Auto Industry Misses The Mark On Tracking Demand Gen Signals

Published: November 11, 2008

“It was tantamount to a natural disaster,” he said.

I have no doubt that Pipas is a smart, capable guy. He has been running Ford’s economic analysis’s team since 1997, and has worked at Ford since 1976. But in an age where demand tracking, demand generation and fact-based marketing is so advanced, his quote is way off the mark. Auto companies should not and could not have been surprised by September’s sales. They should have seen this downturn coming last year, and now they need to recalibrate their demand and lead gen efforts to the new reality of a need vs. want based economy. This was not some kind of hurricane whipped up by unforeseen natural forces. This was about communication with dealers and flat-lined interest from consumers.

Both of which are readily available. It is very tempting and even understandable to write off the auto business as a victim of tough credit and scarce capital. It is more useful however, to look at the tools available to predict demand. It comes down to understanding the difference and nuances between demand tracking and demand generation. Companies have become very skilled at demand tracking, but they don’t have the agility to react to it. In terms of demand generation, the skill set needs a bit more torque.

Demand generation requires an auto company to align sales, marketing, operations, finance, executive suites, and media toward exactly that concept. They need to know the hot buttons for generating demand among its dealer base. They need to know how that dealer base is generating demand among consumers and how they can assist that process. They need to know from dealers how the financing process can generate demand. They need to know how the lame state of car ads on TV can do better job by the yardstick of demand generation. The companies that survive and thrive will need to measure that need and more importantly meet it.

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Flat numbers won’t work. Numbers we have. Insight is rare. I hate to pick on Ford, but here’s another example of how they are just not as dialed in as they need to be. An October 6 interview in Fortune magazine explored some of the carmakers more tangible options in the wake of this year’s sales plunge. One of the possibilities is introducing a popular overseas model Ford has not introduced to the US market called the Ka. It is smaller than even the Ford Focus, and would compete with the Toyota Yaris. But the company has not yet gauged demand for this product. Its hesitance is based on data or insight but on the unknown. Will Americans buy an even smaller car than the Focus?

“Are people willing to go smaller than that?” asked Ford spokesman Said Deep. “That’s a big unknown, and I think that’s what’s got to be determined.”

Inexcusable. It should have been determined already. The auto industry has the tools to make that answer unacceptable. It has become expert at interpreting the data in its rearview mirror. But that view out of the windshield and the direction down the road, that is a problem.

Posted in: Demanding Views

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