The Chevy Volt's Marketing Challenge

I’m sure the resident anti-GM-bias patrol won’t look kindly upon this double-dose of Volt skepticism, but at the point that GM’s Volt production is ramped up well above its sales rate, we should be paying attention to what GM is saying about the challenge of marketing the Volt. Automotive News [sub] reports that it’s still too early to compare Volt and Nissan Leaf deliveries in terms of a competition, arguing

Chevrolet and Nissan are still selling to early adopters and green enthusiasts and will be for most of the coming year. Their real challenge is to learn how to market the high-profile cars to mainstream U.S. consumers in mass-production volumes in 2012 and beyond.

To prepare for that, both automakers are using 2011 as a sort of practice year, taking notes, tinkering with tactics and honing their marketing messages.

And according to GM sources, there’s a lot of honing to do…

“We’ve learned that this product is a different experience,” says Cristi Landy, the Volt’s product marketing manager at GM. “No customer who buys this vehicle is replacing a vehicle that was anything like it. So it’s new for the customers; it’s new for us.

“And we’ve also learned that it is confusing to people.”

What that means for the marketing mission, Landy adds, is that “we have two issues: There’s marketing to the people who are going to buy it, and then there’s marketing to people who just want to know about it.”

And we’re starting to see that confusion show up in Chevy’s ads for the Volt. The pair of ads above started running about two weeks ago, and they exhibit the confusion that Chevy was inevitably going to have to confront (and seem to be a response to this Nissan ad). After all, we saw the first signs of trouble in this respect within days of its launch, when controversy arose about exactly how efficient a Volt really is. Our take: the Volt is as efficient as you want it to be (or as your lifestyle allows). But the truth, in this case, doesn’t make the marketing any easier. Nor does the fact that the Volt wasn’t designed for maximum efficiency per se, but rather to give consumers a typical day’s driving worth of electric range and then gas power thereafter. This design brief was certainly innovative, but it forces marketers to ask consumers to think of their vehicles in a fundamentally new way, which causes “confusion.”

When I met with Bob Lutz, this issue was at the top of my “questions to ask list,” so I asked him: do you think [the Volt’s eco-halo effect on the Chevy brand] is mitigated by the fact that it’s such a complex machine, and that things like measuring its efficiency on an apples-to-apples basis is very difficult? Do you think [this complexity] creates a mixed message? He answered:

Yeah, even internally some people were bringing up that argument, saying we’d be far better off doing a conventional hybrid. And I said “look, the issue here is that people want to drive 40 miles electrically.” They said “yes, but once they’re on the gasoline engine…” and I said “will you stop saying that? That’s not what this is about. The Volt buyers are going to feel as if they’ve made some sort of mistake if they’re on gasoline, or if they’ve made an especially long trip…” But that’s the beauty of the Volt, is that it gives you that flexibility. But for most people, most of the time, it’s a pure EV.

That’s the way people look at it. They don’t look at it and say “well, if I were to do 500 miles per day, I’d only get 40 miles electric, and the rest would be facing all this added weight, etc.” They just don’t do that. If you look at it through the eyes of the customer, as opposed to through the eyes of the way the EPA measures efficiency (which I think is… strange), the way the customers see it is “I’m getting 40 miles almost for free every single day, and twice a day if I can plug in at work.”

Yeah, it’s counter-intuitive if we had assumed the average Volt buyer would drive 500 miles per day. [If that were the case], I’d have agreed with the engineers [who advocated for max efficiency rather than the extended-range electric configuration] and said “stupid solution, we need to do something else.” But we know that average Americans drive 40 miles per day or less, and the car is for them. [The engineers] were looking at a usage cycle that’s hypothetical, rather than a usage cycle that’s real… and I was focusing on the real customers’ usage cycle, which is going to be predominantly electric. It’s like… and airplane engineer will tell you “you know, we can make this fighter plane much more efficient if we don’t add all the weight and complexity of an ejection seat, and I can prove to you that this airplane will be superior in combat… so let’s leave all that ‘needless complexity’ out of it.” Yes, but… good luck finding someone to fly it.

As the father of the Volt, Lutz knows all the arguments for going with the extended-range model… but whether his logic resonates with consumers is an entirely different question. After all, from his perspective, it’s just a matter of “seeing things through the eyes of the consumer.” Meanwhile, the majority of actual consumers still need to understand why a second car isn’t a better choice than the Volt’s range-extending hardware (after all, how many households with a $40k car in the garage have only one car?). And if you believe you’ll use your Volt almost exclusively on electric power, as Lutz thinks most consumers will, why not buy the cheaper Nissan Leaf with a 70-mile pure-electric range? Especially when Nissan has an interesting approach to apples-to-apples efficiency comparisons. GM’s marketing team is only just scratching the surface of its Volt challenge, and as production ramps up, the pressure to find buyers will only increase.

In the meantime, here’s what the Volt marketing team seems to have learned thus far:

• The Volt is skewing toward more of a luxury customer, often with a luxury trade-in.

• Volt owners are environmentally conscious but moderately so. They mainly like the idea of not buying foreign oil, Landy says.

• Once they own the car, customers’ impression of it changes. Instead of describing it as an environmental purchase, they describe it as “fun to drive.” Joel Ewanick, GM’s head of global marketing, recently commented that the Volt’s marketing must sell the vehicle as a car first — meaning as a product that appeals for the same reasons that any other GM model appeals.

• In order to sell Volts, dealers need a demo car. That wasn’t part of the plan. For that reason, GM is goosing production for the next few weeks to make sure all 2,600 participating Chevrolet dealers have at least one demo.

• Even as it focuses on the Volt as fun to drive, Chevrolet also has to educate consumers. According to Landy, future advertising will focus on how the Volt differs from other vehicles.

“When you try to explain the Volt to people on just a piece of paper or with a few quick words on a screen, they don’t necessarily get it,” she says. “You have to remember that most consumers have still never driven a hybrid.”

• Volt owners enjoy talking about their ownership experience with prospective buyers, and prospective buyers seem to enjoy hearing from current owners. Chevrolet hopes to tap into that consumer-to-consumer communication in future marketing.