Building Brand Awareness, Brand Authority & Educating the Market is most cost effectively done through great Thought Leadership Content & PR
Why an entrepreneurial innovator chose to stimulate demand for his automotive market solution with strong PR & thought leadership content, years before he began advertising. And how the strategy reaped dividends for his business through acquisition and well beyond.
As a PR consultant, I expect most clients to come and go within three years. We help them build their brand awareness; increase engagement with the market(s) they serve; grow to hit a revenue target; get acquired; or (more rarely today) list on a stock exchange. Then personnel and priorities change.
However, over the last few months, I’ve decided to conduct a series of interviews with the clients that stayed with my agency Agility PR well beyond that average, in this case for more than 12 years.
I wanted to find out why they stuck with our brand of thought leadership campaigning aimed at raising awareness of their offerings; educating the target market(s) about the merits of their products and services; and helping them prove domain expertise and gain authority to speak to decision-makers in the markets where they sell their products and services. I wanted to find out what attracted them to us in the first place and what made them stick with Agility PR, in this case right through the Great Recession of 2009-2013.
This interview was with an old friend and long-term client Paul Smith, now Director of Traka Automotive which is the leading provider of electronic key management to the car dealership world in the UK and Ireland.
He is currently spearheading Traka Automotive’s growth in Europe and the APAC and MEA regions. He founded and built a key management solution business called eTag Solutions from scratch. Within 10 years in 2014 it was acquired by ASSA ABLOY – becoming Traka Automotive.
Q1. Why did you elect to buy into PR to grow your presence in the automotive/car dealership market so early in the development of eTag?
When we started working with Agility PR back in 2008, we were right at the beginning of our product’s lifecycle in the UK. We had to create the market, create demand from zero. No one knew our offering existed, never mind whether it could help their business grow.
Electronic key management, which was already in widespread use in the States by then, was barely heard of over here. The larger dealers generally used mechanical Peg in Peg Out (PIPO) style key management systems or kept customers’ car keys in a grubby draw in the workshop. So, we had to educate the market about the merits of going electronic. We also had to build awareness that we were there when that first wave of innovators were ready to buy.
And we were boot strapping the business. We didn’t need VC funding because early on we won a couple of major clients, most notably Mercedes-Benz Retail. Their business helped fund iterative improvement of our software. However, our funding model meant there was no large marketing budget to help us stoke demand. Furthermore, we weren’t convinced advertising would be effective either.
“We knew that on a scale of 0 to 10 where 0 is ‘Don’t know the brand’, ‘Know nothing about the product’ and ‘have no perceived need or budget for it’, we were hovering between 0 and 1. We had to create that interest in the product and build the market for it.
“We also knew that the car dealership world is a sellers’ nightmare because there are so many people trying to sell so many different products and solutions to dealership and workshop managers. Therefore, advertising was never going to work. It just would not have cut through quickly enough to create demand and would have been far too expensive given the scale of the communication job we had on our hands.
Building Brand Authority
“First and foremost, we had to convince the market we knew what we were talking about – i.e., we understood the pressures and dynamics in the car dealership world. We also wanted to build our reputation as reliable people. I was not trying to desperately sell at that point. it was more about educating the market – planting the seeds and spreading the word about our systems’ merits. This is where Agility PR’s services came to the fore back in late 2008.
“Really it was about finding resonance with some of those innovators in the market who were likely to be amongst eTag’s first buyers. We had to invest in building the market out.
“The other problem we had was that we could not trade too heavily off those early customers like BMW and Mercedes Benz Retail. We knew they would not like to be used in that way because, first and foremost, this was a car key security product. In that sense it was sensitive. We were not able to ask Agility PR to write and promote those early case studies.
Power of Word of Mouth
However, what did work in our favour to spread the word was dealerships’ typical employee turnover which was 20-30 per cent per annum. This meant that our early customers and hot prospects became advocates for us as they moved within and between the prestige brand dealership networks. So that by mid-2009, we had 40 per cent of the Mercedes-Benz network and 30 per cent of the BMW network in the UK. Customers included Porsche Retail Group, Mercedes-Benz Retail, BMW Park Lane, and Sytner Group.
Word of mouth was doing a wonderful job for us. So really all we needed to do was reinforce our key messages and nurture our reputation to keep things moving in the right direction. We could not afford to blast out adverts saying ‘buy our product now’ as it not only would have been beyond our budget but also it would have failed to educate the market about the multiple value-adds our solution was delivering to customers once they had it in full use across all parts of their business.
In those early days, people came to us to improve their security of car keys. It was only later that the productivity improvements, which came with being able to track and identify who had each set of keys across a dealership, were being actively promoted, again working closely with Agility PR.
Q2. When we started working with you, you had sales of less than £200,000 and your marketing budget was extremely tight, yet you stuck with it right through the Great Recession (2009-2013) and out the other side. Why was that? What were you getting out of it which justified your PR spend which even then was around £10,000 per year?
We were lucky in that the nature of our solution was that the most well-resourced and ambitious dealer groups were the ones that understood not only the additional security benefits but also the productivity gains from being able to lay your hands on a set of keys in 1 or 2 minutes rather than, on average, about 10 times longer than that.
The PR needed to reinforce that message but essentially the Top 10 dealership groups which we were talking to, all saw strong growth right through that Recession. They were still taking long term bets on the continued growth of the market, partially-fuelled by the increased penetration of PCPs which made prestige vehicles more affordable for many more people. These groups were expanding, renovating sites, and building new ones right through that period. This growth helped fuel our growth as infrastructure investment was fertile territory in which to discuss electronic key management.
We knew the PR that we were doing with you was warming up the market. Our sales lead pool was gradually growing. However, we were worried that if we’d stopped investing in say 2010 we wouldn’t be filling our funnel with fresh prospects. At some point the bucket would run dry.
Crossing the Chasm
We needed to keep investing because we knew that we were slowly spreading the word to a larger and larger pool. Eventually we would be moving from the innovators and early adopter group (perhaps 16% of the overall market), and ‘crossing the chasm’ to reach a much large pool in the early majority (perhaps the next 34%) of the market.
If we got this right, we could be driving that market growth and effectively owning our category. All we needed to ensure was that dealer principals knew the name of eTag and had some information about what we offered, so that when the time was right they would come to us rather than anyone else.
PR helped deliver market education as well as brand awareness and brand authority
This was a building point. I knew that the true benefit would come in between five and 10 years of starting up, before we got into that early majority group. And the only company doing that market education work was us, working with Agility PR.
The only real danger was that a fast follower might come along and benefits from all the market education work that we had been investing in for years. Thankfully, that did not happen because we worked so hard to develop our product and kept very focused on solving dealerships problems. We also continually added value in the client relationship – right from our audit work pre-install, through to the aftercare and free software upgrades. In this way, we created a technology and domain expertise barrier to entry which served us very well as the market for electronic key management grew here.
4 Key Take-Aways which I gleaned from this section of my conversation with Paul Smith of Traka Automotive were:
- If you need to increase Brand Awareness, build Brand Authority and Educate the Market from a near zero level; the most cost effective way of doing that is through sustained PR which includes strong thought leadership content. In start-up mode, you can do a lot with annual marketing budgets as low as £10,000 if you can get your quality of content right. However today you probably need to ensure you also have a strong website with good SEO to showcase all of that content.
- Advertising would have been too expensive for eTag in those early years. Advertising would not have worked well to educate the market about the value of electronic key management software. It’s ability to deliver Brand Authority was also questionable.
- Targeting the top end of your market, in this case the Top 10 car dealership groups, insulates you from the impact of Recessions as the biggest companies are the most well placed to carry on growing and therefore prepared to invest in sources of efficiency.
- Check out Geoffrey A Moore’s famous book called ‘Crossing the Chasm’. His technology adoption cycle first published in the first dot com boom is just as relevant for high tech start ups today as it was back in 1998 when it was first published. Crossing the Chasm marks the moment when you move from penetrating the market of innovators and early adopters (which might be up to 16% of your overall target market) and reach into the much larger mainstream group called the ‘early majority’. Collectively at this point you are reaching nearly 50% of the total market available to you/your product.