Why auto-retailers need to rev up the ‘ratchet’

ratchet marketing

Auto-retailers have been among the hardest hit by the global pandemic and need to rip up the playbook and focus on relationships that last. 

So says Lawrence Dodds, Client Director at UM London, who suggests that ratchet marketing may offer a route towards recovery…

Dodds: Explores how carmakers need to seize opportunties amid a pandemic.

As economic uncertainty looms once again, driven by rising Coronavirus cases in the UK and Europe, consumer confidence has started to have a clear effect on the sale of big-ticket items.

These sales have dropped so significantly that credit card expenditure has also dropped, as consumers are instead making smaller purchases on debit cards. This is certainly more pronounced in the auto industry where sales remain sluggish.

UK new car sales dropped in September to the lowest level this century. This represented a drop of almost 16% lower than the average number for September recorded over the last decade.

It is tough to see a way out of the problem for an industry where marketing focus has moved from long-term or mid-term, to a very short-term view.

Every pound of investment has to return in year and in some cases during the quarter of investment. Short-term return on investment is important, but in an effort to drive short-term value, marketeers are losing sight of the mid-term opportunities that could drive growth amidst tough market conditions.

Ratchet marketing

A dramatic shift is needed if auto retailers are going to obtain growth in these tough market conditions. Ratchet marketing offers an opportunity for marketeers to overcome immediate cost barriers that are getting in the way.

The focus shifts to finding an entry point for the consumer and then ratcheting up the relationship through cross sell and even incremental features.

Auto dreams: Retailers should deploy ratchet marketing strategies to build relationship and cross-selling opps.

Single customer view

Ratchet marketing can only really be delivered through a strong understanding of current consumers. It has never been more important to have a strong unified single customer view.

With cookies on the way out, auto-retailers need to prioritise the collection of persistent data (zero party data) and ensure that powerful marketing technology (customer data platforms) are in place to join the dots.

Each touchpoint should build a better picture of the user and harness intent signals given off by consumer actions.

Furthermore, auto retailers can work with their agency partners to further enrich this data in a variety of ways, to understand more about a consumer.

Individual consumers can be matched to a wide array of datasets to understand more about the wider behaviour of an audience.

Agency holding companies have invested significantly in their data offerings such as IPG’s acquisition of Acxiom for $2.3 billion in 2018.

Through a persistent unified ID, auto retailers can better personalise their services. Landing pages can be customised not just to show the right product, but also the right financial incentives and payment plans.

Data can be enriched to understand if the consumer has a family and thus is more likely to respond to an SUV.

SUV: Buyers could be offered branded accessories by retailers.

If they are a current customer and have bought an SUV in the last month, why not show the branded accessories for that car.

Existing customers can be better leveraged and kept in brand as the natural lifecycle of their existing purchases progresses.

Advertisers should look to build decision trees that respond to consumer contact and bring together all touch points; including website, in app, email and even push notifications to ratchet up the relationship.


Product-as-a service has been around for a while within IT and technology communities. Customers will purchase a product based on the service it provides, rather than the product itself.

Many exciting features are often offered as expensive add-ons when purchasing a car. While features are expensive to develop, they are often less costly to manufacture.

At the same time, IOT technology in cars has expanded to such a degree that many new cars already connect to the internet for updates, and to provide additional services.

Product-as-a-service offers an opportunity for services to be turned on and off remotely. BMW has been experimenting in this area with its new BMW digital key service allowing features to be disabled and enabled remotely.

Tesla has also allowed over the air updates to be made for a while, remotely adding capabilities. Auto manufacturers could use this system to lower the cost of the initial product and up-sell the incremental services over the product lifecycle, all while capturing consumer data.

Tesla: Allows over the air updates, remotely adding capabilities.

The future is bright for auto retailers who are able to collect persistent data on consumers and use it to fuel personalised consumer journeys pre and post purchase.

Times have changed and product-as-a-service is the perfect opportunity for retailers to ratchet up their relationship with consumers and move away from a short-term view to a longer, more fruitful one.