Interview with Timothy Mahoney on Meaningful Marketing and Knowing Your Real Customers

Hi, my name is Ian Peterman, CEO of Peterman Design Firm, and we're here on Conscious Design Podcast. And I'm talking with Tim, who has a lot of experience on the marketing end of things in automotive. And I wanted to let you introduce yourself. And we had talked a little bit about Subaru and some of their great programs that they had. So I'll let you take it from here.

All right, Ian, thanks a lot. Happy St. Patrick's Day. I'm happy to spend a few minutes with you. I spent most of my career in automotive, in marketing, and most recently retired from General Motors a little over a year ago. But probably the longest tenure I had when I was working was with Subaru. I was there for 15 years. Left for about 7 to join Porsche and came back in, in 2011— excuse me, 2006— and stayed for about 5 years and was head of marketing there, was the chief marketing officer. And that's where I think we did a lot of really interesting work around the idea of love. It's what makes a Subaru a Subaru, with a lot of cause-related components and really giving back to the community.

Yeah, I think we talked about this a little bit before, is You know, inclusivity, it's of course 2020 made everybody really focus on it a lot.

Right.

But, you know, the companies that have been, have been doing that, have been paying attention to what their customers pay attention to and care about. And, you know, when we talked about the Subaru program, it really stood out to me at least, and especially the automotive world, Of really engaging customers on their level of, hey, you care about X, so we're going to care and we're going to put some money behind it even. So, and I know you were there, so can you say a little bit more about what that process was like in creating it and how it came about? And obviously it's been successful, so they keep doing it. They keep doing it every year.

Yeah, exactly.

Yeah, I would love to know kind of that experience.

Yeah, I have to say it's satisfying because, you know, we just passed this past week the 10th anniversary of the tsunami and the nuclear sort of disaster at Fukushima. So that's how long I've been gone from the brand. But when I'm on the outside still looking in, they are still on the same strategy that we laid out starting in 2006, 2007. And it really was customer-centric, understanding who that customer was. You know, when I came back from Porsche in 2006, my experience at Porsche really taught me about how important it really is to understand your customer. And so I brought that with me coming back to Subaru and really trying to understand how we could position the brand in the, the 7 years that I was gone, the company had moved through a series of marketing heads, a series of taglines, a series of campaign directions. And they had launched a tagline, for lack of a better term, it's what makes a Subaru a Subaru. When I returned, I asked the question, well, what does make a Subaru a Subaru, right? They weren't really explaining it. You know, you do an ad and like a lot of car companies, you just put the tagline at the end, but it really didn't, it didn't really connect all the way. And so we did a lot of research with the customer to try and understand what kind of set them apart, let's say, from a Toyota buyer, a Honda buyer, or just a car buyer in general. And the thing that came through loud and clear when you ask somebody, and I would, you know, sort of challenge your, your, your, your, listeners to go out and do this. If you ask a Subaru owner what they think of their car, they're probably going to say, I love it. And that's not necessarily the case if you ask a Toyota buyer or a Honda buyer. They're more like appliances. They're like Timexes and things like that. They take a licking and keep on ticking, but the passion there is certainly not there. And the nice thing about this idea of love and the love that people have for the brand is that it really traverses the entire product range that they have. So they have the sort of classic outdoorsy kind of Outbacks and Foresters, but they also have more performance-oriented vehicles like WRX and STI. And literally across the entire spectrum, if you said, what do you think about it? They said they love it. And so we launched that idea in about 2007. And I have to say, as a CMO, it was one of the scariest presentations I ever made, standing up in front of 1,300 car dealers and saying, we're going to talk about love. And it was—

Not a usual topic.

No, not at all. Not at all. And, but at the same time, I felt confident in the work that we had done and the homework that we had done, that this was something that would resonate with the customers. And we were at around that time headed into the recession, unfortunately. And that was a really, really tough time. And as we got closer to the end of the year, And everyone knows when you turn on the TV in November and December, it's car sale after car sale, all these made-up events and things like that. And we were trying to imagine how we could stand out and compete in that. And we, we, we came up with a campaign called Share the Love, and it really was about giving back to the customers. And so I can talk in more detail about that, but that, that really became an important part of really bringing the strategy to life.

Yeah, well, that's, that's definitely going out on a limb as far as, you know, topics. Like you said, love is not a topic you usually bring to your car dealers, let alone all of them.

Yeah, exactly.

As part of it. But, but I mean, a testament to what you guys started is that it's obviously still going.

It's well received. It's, you know, it didn't falter.

You launched it. You were, you were right in your, your customer information. And it's And it's still going. So, you know, in that process of researching and figuring it out, how long did that take you? What was that like in engaging with the customers to find that secret that's worked?

So we did a lot of combination of one-on-one interviews, you know, depth interviews with customers, but also focus groups with Subaru owners. It took, I would say, probably 3 to 4 months, somewhere in that range, maybe not much longer than that. One of the constraints, if you will, that I put on the agency, on our partner agency, was we couldn't dump, it's what makes a Subaru a Subaru. We just had to answer the question, what makes a Subaru a Subaru? And the reason for that is they had transitioned, like I said, for 3 or 4 different taglines When I left to go to Porsche in 2000— excuse me, in '99, the tagline was, it's the beauty of all-wheel drive. And the idea was, it's— beauty can be interpreted in a lot of different ways. So it's the safety in foul weather, it's the camping, and where all-wheel drive can take you, it's the active safety, all those kinds of things. And then it kind of went boom, boom, boom. And they went to, when you get it, you get it, and think, feel, drive, and all these different taglines, none of which probably anybody remembers unless you go on Wikipedia and kind of look at— Right. history of it. But we went through this process and we just— because, so we weren't just talking to ourselves in an echo chamber, in a bubble. We actually did research not only with Subaru owners, but with owners of competitive products. So Toyotas and Hondas, as I was saying earlier. And it was really clear that this passion for the brand really stemmed from this love that customers have and this feeling that— I don't want to use the word club, but that, you know, You know, if you want to go to a super club meeting, you probably should go to a Whole Foods, right? I mean, that's, that's kind of the kind of place, or, or an REI. And REI is another really good, you know, kind of usual suspect kind of location. Um, a quick word about, again, the, the Share the Love campaign. So we had this horrible recession, you know, the financial collapse, all that stuff that went on, and we were trying to imagine how we could how we could stand out in the crowd at the year end and do something smart. And the notion was, and we wanted to construct it in a way that it was win-win-win, and win for the dealers, win for the customers, and win for these organizations. And because what happens, and it's happening now, certainly with the pandemic, nonprofit organizations are struggling with donations and things like that. So we identified—

Absolutely.

We identified 5 5 organizations that we knew based on the research we had done would resonate with the customers. So for example, the SPCA or Meals on Wheels or Habitat for Humanity, all of those kinds of things connected in a really good way. I mean, in addition to having to stand up in front of dealers and saying, we're going to talk about love, I also had to go to the CFO and say, hey, listen, I need $250 a car to to make this thing really fly. And the way it was constructed, and I think when you give customers choice, this is incredibly important. And so we arrayed these 5 different organizations, and when the customer bought the vehicle, they could actually decide which organization got the $250,000, or they could allocate it. parse it out to various ones or divide it equally across the 5. But the sense of the customer being in control and engaging with an organization that they felt good about made a huge difference. What happened was, of course, we had record sales. The incentive costs actually went down, even though I was living out of the incentive budget to fund this $250 per car. And the other thing that was sort of, I think, smart and worked well in terms of construction was that these organizations leveraged their owner— not their owner base, but their donor base, their member base— to kind of let them know, hey, if you guys buy a Subaru during this month and you need a car, it's going to help us too. We're going to get 250. So we activated these organizations like Meals on Wheels and ASPCA and whatever, and And like you saw this year, if you watched any TV around the holidays, I guess it's— gosh, I'm losing track of how many, how many years, but they've, they've donated well over $100 million. I think it's maybe $150, maybe $200 million over these, over this period. So it really helps people, but it's also a statement about the brand.

Right. Well, there's, there's something to say about that involvement too. When you're, you know, if you're just, oh, we're going to donate $5 to so-and-so or whatever amount, right? It's kind of just automatic and there's no participation to it, right?

There's no—

you don't own it. You don't, you don't get to feel good about the donation. You just, oh, $5 is going to go to this thing and, you know, whatever. It's very—

It's like a tax.

It is.

It's like a, a really nice tax that's going to some— someone It needs it probably more, more. But at the same time, yeah, it is kind of a tax, whereas this engagement model is— and I didn't know, I didn't realize that you could actually pick and split between, you could, you could allocate. So that makes it even more interactive if you wanted to be like, oh, I like all of them. I want, I want to support all of them. So that's—

and we knew, we knew some people wouldn't select. And so by default, then it was just spread across the 5 organizations. I'm not sure, to be honest, because I'm a little bit further away from it now.

The program continues.

And I mean, it's promoted and the dealers are super engaged in it and they like it. And they've added now other elements to it. I don't know if that feature of being, as a purchaser, having the ability to select is still part of it, but I know that they continue with it and there still are multiple organizations that are beneficiaries. The other thing that I've seen, and again, I think this is for me satisfying, I guess you could say in terms of a legacy is they continue to evolve. And during the pandemic last year, Subaru donated 50 million cars— 50 million meals to Feeding America. And now this spring, they've donated another 100 million. So they really tend to walk the talk, which makes me feel good about being an owner. L. seem to be, especially in this sort of cause-related component, they seem to be not necessarily moving away from the notion of love, but if you pay attention, and I think it's accurate, they use this sort of tagline now more than a car company. And I think that, that does ring true because they do things that other car companies wouldn't do.

Right. Well, and that's, that's important too. You know, you, you can't just Well, I guess you can't, you can't just have your— we only donate when we make money directly, right? Each sale you donate.

Right.

But the whole backing it up with, oh, and now we're gonna buy millions of meals, we're gonna buy, we're gonna, we're gonna donate these things, really adds— because they have built this brand around we care and we care about what our customers care about. And so it was really nice to see a lot You know, they're not the largest brand, but they're a bit— they're a big brand. They're, they're a known brand. They're actually, you know, walking the line. Um, and I kind of want to segue a little bit too, because you, you left Subaru and you worked at Porsche during when they launched their SUV.

Sport utility. Yeah, yeah.

Which is, which is very odd, you know, that, that kind of was the start of people going, what in the world's happening?

Sure.

But at the same point, I think there's some ties that we talked about that even, you know, Porsche and Subaru are fairly similar in quite a few ways. And you have to know your customers. You can't just launch an SUV as a sports car company.

Exactly.

And not know your customers. So how— I'd love to hear a little bit more and have you share on What would that experience is in doing— I feel kind of a similar process of exploring your customers and then launching something way out of the box for most people. Like, most people think of Porsche, they think of a 2-seater 911, right? Exactly, exactly.

Or a Boxster or a Boxster Spyder, whatever. Yep, yep. Yeah, no, I— it was a great, it was a great experience. Um, I actually hadn't planned to leave Subaru when that all happened, and as often the case, a recruiter reached out to me and said, hey, would you be interested in talking to Porsche? On a personal level, I had studied in Austria and I was a language major as an undergrad, so I lived in Vienna and everything. And most people associate Porsche, and actually they're based in Stuttgart, but the family's Austrian, right? And it was an interesting opportunity as a foreign language major as an undergrad to finally put some of that to use, right? You know, I didn't study Japanese. It's always nice. Yes, you know, it's always good when, you know, your parents help you invest in an education and then you actually put it to use in one way or another. So, I mean, I joined them and really with the goal of helping them launch the Cayenne. And for me, it was an interesting marketing challenge. They had liked, they liked at least this is what the recruiter told me, and I learned later on after being there, they liked what we had done at Subaru by launching a product like Outback and then following that up with Forester. Subaru didn't have a classic sort of SUV product like a Ford Explorer or Bronco or whatever. We really had to reposition, or maybe more finely position, an all-wheel drive wagon into something that was this crossover between SUV and passenger car. So that was interesting to them. And then when they found out that I studied in Vienna and spoke the language and everything, the whole interview process went, went super fast. I went, like I said, to help them launch that vehicle. And it was a great experience. I was there 7 years, I traveled a lot. But when it came to being able to take a brand that was known for you know, 356s and 550 Spiders and Boxsters and 911s and all of that stuff and move it into a different segment, what we were able to do and the way we were able to accomplish it was to stay true to the core values of what Porsche stood for. And those were 3. One was performance. I mean, when you think of performance, you think of fast cars, right?

Yep.

You're a design firm, the second one is design, you know, Sort of this design that you go, wow, that's a really sexy looking vehicle, really smartly put together. And the third one, which is interesting, which can, if taken to the extreme, be a real negative, and that's this idea of exclusivity. Exclusivity can quickly escalate into snobbery and everything else. Yes, when mishandled. Exactly. And for people to push away and say, you know what, I don't want to be part of that. But those 3 things were absolutely true in their historical portfolio of sports cars. But it was absolutely true in the case of Cayenne too, right? It had really— some people thought it a little bit polarizing, but had good design. It had really knock-your-socks-off performance. And it was exclusive. We weren't trying to sell you know, 400,000 of these things. It was really about entering into a new segment. And once that happened, that allowed us then to plan other entries like Panamera, which was again an area that the company had not really competed in, really a 4-door— I don't want to use the word sedan, but sedan-like product.

Right.

So that was the jumping-off point. The other thing that helped us launch Cayenne was positioning. And what do you say about this thing? Because for sure, Porsche wasn't the first to market, right? Mercedes was already out there with the M-Class and everything else. And we had this internal positioning, again, understanding the customer, but also understanding what the brand stood for, that it was the first SUV fathered by a sports car. And that was absolutely true, right? The sports car DNA of Porsche had essentially been injected into a different category, and that allowed us to talk about it in a credible way. I mean, I think of some of the print advertising that we did. One of them was funny. Do you really need 450 horsepower to pick up diapers? Did you ever run out of diapers? Right. You know, and it was this notion that There was a real understanding of the consumer. And this is really borne out in a lot of anecdotes, but also facts. A lot of guys, the buyer profile of the 911s, at least a while ago, and I think it's probably still true today, was over 90% male. And the first thing that happened when the wife gets pregnant is the 911 goes in many cases. And so now there's no longer a need for that to happen because you now have a family car that happens to be a Porsche. And so we never really talked about it in those sort of family terms. We did one headline that got us in a little trouble, which always means that people are paying attention, which was, you're a dad, you're not dead. In other words, your life is not ended by starting this family, and you can still have— you could have your cake and eat it too.

Exactly.

Yeah, a lot of the communication flowed from that. Okay. Yep.

Well, that's awesome.

Yeah.

Oh, that must have been a really exciting project to go on to.

It was great. It was great.

Amazing.

Um, I don't think I have any other questions right now that I can think of, but I wanted to, you know, if there's any other pieces that you wanted to say or add in or You know, if you want people to be able to reach out to you, share share all that.

Yeah, I mean, no, I think obviously you come really from a design perspective, and I think this is so important in in in automotive purchases, right? Because cars say an awful lot about your personality, you know, and and and then they make a statement about you, right? You are what you drive. You know, clothes make the person. There's a German expression, Kleider machen Leute. You know that clothes make. the people, right? And so design is really, I think, really important. And the funny part, you know, having worked at Subaru, a lot of people really kind of crapped all over their design for years and years, right? They were kind of— it was kind of quirky and unusual, but at the same time, it made a statement, right? And it was more about the inner beauty and the inner love and things like that. So, no, I don't really have anything else to add. It's been a great— it's really been a great ride. You know, we didn't talk much about my time at VW, but that's fine. But the Porsche and the Subaru experience were absolutely invaluable and really some of my fondest memories over the years.

Awesome. Well, thanks for being a guest. I appreciate it.

Absolutely, Ian. All the best to you.