Mercedes Shift Strategy to Woo Younger Consumers


Libby Banks | June 02, 2010

Luxury auto manufacturers like Mercedes are finding new ways to capture the imaginations of a new generation

Generation Y is coming of age, and as one of the most distinctive demographics since the Baby Boomers, luxury car manufacturers are taking note. Mercedes is showing itself to be one of the leaders when it comes to connecting with this group. The car manufacturer has been harnessing this generation’s enthusiasm for digital communities by a nurturing a private online community, Gen-Benz, which was established in 2008. The concept is simple: create an invite-only community of Generation Y owners and fans that gives members direct access to the brand’s decision makers.

According to the car manufacturer’s marketing VP Steve Cannon, this has been fundamental to decision-making behind the newly launched E-Class Cabriolet. Speaking at the Association of National Advertisers’ Brand Innovation Conference in New York last week, Cannon credited the community with enabling the launch and convincing the company to not yield to "Luxury Shame”. Cannon said that the project’s success has led the company to move almost entirely away from focus groups, to evolving “customer intimacy” via these networks. The regular live chats and group feedback help inform the company’s development of television spots and adjust product performance too.

The advantage of the community is that it is that members are excited to be part of a select group that gives the opportunity to feedback directly to people at the top, plus they are given opportunities like test driving new cars, which they then talk about on YouTube and other social media outlets. It’s a two-way relationship that shows an understanding of the transparency required to make social media work for companies. And in doing so Mercedes is able to regularly conduct consumer research at a much lower cost, building advocacy through that research. Social networking is nothing new, but Mercedes’s approach demonstrates that it’s not a courtesy add-on to its brand. Instead it becomes an effective, and cost effective cornerstone for brand development and innovation.

Another project initiated this year sees the company invite MBA students from top schools in the US to work on project-based competitions that tackle current issues faced by the auto industry. By working with top students from elite institutions on project-based competitions, Mercedes has direct access to the thoughts of its potential future consumer. Of course working MBA students is not new, but this recent project saw Mercedes tapping MBAs to gain direct insight into Generation Y as well as using it as a recruitment strategy.

Mercedes’ approach was corroborated by many of the speaker’s at Generation Next Forum organised by think tank LuxuryLab in May. Teen blogger Tavi Gevinson spoke of the need for Gen Yers to feel part of a secret clique, while Sterling Lanier, president of consultancy Chatter, pointed to Generation Y’s open-minded attitude to luxury brands compared with previous generations of luxury consumers – but only if brands successfully engage and demonstrate true expertise in their field. All this suggests that Mercedes is on the right track: forming an intimate two-way relationship that makes customers feel like insiders while showing that the brand can listen and deliver a relevant, high quality product.

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