumers an experience of the vehicle in a convenient and functional way. Lexus has partnered with several spas, resorts and premium hotels (like the Elysium in Chicago) in the past with programs that make the brand the shuttle vehicle partner of the property. Mercedes-Benz has done similar programs at Fashion Week, of which it is title sponsor. Every premium automaker has done something like this.

A new one that's unique is Cadillac's relationship with American Airlines. The automaker and carrier are expanding a program they have been running at LAX, and adding components to it. It makes perfect sense: you're stuck in hell, e.g. LAX, say, because your plane came in late to Terminal A. Your connecting flight was at Terminal X. You missed it by, say, 5 minutes.  

The AA program gives AAdvantage members a ride directly to the connecting gate in a CTS, SRX or Escalade Cadillac. Presumably, you don't have to leave security to go to your connecting flight. The airline said it plans to roll the program out to Dallas/Fort Worth International Airport, LaGuardia Airport and John F. Kennedy International Airport. With LaGuardia, it's probably not an issue because your connecting flight won't be leaving for another day because they'll probably only be using one runway. Dallas/Fort Worth makes sense since the airport is bigger than Texas. 

The partners are going to add a test drive component, but it is incentivized, which is another really good idea, as it has been demonstrated — by me — that you can pretty much guarantee participation in product introductions just by offering something, anything. A cup of coffee at Starbucks. In this case, members of American's AAdvantage, get 7,500 miles in exchange for test driving at a dealership. Both American and Cadillac benefit. What's not to like?

1 comment about "Luxury Automakers Can Succeed With Premium Partnerships".
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  1. Ron Kurtz from American Affluence Research Center, October 23, 2014 at 1:17 p.m.

    I believe the observation "A new one that's unique is Cadillac's relationship with American Airlines" is not accurate. Delta, for some time, has been doing a similar program in Atlanta with Porsche (I believe).

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