Executive summary
The automotive industry is facing a major period of transformation, including automation and electrification. The digitalization of customer purchasing behaviors and the entry of foreign companies are intensifying competition. Inside this environment, Subaru is increasing its sales numbers by integrating various data scattered across departments and dealerships within the company and utilizing them for marketing and advertising. By introducing Treasure Data Customer Data Platform (CDP), Subaru has realized a data-driven marketing strategy across the whole company. We asked Mr. Atsushi Yasumuro, Chief of the Marketing Promotion Department, Advertising Division, at Subaru’s Domestic Sales Headquarters, about their initiatives.
Key points of this case study
- Utilized Treasure Data CDP for company-wide data integration, analyzing customer purchasing behavior, and realizing sales expansion.
- Achieved a 14.5x increase in advertising efficiency through the use of CDP for hypothesis testing and verification.
- Improved ROI with 1:1 marketing by utilizing scenario features
Challenge: How to make customers want to buy?
Since its founding, Subaru has prioritized safety. This philosophy is carried over into its car manufacturing, including the world’s first driver assistance system using stereo cameras, “EyeSight,” and other technology focused on safety and security, which has been highly praised worldwide.
On the other hand, Mr. Atsushi Yasumuro says, “Marketing in the automotive industry has become quite difficult these days, and marketing strategies cannot be realized without understanding the customers.”
“Recent cars are less likely to break down, resulting in a much longer replacement frequency of around once every ten years. Additionally, in a mature market where the population is declining, and the price of vehicles is increasing, competition is fierce not only domestically but also with foreign companies.”
“Manufacturers are fiercely competing.”
With the spread of the internet and the progression of digitalization, the touchpoints with customers have changed significantly.
“There are hardly any customers who consider purchasing without doing preliminary research on the internet. The number of visits to dealers has drastically decreased to two times or less. I call it ‘the invisible tournament’. By the time customers visit the dealership, the outcome is almost decided. Subaru has to be among the brands in the evoked set that customers consider buying, and furthermore, it has to survive the competition. To do this, understanding our customers becomes extremely important, and we thought of creating a data foundation that could respond to this.”
What kind of data sources were integrated?
“The data sources range across online, offline, and various areas. Data owned not only by several departments within the company but also by external dealers was integrated.”
Specifically, this includes behavioral logs from various websites, online shops, subscriptions, online negotiations, as well as information from core systems such as customer information entered by dealers, Wi-Fi logs at stores, test drive event logs, campaign logs, etc. Other data acquisitions include catalog requests, survey responses, data from a smartphone app for owners named “My Subaru,” and activity logs from the driving app “SUBAROAD.” Many types of data are being acquired.
“By linking these various data to a single ID named ‘SUBARU ID,’ we keep in touch with our customers,” says Mr. Yasumuro. Even if the car replacement cycle is once every ten years, maintaining touchpoints during that period allows for understanding the customer journey and aims to increase LTV (Lifetime Value).
To make group-wide data integration possible, Subaru chose Treasure Data.
Treasure Data CDP was selected primarily for its ease of data integration. Even though data integration is straightforward to say, there exists a wide variety of data in many places, including external dealers and advertising agencies. At the time, each piece of data was stored separately, and even just integrating it into “SUBARU ID” was challenging. However, with Treasure Data CDP, it is possible to collect and integrate data seamlessly without impacting the dealer’s core systems or other tools.
Mr. Yasumuro also speaks highly of Treasure Data’s support system. “Back then, Treasure Data was a young venture company established by three Japanese people in Silicon Valley. Its headquarters is in the United States, but the support of the Japanese corporation was thoughtful, and they supported us as one team. Their passion for understanding what we wanted to do and responding quickly was very reassuring.”
Analyzing customer purchasing behavior to achieve a 14.5X advertising improvement
What results have been achieved through company-wide data integration utilizing the Treasure Data CDP?
“It has been nearly 10 years since the implementation, and many departments are seeing results. Among them, the effects are most quantitatively understandable with TV commercials. Generally, the price of commercial slots is determined by the viewership, but by using Treasure Data CDP, it has been clarified which slot and what kind of creative work will generate what kind of response. In other words, there are slots and creative works that get a good response even with low ratings, and conversely, there are slots and creative works that don’t get good responses even with high ratings. As a result, it has become possible to judge which slot and what kind of creative works will yield a high ROI (return on investment). As a result, with the same amount of money, the effect has become 14.5 times higher,” says Mr. Amuro.
New initiatives have also begun. It is the calculation of the probability of closing using AI (artificial intelligence) and lead information.
“This mechanism explores the so-called ‘hotness’ level (prospect and certainty of a case) to judge with AI which customers among the many potential customers have a high probability of purchase. Customers who download catalogs or participate in events are asked to register and are assigned a SUBARU ID. Comparing with the data accumulated thus far, members who have performed actions most similar to those of customers who have made purchases are classified as A, those who have performed the second most similar actions as B, and the third as C, and they are sent to the dealers. This also makes it possible to proactively address customers’ interests and concerns in advance.”
The actual results are evident as well. “As data accumulates, the precision of our assessments has improved. Customers with a prospect rating of ‘A’ end up placing orders about 50% of the time. We’ve also received feedback from dealerships that negotiations are proceeding more smoothly,” Mr. Amuro says. Not only has this enhanced the efficiency of negotiations, but it has also led to an improvement in customer satisfaction.
What’s important is to continuously hypothesize and verify
By leveraging Treasure Data CDP, insights into how commercials and events affect subsequent customer actions and why are also becoming clear. For example, the effectiveness of TV commercials can be quantitatively measured, which might sometimes negate the value of traditional creative endeavors.
“By everyone pointing in the direction of the customer and dialoguing in a common language based on the data, improvements can be made. It’s important to hypothesize, implement, check, and adjust,” Mr. Amuro says. The company has recently produced many successful TV commercials targeting women that emphasize safety, but that success came from continuously hypothesizing and validating.
Despite Subaru’s prominence in customer-oriented, data-driven marketing, Mr. Amuro suggests, “Any company can undertake this. It doesn’t have to be something grand; starting small and cycling through our process is crucial. Why not take the first step?”
Utilize scenario features to realize 1:1 marketing
Treasure Data Customer Journey Orchestration integrates marketing activities from the customer’s perspective and is a powerful function to provide consistent customer experiences across multiple channels. Marketers can use this to connect touchpoints and design and manage customer journeys based on customer behavior and needs. For example, it’s possible to comprehensively analyze interactions with customers across multiple channels such as email, social media, and websites, and deliver the right message at the optimal time. This goes beyond mere campaign measures to realize personalized experiences tailored to customers’ purchasing behaviors and interests.
Previously, Subaru had implemented a scenario feature of another marketing automation tool. However, the operation required a high level of expertise, making it difficult to manage internally, and it did not achieve the expected results initially. As a result, that tool did not lead to an expansion in the number of policy measures implemented. Afterwards, by introducing Treasure Data Customer Journey Orchestration, Subaru is now able to build and operate scenarios in-house, making it possible to execute new strategies using scenarios that had not been tackled before.
As a concrete measure, Subaru implemented scenarios individually optimized for both Subaru car owners and owners of other companies’ cars. This initiative confirmed improvements in campaign application rates. Furthermore, content that encourages store visits and in-store quotes has also been provided according to the customer’s situation, leading to guided actions. Content targeted at negotiators whose orders have not yet been confirmed has also been delivered, backing up the ordering process. This greatly improved ROI.
Before, the integration and analysis of complex customer data were necessary, but with the use of Journey Orchestration, it is now possible to quickly build personalized scenarios based on customer behavior. Going forward, Subaru plans to accelerate further initiatives using cross-channel usability and enhance communication with customers.
The evolution of Subaru’s marketing continues to be an exciting watch.
