Feature

Lexus embarks on a digital journey

LONDON - The challenge for the luxury car marque's small marketing team is how best to inject digital into a brand with a mature customer profile.

Matt Button spends much of his spare time in his recording studio, composing music. He says he sees a clear link between his music and his business - selling cars.

"There are some principles you can apply to both," he says. "I have quite a sophisticated studio and some great kit. But I don't know how most of it works. I'm focused on the outcome. I say: 'Why not try this? Let's route this through here and put that channel on."

He has become similarly experimental in his role as CRM and database chief of luxury car marque Lexus. In July, he ended a seven-year relationship with Partners Andrews Aldridge - the agency's data arm Fuel retains the Lexus business - and hired Kitcatt Nohr Alexander Shaw in its place.

Kitcatt Nohr founding members

Button has good reason to be more reliant than most marketers on his agencies CHI & Partners, digital agency Amaze and now Kitcatt Nohr. Reporting to Lexus' national marketing manager Julian Lea, Button has just one more junior member of staff working with him. The lack of headcount is compensated by a budget of about £5m.

The brief to Kitcatt Nohr is notable for its strong digital element and a desire to inject new creativity into a brand that has an older customer profile. The more famous advocates of Lexus' eco-friendly hybrid range - Sainsbury's boss Justin King, Tory leader David Cameron and Sir Paul McCartney are known to drive Lexus hybrids - are reflective of the brand's more mature image.

Yet, Button sounds a note of caution: while it can be tempting to design creative to appeal to a young, fashion-conscious crowd, the brand has worked hard to build up a reputation as a 'hybrid, intelligent choice'.

"Our customer base is generally over 50," he says. "You have to ask: 'Are they blogging? Are they interested in communication online?' And you have to be guided by the customer, rather than forcing them down a particular path. Historically, automotives have been too much about 'push' rather than 'pull'."

These are definitely tough times for car makers. Figures from the Society of Motor Manufacturers and Traders (SMMT) show the UK's new car market fell by as much as 13 per cent in July this year, as the impact of the credit crunch, a weaker housing market and high inflation are starting to be felt. Button takes comfort in the fact that he's not alone: "The next few months are going to be very, very challenging; no one is having a good time."

In the year-to-date, Lexus has had a share of the UK car market of 0.48 per cent - down from 0.61 per cent last year. Yet competitors Audi, Mercedes Benz and BMW are enjoying increases in market share, according to the SMMT, of 2.15 per cent, 3.6 per cent and 11.79 per cent respectively.

It would be fair to assume this represents a call to action for Button. The dual focus of his role, which spans direct and digital marketing, should stand him in good stead.

Rick Curtis, head of strategy at Amaze, which works with Lexus on its websites across Europe, believes Button is well-versed in what he calls "the changing nature of response", where the customer calls the shots.

Button appreciates that digital channels should be about fostering relationships, with the Lexus website being the final destination prior to that all-important test drive. Amaze is linking web analytics and CRM to track and understand individual behaviour, rather than taking an aggregate approach.

Over the coming months, there will be an increased focus on personalisation and targeting using tailored brand images on the website, drilling down to unique customer journeys. The aim is to make the marketing more relevant to an individual's priorities - whether that be technology, safety or design - when deciding which car model to buy.

Such emphasis on what could be termed "the human touch" is important for a luxury brand with a customer and prospect base of about half a million people in the UK. Button is careful to foster a "service-minded" approach in Lexus' CRM work, to reflect the brand's premium values.

Lexus shares a common philosophy with its parent company Toyota, which can be summed up by the Japanese concept 'kaizen', meaning a continuous quest for improvement. But whereas Toyota applies this notion to the volume market, at Lexus it's about building a premium brand.

As CRM and database manager for the UK, Button must liaise with centralised functions in Europe or further afield. "It's always a struggle when part of your planning and communications comes from a centralised resource," he says.

Lexus also operates within the constraints of a pan-European website on which individual country sites are based. "This can represent a challenge," admits Button. "You're wedded to a technology infrastructure designed to support lots of content in a variety of languages. But the important thing is to know what you want to do with data and tracking."

Digital channels have empowered consumers to research and enjoy shopping around for a new car. With many websites, forums and blogs, Button believes his job is to understand how each of the channels work. "The idea that there's some kind of linear purchase funnel is pretty old-style thinking," he says.

Just as Button and his agencies are working hard to create satisfying online journeys for customers, it's clear that Button himself has travelled far. While luxury cars may not be the first thing on everyone's mind at the moment, with a new agency on board he's working hard to get the Lexus message heard.

ANATOMY OF A PITCH

The line up

The short-list for the Lexus account was Kitcatt Nohr Alexander Shaw, Archibald Ingall Stretton and Partners Andrews Aldridge. The pitch, organised by Agency Insight, took place in July.

The process

The aim, initially, was to divide the brief into direct mail, digital and data elements, but at the shortlist stage Lexus opted for an integrated approach. The agencies had four weeks to prepare their presentations. Q&As and work-in-progress sessions took place throughout the period, to ensure the agencies had the information they needed.

The verdict

Kitcatt Nohr was awarded the account, with Fuel, Partner's specialist database arm, retaining the data brief. Button was impressed by the agency's strategic thinking. "They showed a good understanding of the market, how it's changing, how consumers are changing, and how insights drive creative strategy."

BUTTON ON ...

Ad networks: "They can be very effective at driving short-term response, but essentially you're buying an audience and you're not sure on which sites they'll be placed. I use them for tactical response campaigns where we have very clear objectives."

Search: "We're using a 'test and learn' approach - applying different clusters of keywords with various levels of priority. With search, we're able to understand the level and cost of response in real time and it can be effective in capturing people at a certain stage, such as generic searches for a hybrid car."

Rich media: "You must use such elements only if they bring to life what you have to say in a relevant and engaging way."

Microsites: "Microsites are expensive, so you have to ask yourself: 'When's it worth it?' A microsite is a cut-down version of your website, so it needs clear navigation and site architecture. The same rule applies with both: enable people to get what they want quickly."

POWER POINTS

- Lexus wants to inject new creativity into a brand that has an older customer profile;

- The UK's new car market fell by 13 per cent this year.