An optimal brand architecture strategy for Cox Automotive.

An optimal brand architecture strategy for Cox Automotive.

Thursday, 26 May 2022 12:53

Discussion between Mathew McAuley, Director of Business Strategy and Transformation at Cox Automotive Australia, and Paul Nelson, Managing Director of BrandMatters.

You can view the video interview on our YouTube channel here or scroll down to view it at the bottom of this article.

PN:
I just wonder whether you could start by just giving us a brief overview of your role and how you've come about to basically uncover the brand architecture conundrum that you discovered.

MM:
My current role is Director of Strategy and Business Transformation, but previously, I was also responsible as director of marketing and communication. So, I had a blend of a role, where I was responsible for marketing and communications and overall strategic direction. And in the case of branding architecture, is almost like a perfect match because we were looking at our business and the complexity, and really wanted to focus in on how we could make it simpler for customers. So having been with the organisation for some time, in Cox Automotive had added brands and added companies, as director of marketing, I was starting to get a sense of how we could actually approach our market centricity in a more simplified way.

PN:
Well, Cox Automotive is a complex organisation. 50,000 employees across the globe, 20 billion in revenue and more than 500 employees in Australia. Let's unpack, I guess, the architecture challenge in some ways. We know that brand architecture and the alignment of brand architecture is so critical to the customer experience, so let's unpack that for a moment, the challenge you actually found yourself in.

MM:
It goes back to 2016 when we first established Cox Automotive as a business entity in this market. We had one major brand at that time, but over the last five or six years, we'd started adding to the stable of brands we had in Australia and New Zealand. Now, nothing as complex as the United States, where our company is headquartered. They have over 30 brands in the market, and they have a real challenge in providing some simplicity. But having said that, in a smaller market, we had made it, in my opinion, difficult for customers to understand the value proposition of working with our individual brands and businesses.

MM:
We started to think about what role does Cox Automotive play in the wider automotive ecosystem, we understood that customers knew, maybe, about some of the products or services we had in different segments but had no idea that we could help them with other challenges in their business. So, from our approach, we were looking at, what are the brands we have operating? What markets are we segmenting? And how should we best organise ourselves in terms of a customer value proposition? We were looking at taking the brand sort of presence, not only from a business brand, Paul, but also we had gone down the path of almost giving some of our products brand identities of their own, which, in retrospect, when we acquire companies, you have to look at what they've done and make that work in a shorter-term play.

MM:
But longer term, when we step back from it and thought about how we could best approach, we knew we had a challenge. We knew that we had too many brands in market. We had products which are identifiable, separate brands as well. There wasn't really an understanding within the business about what is a brand, versus what is a product, and how do you create a product brand in a nice, sensible way. So quite a few challenges. And that's the customer facing proposition. We’d done some work internally to look at how we should structure our business to better serve our customers, but that was stage one. So, stage two was definitely, then, the branding architecture point of view.

PN:
I remember you saying, at the time, that even your own people were struggling sometimes to define, how do we organise and take our different products to market? And where's that brand hierarchy? And is that a product descriptor? Is it a business unit descriptor? Is it a product brand? Is it a product? What's its relationship with the corporate brand? All of those sorts of characteristics reveal themselves when you begin to have a look at your architecture, don't they?

MM:
Absolutely. When you bring different companies together who have shared customers, the way those brands were being surfaced were sort of in congress with maybe how we would think of it from a Cox Automotive point of view. We had a couple of challenges in that regard, and definitely, we compete in many different market segments. Cox Automotive looks after many different brands and businesses. When you think about the automotive ecosystem, from retailing vehicles to wholesaling vehicles, to providing vehicle services, to providing dealer software, all these sorts of things that we do across, in many cases, shared customers, but there wasn't any connection.

MM:
We weren't going out to customers and really making it simple for them to understand that we could do all these things, because they might have exposure to a brand here or a brand there, but they didn't really know. And that created some issues for our sales teams, as well, in terms of who's selling what, how does that work, at what level do they talk to a customer? We've got really small customers and we've got really big customers who are part of global companies, as well. So, for us, it was really important that we, not only through our branding architecture, but then all the work that flowed on from there, empowered our sales teams to really go out and tell the Cox Automotive story. And the branding architecture has certainly made that much simpler than what it was.

PN:
We find ourselves in this situation frequently with clients, where they either acquire or divest brands, they build loyalties, they build teams, they build structures, they build agendas. We're all human, and then unpacking that is frequently a bit of a challenge, as well. So, our process with Cox was that everyone was on board, workshop through the process, and look to define a solution.

MM:
Absolutely. I think if I talk about the role of strategy and where it overlapped with branding architecture, is that we knew that we really needed to succeed in the local market by empowering, what I would say, the collective power of our brands. We hadn't quite got there. We hadn't really worked out how to do that. The branding architecture gave us a roadmap, and the strategy of where to move forward and how to do that. It's also fair to say that there were lessons in our approach, and especially working with your team in that collaborative manner, that bringing all the stakeholders together, giving them a high level view of what we're doing and why we are doing it and the benefit that we could expect by doing this piece of work, certainly got everybody on board and behind the project.

PN:
Let's talk about some of the surprising results, the things that you thought worked well and key learnings that could be applied in similar projects.

MM:
I think it is important that you take your assumptions out of the process because when we started looking at how we would best present to customers, we were talking about retiring some brands. And in our marketing team, we approached it with caution, because, especially when you buy companies, and that could be smaller companies and the founders are still within the business, you always think they're going to be so attached to their brand. And we have to really tread carefully.

MM:
It is really important to paint a picture of where we want to get to and why we want to get there. Those leaders immediately saw the benefit of giving up their brand, giving up their product brands, giving up their company brand to become part of a Cox Automotive offering, because they understood that by doing that, they're actually going to empower their businesses to be more successful.

MM:
If you can create and embed that vision, and then show them how you're going to get there and why it's going to be better for them in the long run, then you'll go a long way to getting people to step back from being... not self-interested, but just having a limited perspective.

MM:
Show them what it's like today. Show them what it's going to be like tomorrow. If you are sitting there thinking about, okay, well, what does that mean for my BDMs, my customer service people? Good leaders want to know how it's going to impact their people. I think it was a valuable takeaway for me, that if you can show them what the business card looks like, if you can show them what email... if you can show them, pragmatically, how does all this high-level thinking actually translate into tangible benefits as early as you can, then I think you're doing the right thing.

MM:
I think another key learning is to be highly visual. And by that I mean, when you look at brand architecture and the theory and the reasoning and the logic, you take people through all that, and you can have workshops upon workshops. But when you get down to where we are going to go, all that aside, the first thing they want to say is, "What does it look like? What's my email signature look like? What's my business card look like?" And you think, you've done all this high-level theory and we're looking at value proposition and how we're going to go to market, and all this really great thinking and structure, and it's going to let us really be successful. But when it gets to the nitty gritty, and even CEOs and senior businesspeople will look at it and go, "Okay, but what's my business going to look like?"

PN:
Any final words or final advice? You've already provided a depth of it already, but do any others, considering a project like this, considering an architecture or portfolio challenge, that you might have?

MM:
I think my final words would be engaging early. We'd been on a bit of a journey in terms of acquiring businesses, and then COVID hit, so some things were put on hold. But my advice is to understand, if you've got a big challenge, if you've got a number of brands and you can see that it's going to take some time, I think the earlier you can engage with external experts the better. And that's not to put aside the internal thinking, because that needs to happen.

MM:
If you are embarking on a big piece of work or a small piece of work, depending on the size of your business, engage early. Just benefit from the expertise to structure your process and your approach to a piece of work like this would be beneficial.

PN:
Fantastic. Well, Mat, thank you, at every level. It's been a delight working with you, and thanks for your leadership and direction mentorship through the entire programme of work. And engaging all those stakeholders made our lives far easier as we worked through the process. So thank you, again. Really appreciate it.

MM:
It was a great project to work on. Thank you.

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