Ola K\u00e4llenius of Daimler discusses the high-tech and high-touch marketing of an iconic brand.<\/p>\n
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Ola K\u00e4llenius<\/strong> is a self-confessed \u201ccar guy\u201d who still harkens back to being \u201cthat kid with the dream of driving that Mercedes star.\u201d The Swedish-born K\u00e4llenius joined the then Daimler-Benz AG in a management associate program in 1993, was named executive director of McLaren Automotive in 2003, and became a member of the Divisional Board of Mercedes-Benz Cars, responsible for marketing and sales, in 2013. In January 2015, K\u00e4llenius was appointed to the Board of Management of Daimler AG. At age 45, he is the youngest member on that governing body. In a recent conversation with McKinsey\u2019s Jesko Perrey, K\u00e4llenius shared his views on what\u2019s driving the future of marketing, particularly at the luxury end.<\/p>\n The Quarterly<\/em>:<\/strong> Has marketing changed fundamentally since the first golden age?<\/p>\n Ola K\u00e4llenius:<\/strong> It has become a more challenging game, but I would say that some of the basics are still the same. You need an attitude, a story. You have but two buttons to push\u2014emotion and intelligence, heart and mind.<\/p>\n The Quarterly<\/em>:<\/strong> This suggests that analytics alone won\u2019t supplant traditional storytelling.<\/p>\n Ola K\u00e4llenius:<\/strong> One thing I want to stress, because everyone tends to talk just about the digital side, is that in the world of modern luxury it\u2019s not all digital. It\u2019s human touch. That\u2019s equally important as digital\u2014more important, in a way. Think about other luxury brands, like Herm\u00e8s and Louis Vuitton. Look what they\u2019re doing: they\u2019re building flagship stores that are beautiful, where you actually like to just browse around before you buy. Those are emotional places. So let\u2019s not believe that, even for younger people, this side does not count. It does. At the same time, people want seamless integration between the physical side and the digital side.<\/p>\n The Quarterly<\/em>:<\/strong> What does the digital side allow you to do that you couldn\u2019t do before?<\/p>\n Ola K\u00e4llenius:<\/strong> Here\u2019s one example where big data has actually changed the way we\u2019re doing business: car2go.\u00a0<\/span>We know everything that happens to those cars, 24\/7, around the year. If you start analyzing that data, you can see patterns. You can see, for instance, that between 8:00 and 10:00 in the morning, in different cities, there is a likelihood that somebody picks up a car, drives somewhere, and is in a certain \u201cneighborhood A.\u201d So we can make sure there are more cars in that neighborhood during those hours.<\/p>\n We can also improve the customer experience so there is a one-to-one relationship with the customer. That\u2019s what we do now with \u201cMercedes me,\u201d which allows our customers to have a unique Mercedes ID. This allows seamless integration between your smartphone and your car, and between us and our vehicles. We know, for example, how your brake pads are wearing. That data lets us know when a car needs service even before the customer does, so we can prompt a service appointment.<\/p>\n The Quarterly<\/em>:<\/strong> How important is it for you to connect within the organization\u2014to integrate marketing into product development, for example?<\/p>\n Ola K\u00e4llenius:<\/strong> We have completely reorganized our marketing and sales department instead of having different things in different areas, and have created what we call \u201cbest customer experience.\u201d We bundle the different areas inside our headquarters function, which does the blueprint for the whole customer journey. We now have a steering committee with our telematics people and entertainment people and IT people sitting together because you can\u2019t do marketing well in isolation. You have to have engineering with you, and you have to have IT with you\u2014otherwise it doesn\u2019t work.<\/p>\n The Quarterly<\/em>:<\/strong> How else are you working to provide \u201cbest customer experience\u201d?<\/p>\n Ola K\u00e4llenius:<\/strong> Another way we\u2019re achieving the human touch is building on Apple\u2019s idea of the \u201cproduct genius.\u201d It\u2019s a role, in the retail network, that is not a sales role, so customers don\u2019t have the pressure of the transaction when they speak with this person. We call the role our \u201cproduct concierge.\u201d<\/p>\n The product-concierge role is solely to help our customers understand the product before the sale, after the sale, and after they have left the lot. So if you\u2019ve purchased your new S-Class, the product concierge explains the car to you, and you kind of understand how it works. But now you\u2019ve driven off, and you\u2019re sitting there with the telemetric system, and you forgot how to activate your Mercedes-Benz apps, for instance. You call the product concierge, and he or she will explain it to you.<\/p>\n This is just one example of a role that didn\u2019t exist previously at a car dealer and almost didn\u2019t exist anywhere. We\u2019ve improved the customer experience by eliminating the pressure of the transaction. Hamburg was our pilot for that. Now, we\u2019re training 500 product concierges in China as we speak.<\/p>\n The Quarterly<\/em>:<\/strong> Is this also a response, in part, to the challenge of proliferation? How do you break through the clutter?<\/p>\n Ola K\u00e4llenius:<\/strong> If you look at society as a whole, we all know this, the amount of information that you absorb per day now\u2014compared with, maybe, what you did 10, 30, 50 years ago\u2014is much, much higher. So to grab the attention of the relevant people and drive their buyers\u2019 choice, you have to be really smart about this. This has huge importance, as far as Mercedes is concerned, compared with where we were years ago, when marketing was more just about the product.<\/p>\n Now, to digitize within Mercedes, we have a proof point that we push for connectivity: \u201cMercedes me.\u201d You have to have connectivity, especially for younger people. We offer all kinds of services around the car and beyond, so to speak. The look and feel of our advertising, physical presentation, and stores all need to fit into that world. This is reflected in our \u201cMercedes me\u201d showroom in Hamburg\u2014well, you could call it a showroom, but it\u2019s really not. It\u2019s a restaurant, it\u2019s a happening place where we cooperate with artists and with musicians. It\u2019s the cool place to be for young, successful professionals. They\u2019re working hard all week, and they deserve a treat on the weekends!<\/p>\n The Quarterly<\/em>:<\/strong> Which becomes a key facet of this new golden age, does it not? The better you engage with your customer, the stronger your customer\u2019s experience going forward.<\/p>\n Ola K\u00e4llenius:<\/strong> The founding father of our company called it: \u201cThe best or nothing.\u201d What did he mean when he said that? He was not talking about a product description, per se. He was talking about attitude. You don\u2019t rest on your laurels. You move beyond.<\/p>\n We push the emotional button very consciously across touch points in marketing. And the great thing with Mercedes is that you do have emotional brands. When you buy a Mercedes, it\u2019s always been about the dream of the little kid one day driving the star.<\/p>\n