Tuesday, September 14, 2010

Tim Mahoney, Subaru

By David Kiley on Mon Sep 13 2010

Photograph by Frank Veronsky

When Tim Mahoney returned to Subaru in 2006 to become chief marketing officer following a nine-year stint at Porsche of America, he hardly recognized the place he had left in 1997. The company had served up five separate ad slogans and strategies in six years from two different ad agencies, and had five radically different print ad layouts in the previous year.

No wonder the company was languishing at around 180,000 sales a year, while brands like Honda, Nissan, Hyundai and Kia were climbing. Even Subaru loyalists had lost the plot.

I guess I am old school," says Mahoney. "But I subscribe to [Al Ries and Jack Trout's 1993 book] The 22 Immutable Laws of Marketing, which says marketing effects take place over an extended period of time." Change the strategy every year, he says, and nothing good has a chance to stick.

After settling in to the job for a year, Mahoney fired DDB and assigned the $150 million-plus account to Carmichael Lynch, an old Porsche contact. Mahoney says he liked the chemistry he had with the Minneapolis agency. And a review of shops to pick a new agency seemed unnecessary because he knew exactly where he wanted to go with the brand.

Carmichael Lynch CEO Mike Lescarbeu says Mahoney told the agency it had to keep the slogan, "It's what makes a Subaru a Subaru," created by DDB, and go with one print layout essentially already picked by Mahoney. "As an agency, we felt like we had both hands tied behind our back," says Lescarbeu. "But actually that was very smart because it forced us to focus on a real message strategy and tone, and not on the process of coming up with the perfect line."

Carmichael modified the line by one word. Since 2007, it's been "Love. It's what makes a Subaru a Subaru." It signaled a shift from a largely rational message scheme touting all-wheel-drive, safety technology and "Boxer" engines to one that talked about those things in an emotional way. "The big insight for us was pretty simple," says Mahoney. "Subaru owners love, really love, their cars, and we thought it better to have deeply committed zealots star in our marketing rather than celebrities."

That was a change. Subaru had gone through a series of celebrity pitchers along with its revolving ad slogans including Paul Hogan when Subaru launched the Outback in the 1990s, actor Judge Reinhold, tennis great Martina Navratilova and cycling superstar Lance Armstrong.

The payoff came from sticking with what has become a familiar message, now in its fourth year. Subaru has used it to launch new versions of its bread-and-butter vehicles—the Legacy, Outback and Forester—and the brand's market share has risen from 1 percent to 2 percent, while sales reached an all-time high of 218,000 in 2009, an increase of 15 percent in a year when the industry was down 22 percent. Subaru sales were up another 30 percent year to date through July versus 14 percent for the industry. All that recent growth has vaulted Subaru passed Volkswagen, Mazda, BMW and Lexus in sales.

The "Love" idea gets communicated in different ways but stays connected to Subaru's equity as a four-wheeled snowshoe of a car in rugged weather and dirt roads. In a series of ads themed "Dear Subaru," vignettes are created from letters written by owners emotionally telling their real-life tales of how Subaru saved their lives or lives of their loved ones. One TV spot this year shows a man visiting his smashed up Subaru, which saved his life, in the junk yard. Then he drives away in his new Subaru. 

In some ways, it looks like Subaru is filling the space of emotional safety positioning once owned by Volvo. One new TV ad appears to show a fortysomething father giving the keys to the Subaru to his 5-year-old daughter to drive. The payoff is that she is really college age and he still sees her as a child. The only car he would entrust her to is a Subaru. Mahoney likes to pair these emotional brand scenes with some of the third-party endorsements that keep coming Subaru's way: top safety picks by the Insurance Institute of Highway Safety for all of its cars, and MotorTrend Truck of the Year for Outback.

Unlike a lot of companies, Subaru is not investing big in social media or executing flashy online campaigns designed to get noticed by throngs. A trip to Subaru's Facebook page, which has just 17,000-plus followers (compared with 105,000 for the smaller Lexus which also has an older buyer profile), says a lot about Subaru's universe. There are posts about the Subaru Forester being the official vehicle of the Aflac Iron Girl Triathlon and its AAA award for being top brand among pet owners.

Subaru is not a Super Bowl brand by any means. Instead of buying time on the big game, Mahoney sponsored Animal Planet's Puppy Bowl, which shows a Yule log-like scene of puppies frolicking in a pen. Seven ads were created, each showing dogs in the Subarus behaving as people. Why? "Fifty percent of our owners are dog owners, and they love them like part of the family," Mahoney says.

"Subaru has been practicing what I call the 'Remember Who You Are' marketing strategy, and few marketers in any category do it better," says Los Angeles-based independent marketing consultant Dennis Keene. "Dish up one set of attractive, engaging, sensible set of values and messages consistently to the public over a long enough period, and they will trust your brand and keep coming back."

And not just existing owners. Mahoney's strategy is working on conquesting other brands, which is the only way to grow within a declining auto market. Sixty percent of Subaru sales this year come from stealing drivers from other brands. Mahoney notes that the recent designs of the Legacy, Outback and Forester were spot on for the American market. The new Forester design, launched in 2007 with a much more stylish profile, began attracting more approval from men. The new Legacy sedan and Outback SUV are taller and larger than previous models. And, he says, those models are benefitting from baby boomers and Gen Xers downsizing from truckish SUVs.

But Mahoney is not counting on those cars to sell themselves. When economic calamity hit the U.S. in 2008 and 2009, lots of advertisers reduced ad spending to lower costs. Not Mahoney. He not only jacked up his spending, but he also got more placements because media prices dropped. "I'd say that was our most important decision," he says.

Subaru may be seen as the safe choice by many, but Mahoney has some gamble in him.