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Read more about Accenture’s study outlining how clients can transform their automotive marketing and warranty design efforts and achieve high performance.
Marketing analytics are used to maximize campaign effectiveness and accelerating ROI while meeting the evolving needs of their customers. Warranty costs can be minimized by analytics through monitoring vehicle status, predicting and proactively addressing issues before problems occur. Marketing and warranty leaders recognize data becomes valuable only after it’s shaped into insights, informing the decisions and processes that lead to better outcomes. In this Point of View, Accenture outlines how our automotive clients can transform their marketing and warranty efforts and achieve high performance––by taking the guesswork out of estimating business impact.
For most automotive companies, the past three years have been tough. But even as they have started to grow again, they’re under pressure to contain costs and improve service. To that end, two big opportunities lie in using analytical methods to raise the return on marketing and warranty spend.
The recession caused a severe contraction in vehicle demand in North America and parts of Europe, and growth slowed in parts of Asia and South America. In the United States, for example, consumers have been reluctant to spend on new vehicles and, even when they went shopping, found it difficult to obtain affordable new car loans. New vehicle sales in 2009 sunk to 10.4 million units, the lowest level in over 25 years.
Given continued sluggish economic growth and persistent high unemployment, we expect a gradual recovery in vehicle sales over the next three years. Sales in 2011 will not accelerate until later in the year, finishing in the range of 13 million. Accenture forecasts that market shares in the near term will likely stabilize in two discrete ranges, after going through pronounced shifts earlier this decade. Market shares for GM, Ford, and Toyota will stabilize in the 15-18 percent range, while those for Chrysler, Honda, and Nissan will stabilize between 8 and 10 percent.
In the short term, original equipment manufacturers (OEMs) will benefit from positive pricing as they hold the line on damaging incentive spend, and from consumers selecting richer option packages in models launched this year. But to sustain growth in share and profits after new products have been launched, they will have to look for ways to improve the return on marketing spend.
The proliferation of data and ever more powerful computing technologies to crunch the data are propelling analytics to a more prominent role in automotive marketing and warranty management. But technology is just part of the story. Data becomes valuable only after it’s shaped into insights, which then inform the decisions and processes that lead to better outcomes.
Fortunately, marketing and warranty leaders with ambitions to compete through analytics have an opportunity now to get ahead of competitors. No doubt this may require more effort at first, more sponsorship from the senior ranks and buy-in from more people. Yet the results, whether in sales growth, return on marketing investment, customer loyalty, dealership traffic, warranty costs or other measures of value, make the effort worthwhile.
May 17, 2011
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