With the launch of its four-door, four-seat Panamera sports car last October, not only did Porsche Cars North America enter an all-new segment; it also did all kinds of marketing it might never have done for a typical Porsche launch.
The German automaker is back on TV again after a hiatus of nearly two years, and it used direct mail to lure potential buyers before the car was even on the street. With the use of direct mail, Porsche received 100,000 leads before the Panamera was on sale. A year later, the car is the hottest Porsche model in North America, even outpacing the Cayenne SUV.
The marketing is the doing of David Pryor, Porsche Cars North America's vice president of marketing. Pryor, 36, has been with Porsche in the United States since 1998. He has been in his current job since 2007 and before that was head of product planning for North America. Pryor also ran Porsche's planning and budgeting group. He came to the automaker from Deloitte Consulting.
Pryor was interviewed by Staff Reporter Diana T. Kurylko.
What did Porsche do differently to launch the Panamera -- your first four-door and four-seat car?
Our strategy with the Panamera was to bring new customers into the brand. We knew we had this passionate group of insiders who knew all about Porsche and were intense loyalists to our brand. We also wanted to bring in this group of outsiders. They weren't part of the broad automotive or even the luxury market. They were true driving enthusiasts who, for a number of reasons, had not considered a Porsche before.
What did you do?
More than a year out from launch, we started an intense direct-mail campaign using our own database as well as external providers -- to start a conversation with these automotive enthusiasts. We used it as a method to generate leads, and by the time we were ready to launch the Panamera, we had 100,000 leads.
All direct mail?
Primarily through direct mail. We used the Internet a little bit. When we got to the launch and a few months before, we started with a traditional media campaign. We produced a TV spot called "The Family Tree."
Porsche hasn't used TV for a long time.
We had not done it for a year and a half or two years. We had done TV for the Cayenne GTS and before that for the launch of the Cayenne SUV. We typically do it for a major launch.
Why a family tree?
We have this great history with Porsche vehicles. In the spot you see these old cars driving, and they start to peel off away from the camera. You see some of our race cars in there as well. Then you see the Panamera weave through these cars. From an overhead helicopter you see the cars are drawing a family tree, and the Panamera is the newest car on that Porsche family tree.
We took that concept from TV, and we pushed it out into print, and we built a microsite around the family tree. We built a social media platform around it.
What is Porsche doing differently in the current recessionary climate? Do you have to spend more to sell more?
To get short-term sales, you have to spend a little bit more. At the core of it, we do not want to change who we are as a brand. The majority of our marketing is driven by launches or new product.
We are starting to see a light at the end of the tunnel. During the low point, we had to re-evaluate how we were going to market. We supported product and our dealers with some retail messaging that would support the sales offers we had in the market at the time. We tried to make that as true to the brand as possible. You will not see Porsche doing a cash-off type of advertising; but with interest rates as low as they were, we were able to offer some attractive financing. And because of Porsche's strong residual values, we were able to offer some strong lease rates as well.
So the increase in marketing was on the local level through dealers?
Yes. We have a dealer marketing co-op program, and the dealers took full advantage of that and helped us on the local level. We did a lot of local and regional event marketing. When our co-op program started four years ago, it was more traditional marketing. What we have seen over the last few years is that the mix has shifted fairly dramatically toward event marketing, one-to-one direct mail and online. With the size of the budget that we have, you can be a lot more efficient with one-to-one marketing.
How much do dealers pitch in, and do you match it?
It is a 50-50 cost share. It is not an advertising group where they pay into a fund. We set the fund. When dealers spend the money on marketing that meets our standards, we reimburse them at a 50 percent rate.
Up to what?
We have a fixed number that we budget per car and depending on what is the priority. It's a couple hundred dollars a vehicle.
How are you spending less and refocusing?
We spent a little bit less during the decline; we shifted it more to retail. That was also a time when we did not have major launches. Now that we have the Panamera and the new Cayenne launching this year, we are back up to the levels that we were before the crisis. The new Cayenne S and Turbo went on sale in June. We have the V-6 coming up in September and the S hybrid in November.
Porsche did what your executives swore would never happen -- used incentives. How do you advertise the deal without tarnishing your premium image?
When we go to market with a retail message, we base it on the brand value and use the angle of affordability. A lot of people have been dreaming about owning a Porsche. We don't hide the APR in the message at the bottom of the ad. We tell people there is an offer out there and that they need to go see their dealer. We leave this to the dealers as much as we can. There is a line we won't cross. We would never want an ad to look like a distress sale.
Is Porsche using the Internet and social media more -- and how?
We are using social media -- that is the buzzword in marketing. What we have done is to keep the conversation going online. We are also involved in Facebook -- we have over 700,000 fans on our site. Through the press department, we have a Twitter account, and it is something we keep active.
Our strategy with social media is we have such a great story to tell with this brand. We have so much history; we have a lot of exciting new product and technology. We have motorsports. It is really about providing content through social media. When we put out a video, it goes viral immediately and filters out to the blogs and the forums.
You changed advertising agencies a few years ago. What have they brought to the table?
We have been using Cramer-Krasselt in Chicago since 2007. The biggest challenge we gave them was the Panamera launch. We knew it would change the makeup of our company. They brought the idea of the insider/outside strategy and honed it to the sharp edge better than anyone had done. They brought us new ideas on how we would go to market.
In terms of what?
The Cayenne, like the Panamera, brings a lot of new buyers to the Porsche brand, so the message tends to be a little different and focuses on the virtues of our engineering and technology and what the Cayenne can do for you in terms of a driving experience.
What are you doing differently for the second generation of the Cayenne SUV?
The campaign has launched. We did not start on the same scale as the Panamera, but we started early with a direct-mail campaign and generated 20,000 new leads. We are on TV, the Internet and print -- a lot of the same places we are with Panamera. The buyer profile is not that different from Panamera.
How will you market the hybrid Cayenne and hybrid Panamera?
We have three campaigns in the market now: the new Cayenne, the Panamera V-6 -- a model line extension -- and the third is Porsche Intelligent Performance. We announced this in Geneva when the 918 Spyder was unveiled. That is the theme for Porsche going toward the future. There are three cars under that umbrella: the 918 Spyder, the GT3R hybrid race car that made its debut at Road Atlanta, and the production Cayenne S hybrid -- and next year the Panamera hybrid.