Kevin Roberts - Honk If You Love Toyota!

Speech
Kevin Roberts

What's driving the future of automotive brands?
Address to the Toyota Australia dealers conference
Sydney, 23 September 1999

There has been a revolution in automotive marketing. Right across the industry the performance and the quality of cars has skyrocketed and converged. Making one car stand out in a crowded attention economy marketplace is more difficult than ever. In this address to Toyota dealers in Sydney, Kevin emphasises the need for automotive brands to make connections with consumers, not just through the purchasing experience but through enriching the ownership experience.

It’s inspiring to be part of the greatest car company in the world. And fantastic to have shared greatness with you for a moment by making what judges at the Advertising Olympics in Cannes this year called one of the year’s best automotive ads, "Bugger".

Saatchi & Saatchi is totally committed to Toyota. We have agencies in 91 countries. All around the world we are doing great work for Toyota.

We love working for Toyota, because we are proud of the work we do for you, and because we get to celebrate so often.

We celebrate Toyota being number one in Australia. In the U.S., we have celebrated hard every time Camry has been named top selling car for the past three years.

We were partying when the 3 millionth Toyota was sold in Australia this month.

And we were blown away when we saw the results of the latest ARMS customer loyalty survey here in Australia. Three years after buying their new cars 83% of Toyota owners said they would replace their current car with a new Toyota. Ten percent ahead of the nearest competition.

Great cars. Great brand. It’s great to be number one.

Getting to number one though, is just the beginning. The peak performers of business are never satisfied with just getting there.

I was totally into a Glenn McGrath quote I read the morning after the Cricket World Cup final. "Getting to the top is easier than staying at the top. We’ve got to work harder to stay at the top."

That’s the attitude and that’s the challenge for Toyota. When you are on top it gets harder. Everyone wants to knock you off. You can’t afford a moment of complacency. You have to keep lifting your game.

Today I want to talk about the challenge of staying on top. I want to talk about Peak Performance. I want to talk about the challenges we face in today’s auto market and what that means for all of us - at Toyota, at Saatchi & Saatchi and in every Toyota dealer showroom around Australia and the world.

We are living through an era of massive change. The technological revolutions of the past twenty years have created a world of blinding speed, blistering competition and an explosion of product.

The challenges for marketing to consumers have never been greater.

They call this the information age. Information is supposed to be a competitive advantage. No way. Information is the problem today. Too much information.

You all know the story. Thousands of TV channels, movies, radio stations, newspapers and magazines. Millions of websites. Billions of phone calls, faxes and e-mails. And right through all of it, new product launches, new improved product line extensions and ads struggling to be heard.

Too much information! Consumers are overwhelmed by the choices they face everyday. This is the Attention Economy. Human attention has become the principal currency of our time. No matter what kind of business or organisation you are, your fundamental job these days is competing for the attention of consumers.

Add commoditisation to the mix and it gets even worse. By this I mean every category of every industry crammed full of barely differentiated products. How can you stand out and grab attention when your products look the same as your competitors?

Cars used to be easily differentiated through distinctive attributes. The marques we all grew up with were all easily understood through their own unique performance standards, distinctive styling, levels of quality and efficiency.

In the 1970s and early 80s Toyota established a global presence based on reliability and fuel efficiency. By comparison, Holdens and Fords were the Aussie mates from the local Pub - unsophisticated, solid, thirsty.

Since then the industry has been transformed by intense competition between global manufacturers with massive resources. The local pub has become a wine bar. Performance levels right across the industry have skyrocketed and converged.

Away from the luxury and specialist niche markets, truly significant engineering-based product differentiation in the car market has evaporated.

People don’t understand the engineering today anyway. A low spec Starlet today has more sophisticated electronics than the rockets that first took men into space, and outperforms many of the sexiest sports cars we all grew up dreaming of.

Those big things that used to separate one marque from another have disappeared. New engineering innovations are soon matched or exceeded by competitors and they get faster every year.

Styling doesn’t differentiate any more.

Fuel efficiency doesn’t. In the 1970s Toyotas would regularly double the fuel efficiency of their US competitors in road tests. Today the differences are negligible.

Reliability has become ubiquitous. There has been an auto-industry quality revolution. Today the industry-wide average defects per car are lower than even the best performer of twenty years ago.

Cars just don’t stand out from the crowd on engineering alone anymore. Put this together with global production over capacity and flat demand and you have a commodity trap waiting to kill any margin you have left once and for all.

How do you keep one step ahead of the commodity trap? How do you make one car stand out from the crowd today? What has been the quantum leap in car marketing that has taken Toyota to number one?

It’s all about recognising the biggest shift in business today.

It's not globalisation or industry consolidation, it's not technology, but the massive transference of power from producers to consumers.

Much of it fuelled by the Internet revolution. Forrester Research says that by 2003 the Internet will influence eight million car sales. Half a million sales will be entirely online.

More choice and more information has created a world of spiralling customer expectations.

Consumers still want to be loyal, but they won’t tolerate poor performance. In the ARMS customer loyalty survey the biggest reason for customer disloyalty among Toyota’s competitors was manufacturing faults. Sometimes as little as one single fault in three years of driving a car.

Perfection has become a commodity. Perfection has been reduced to the table stakes that only get you into the game.

In the banking industry, you get the concept of electronic road rage. Banks that mess up one transaction on the information superhighway get beaten up and abandoned by their customers.

There is a revolution happening in automotive marketing. In Australia, the challenge for Toyota is to maintain their lead.

The quantum shift has been from getting more cars out of factories and closing more sales, to marketing a brand. There’s no alternative. In markets like Australia with flat demand, where products lack clear differentiation and consumer expectations are constantly spiralling upwards, strategies based solely on increasing sales volumes are going flat out down a dead-end street called commodity.

Marketing a brand is all about keeping ahead of the commodity trap by concentrating totally on customers. Offering products and services that improve people’s lives. Building long term relationships. Making money from on-going relationships with consumers, not just the original sale.

Brands are more than trademarks. They are trustmarks.

At the functional level, Qantas is just another international airline. But Qantas the brand goes deeper than that. Every Australian has some kind of emotional view on Qantas. Every time a Qantas jumbo flies overhead it’s presenting a symbol of Australia to Australians every bit as potent as a giant flying prawn on a barbie.

In the Attention Economy, no matter what industry you are in, brand is your company’s only real asset. It has become the biggest single basis for consumer choice. Without brand, the only thing that differentiates you from the competition is price.

And brands can make entire nations defy rational behaviour. Rationality demands that people choose their favourite food based on flavour and appearance. Vegemite, that edible sump-oil we all feed our kids, blows that theory out of the water.

Brands exist to be the emotional motivator of every purchasing decision. Their sole purpose is to connect with the hearts, minds, guts and nerve endings of consumers.

I’ve been in brand marketing for over thirty years. The one thing I’ve learnt is that the best connections with consumers are based on love.

I measure the connections between consumers and brands on this Love/Respect Axis

High respect is the table stakes. These days everyone has to be in the high respect quadrant just to stay in the game. That’s the functional excellence consumers have come to expect. The rational, design and engineering facets of a product.

Love is all about image, involvement and fun. It measures the biggest e-factor in business today. It’s not electronic commerce. It’s Enjoyment. Entertainment. Experience. Extension. Emotion.

From here on in the e-factor will be more critical than ever. Brands that aren’t loved by consumers aren’t going to succeed.

Consumers in the U.S. love the Corolla but they have started to take it for granted. I was in LA last week and I saw this new spot. I wanted to buy the new, more powerful Corolla right there and then. You can’t help but love it!

The only successful relationship to have with your customers, your staff and your partner, is a connection based on high love and high respect.

Dealers are more important than ever in the global auto brand marketing mix. Brands aren’t built in factories. They begin to be built the moment a car leaves the factory.

Every time consumers come into contact with Toyota the brand is being built and reinforced. The deeper and longer the relationship Toyota buyers have with the Toyota people who sold them the car, the stronger the brand is built. Most often that’s at a dealership.

Deepening the relationship between your dealership and the people who buy cars is absolutely critical to the continued success of Toyota in Australia.

It’s not about the purchasing experience any more. It’s about enriching the ownership experience. Maintaining your relationship with your customers well beyond the expiry date on their free service agreement. It calls for greater integration of the brand marketing effort from the factory to the ad agency to the dealer showroom.

And that’s good dollars and sense. Australia is a mature car market. Global car production has significant over-capacity. There won’t be a huge increase in new car sales in Australia. The most significant revenue growth in the auto industry from now will be downstream from the dealers yard.

Great advertising informs and reinforces consumers in their choices. It tells a compelling story. Great ads and brilliant campaigns deliver the e-factor like no other marketing device.

Great ads contain ideas that are bigger than advertising. They become part of the fabric of our lives. Like "Oh what a feeling", one of the most recognised slogans in Australian marketing history.

Or the "Welcome to our World" Toyota campaign that ran in New Zealand a couple of years ago and took its theme song, with the ad as its video, to number one on the charts for weeks.

"Or Bugger", a national phenomenon here and in New Zealand. "Bugger" has been a focal point for Aussies and Kiwis to celebrate and feel good about parts of our own culture. But most of all, "Bugger" grabbed attention and delivered the e-factor in buckets.

Great advertising is the single biggest input to building a brand. But its only one input. The other critical success factor for great brands from here on in is going to be the people in your company.

Great brands in the new millennium will be built by companies that operate at new levels of passion, commitment and focus. This is an era that demands a new level of achievement - I call this peak performance.

Peak Performance has been my most powerful motivation throughout my business career. It’s a simple idea. That individuals and organisations can operate to the peak of their abilities every day. That you can always be at the top of your game, and at the top of your field. Always in contention. Constantly restless, looking to make magic.

The greatest business challenge for every leader today, is to constantly strive to create the environment where peak performance can flourish.

At the University of Waikato in New Zealand where I teach business, management and MBA students, I’ve been part of a research team working on a worldwide blueprint for peak performance in organisations.

We’ve rejected the traditional approaches of management science - which is more of a cross between military strategy and the laws of civil engineering than a realistic model for human organisation.

We looked to sport instead.

Sport is inclusive, it's all about teamwork, excitement, fun, skill, achievement, winning and dreams. And really, isn’t that what you want your business to be all about?

Sport is the greatest social phenomenon of the 1990s. Bigger than music. Bigger than the movies. Bigger than the Internet. It is empowering and enfranchising more young women and men than any other movement of our time.

I know I’m preaching to the converted here in the greatest sporting overachieving nation on earth. I once interviewed an Aussie for a job and I asked him, "are you religious?" He said, "no, I’m from Melbourne and I play hockey. But my family is. They’re Essenden."

We went inside the greatest sports organisations in the world to find the secret of what makes them so special. We weren’t looking for the story of how success came, but the blueprint for how to make it stay. We wanted to find out how they answer the question: what comes after what comes next?

Among others, we got inside the cultures of Australia’s world champion Cricket, Netball and Women’s Hockey teams, the All Blacks, Michael Jordan's Chicago Bulls, the San Francisco 49ers in Gridiron, the Atlanta Braves in baseball, Williams Formula One and the Americas Cup winning Team New Zealand.

From our research we have extracted the peak practices of Peak Performing Organisations.

These are ideas that are relevant to every company. They will work for the entire Toyota organisation globally and they will work for each of your individual business.

The first Peak Practice we call Making Magic. It’s the freakish game winning plays, the hat tricks and the no hitters. The days when an entire team produces a performance beyond even their own expectations. It’s the unyielding faith in every team we studied that the magic will always be there and will always deliver.

The second Peak Practice is that Peak Performing Organisations need Inspirational Players, the gamebreakers and the motivators. People like Shane Warne or Laurie Daley. Or Frank Williams, the wheelchair-bound Formula One genius, who terrifies his competitors because, as one of them told me, "he has more time to think".

Number three is Creating the Future. Building the team for next season and ten years time from the bottom up.

Peak Practice four is Exceeding Personal Best - a deep commitment by each individual to personal improvement. It motivates amazing work ethics.

Five is Community, an intense sense of belonging among all of the organisation’s members. Community is all about real team play, where sacrificial plays on and off the ball, and on and off the field are the accepted norm.

Community is built through rituals. Like the Aussie cricketers’ victory song "Under the Southern Cross". With all respect to Boonie, former chorus leader, it’s lucky that community doesn’t require perfect pitch.

Next is Game Breaking Ideas. Each of the organisations we visited had a culture that removed the fear of failure and celebrated ideas generation. All ideas – the incremental improvements as well as the revolutionary leaps. And as David Campese proved so often, you often have to go through several absolutely crazy ideas before you hit the great ones.

Number seven is Game Focus, understanding and pursuing goals and being able to quickly refocus if necessary. Maintaining and changing Game Focus is what separates leaders from managers.

Number eight describes the extraordinary ability PPOs have for Sharing The Dream - within the organisation and with all of their surrounding groups – fans, the media and sponsors. Brilliantly staged events like the Stadium Australia Wallabies-All Blacks test match, and this conference are all about sharing the dream.

The ninth Peak Practice is The Last Detail. The commitment and profound sense of responsibility among all the organisations members to getting every last detail right.

You see the last detail at Williams Formula One. Their garage is absolutely greaseless. It looks more like a hospital operating theatre than a workshop.

 
The Peak Practices are powerful, simple ideas that work. They’ve been critical to the individual and collective performances in Saatchi and Saatchi over the past twelve months that have grown our revenues 21%, doubled our share price and won us $350million of new business.

The Peak Practices are transforming Saatchi & Saatchi into a Peak Performing Organisation. Building a culture that is inspirational, exciting, relentless, imaginative and inclusive. A culture that shares the faith in our dream. That lives the mantra, One Team, One Dream.

The Peak practices are totally relevant to Toyota. Right now your challenge is to stay at number one. That means so much more than just selling more cars.

In the car business, creating a sustained competitive advantage goes far deeper than good sales work on the showroom floor. It comes from the heart of your organisation.

It’s about believing in the brand. Being absolutely tuned up and focussed on service 365 days a year. Being able to handle any request, however bizarre, however short the notice. Thinking one step ahead of the consumer, and offering them services that delight them. It’s about having fun. Becoming a place people really like to visit. A dealership where magic is made.

The challenge of Peak Performance for every person in this audience is to energise your individual businesses and your brand with a new way of thinking that touches every person in your organisation.

It’s about having a team mindset, flying in formation and honking if you love Toyota.

ENDS

© Scoop Media