Should Volkswagen Use Inbound Marketing?
VW is in the midst of one of the biggest scandals in their 78-year history. After knowingly and deliberately misleading regulators and customers all across the globe, with pollutant emissions up to forty times greater than the legal amount, they face lawsuits, product recalls, hefty fines and plummeting share prices. Not to mention the diminution in trust that will be felt across the whole automotive industry. They’ve admitted fault and are seeking to make amends, with CEO Martin Winterkorn stepping down and taking personal responsibility for the scandal. VW has set aside €6.7 billion (£4.8 billion) to deal with the crisis, though that is likely to be just the beginning. In the US alone, they could end up facing an $18 billion fine. As I write this I see that VW shares have plummeted again as late on Tuesday night VW Group announced that the company had identified “irregularities in CO2 levels” that emerged as part of internal investigations. It’s a rather bleak state of affairs for the makers of the people’s car.
The German car industry has been carrying out damage control since the scandal broke. Top officials from BMW and Ford have defended the German motor industry’s reputation saying that their companies had systems to prevent the manipulation that has plunged Volkswagen into crisis. But the US is still investigating several other carmakers, including Land Rover, Chrysler and Mercedes. The loss of brand equity and trust will lead to tighter regulations and consumers will become ever more sceptical.
But how can Volkswagen salvage their brand reputation? As the saying goes, it takes years to build up trust and only seconds to destroy it. However, this isn’t the first time that this has happened to them. VW was caught and fined in 1973 for dodging similar emissions tests. Though paid $120,000 (the equivalent of about £400,000 today) the manufacturer admitted no wrongdoing. But today’s consumer expects more from companies both small and large. With no quick fix available, what lengths are they willing to go to to try and salvage their reputation?
This print advert immediately reminds me of Tesco’s apology after the horse meat scandal broke. Let’s face it, once the scandal has blown over, people will still buy a VW because they know the quality is good and they’re reliable vehicles. These are what VW needs to focus on getting back into our heads.
With some speculating that the scandal has bought them 5 years worth of bad PR, perhaps a more radical change from outbound marketing to more informative, more educational forms of promotion are needed. With a black mark against their name, VW will have to tell consumers, in no uncertain terms, why it’s worth buying a VW over something else. Forget the aspirational advertising, save some money and create content that helps us decide what car to buy.
Matthias Mueller, the new chief executive of VW has said: “My most urgent task is to win back trust for the Volkswagen Group – by leaving no stone unturned.” Well, moving Volkswagen to use an inbound marketing strategy is a good place to start.
Enter Inbound Marketing
Inbound marketing relies on the idea that you’re marketing to people who want to give you attention, and your goal is to nurture leads through your sales funnel with the end goal of gaining customers and brand advocates. The inbound methodology is focused on educating consumers and building trust. It also offers up to a 60% reduction in cost per acquisition over traditional marketing methods. With VW taking such a financial hit, this is worth noting.
Let’s take brand awareness. We’ll all be aware of VW so that’s no problem, but brand perception is a different matter. Inbound is a great way for companies to establish and communicate a tone of voice, whether that’s authoritative, informative, whatever. Establishing a new tone of voice and starting to roll out content that appeals to VW drivers and car owners, as well as people looking to purchase a new vehicle will slowly work to establish a new public perception.
The reason that I’d stress the importance of educational content for car owners and existing VW drivers is that they are the people who may be looking for a new car in a few years time. The old car salesman adage that you don’t sell a man a car, you sell him 5 cars over 15 years still rings true. VW needs to think about the long term. Not just in terms of share prices and sales, but in terms of reputation.
This isn’t just a question that Volkswagen face though, as the atmosphere of distrust has spread across the entire auto industry. Shifting to an inbound model over more traditional outbound techniques would serve to move the industry away from aspirational advertising, and put the impetus on challenging and addressing the publics growing scepticism. This is also why Volkswagen must consider using Inbound Marketing.
Back to basics
VW built their brand by not being glamorous, but by being honest and practical. Back in the 1950s and 1960s, DDB was tasked with VW’s advertising and the work is still lauded as some of the best ever made. With Bill Bernbach’s innovative approach to print advertising and his understanding that advertising didn’t sell products. The strategy was to keep customers by creating and nurturing them as brand ambassadors, rather than attempting to attract the attention of those who were uninterested in the product. Such is the quintessence of inbound marketing. By using Inbound Marketing, Volkswagen can go back to their roots as the people’s car. A more personal and candid approach is needed and such an approach would serve to take VW back to their core brand values or reliability and practicality. You can’t underestimate the size of the task, but through consistent educational and interesting content, they can move forward to rebuild their reputation.