Each month, LuxeSF.com profiles a member of The Luxury Marketing Council. This month we talk with Lisa Holladay, Regional Marketing Manager for Mercedes-Benz USA . With a ten state territory under her command, this hard-charging and indefatigable marketer drives a corporate and dealer marketing effort that has helped make Mercedes-Benz the leading automobile brand on western roads and highways.

Lisa Holladay

Regional Marketing Manager for Mercedes-Benz USA

LuxeSF: How long have you been with Mercedes-Benz?

Holladay : For the last nine years now.

LuxeSF: And y our precise responsibilities?

Holladay : I oversee anything and everything that falls within the realm of advertising and marketing. So if it’s traditional advertising via TV placement, radio, print, magazines, I handle it. That’s the largest part of the budget, traditional media.

LuxeSF: Is this the Mercedes-Benz corporate or dealer budget, or both?

Holladay : It’s a combination of the two. For the Bay Area, for example, it’s all nine Bay Area dealers’ group budget. I manage the budget for them as well as Mercedes-Benz USA monies.

LuxeSF: Aside from traditional media, where are you investing your marketing funds… without giving secrets away?

Holladay : The part I enjoy the most is sponsorships. That’s where I have the chance to partner with other companies and really get creative, focus on community events, things like working with the San Francisco Symphony on the Black & White Ball, a concert series in the East Bay , or most recently, the Sonoma Valley Film Festival…again, for those ten states, not just the Bay Area. In addition, there’s internet advertising which is consuming a growing share of the budget. The smallest part of the budget is direct mail.

LuxeSF: Mercedes-Benz vehicles, for those who don’t know the range. What is it?

Holladay : Entry point is the C-Class, ranging from $30,000 - $39,000. The ideal buyer or target is the Gen–X consumer. The objective is to bring younger people into the brand. But you also get the mature, perhaps retired person who has always dreamed of having a Mercedes-Benz but could never justify an $80,000 - $90,000 car, and has now decided, “Before I die, I’m going to own a Mercedes.” Once we began seeing that type consumer coming in, we began offering two different types of C-Classes, a C-Class sport sedan and a C-Class luxury sedan…one meant for the more traditional luxury buyer and meeting traditional Mercedes-Benz expectations, and one targeted for the younger buyer who wants a more aggressive look and feel.

LuxeSF: From the C-Class, I migrate to where?

Holladay : Well it would depend on whether you were interested in a sedan, convertible, sport utility vehicle or coupe. If you stayed in the sedan family, next would be the E-Class, and that’s really our bread and butter.

LuxeSF: In what range?

Holladay : $50,000 up to $90,000, depending on engine size and options. If we stay within the sedan class, next would be the all-new S-Class, the luxury sedan other brands benchmark against. With the S-Class, you’re looking at $87,000 to $140,000.

LuxeSF: Where do we go from there?

Holladay : From there, it’s the cars I consider the sexiest – the convertibles and the coupes. There’s the SLK – the two-door, smaller convertible. And the Big Daddy convertible, the SL. And then we have the first four-door coupe, the CLS. It’s gorgeous. In addition there is a CLK, both a coupe and a convertible and our family of trucks with the M-Class, R-Class and the brand new GL-Class. Finally, there’s the Maybach, which runs anywhere from $400,000 to $500,000 + since those vehicles are built to the client’s individual specifications.

LuxeSF: Who buys one of those?

Holladay : Not the people you’d expect…in other words, not Hollywood celebrities, rap stars and professional athletes, though we do have those as clients. But instead the majority of buyers are businessmen you’ve never heard of, the entrepreneur you wouldn’t recognize. You know, if he walked in right now we wouldn’t recognize him. I don’t recognize the names, and they have companies that you just don’t think of. For example, last week while I was in Sonoma for the film festival, a gentleman and his wife arrived in a Maybach, and trust me, they weren’t “famous.”

LuxeSF: What’s your impression of the Maybach?

Holladay : Luxurious. You know, when we first learned that we were going to market that vehicle under the Mercedes-Benz brand, I thought to myself, “Who would spend $400,000 on a car?” And then you get in it, and all of a sudden you think, “O.K., if I had to get on a plane from San Francisco to Reno , or if I lived in L.A. and I went to Vegas once a week, I’d rather be sitting in the back of that car…”

LuxeSF: It’s that luxurious.

Holladay : It’s that luxurious. It’s absolutely incredible. And you can justify it. You’re able to get so much business done in the back seat. (Smile) There are two versions. There is the version you drive yourself – that’s called the 57 – and then there’s the vehicle that’s meant for a chauffeur to drive, and that’s the 67.

LuxeSF: Every luxury brand defines its customers in a different way -- and I understand there are different levels and price points. But is there a definable personality to the Mercedes customer?

Holladay : It’s definitely somebody who appreciates luxury, but also the quality and the engineering of the vehicles. When we look at our demographics, the age obviously changes based on the vehicle and the price point, but the psychographic profile of the consumer doesn’t change drastically. As you would expect, they enjoy travel, fine dining and fine wine. They like other luxury brands, as far as retail is concerned. They’re wearing Chanel, and other high-end designers. They’re traveling to beautiful places. They’re well-educated. They tend to be married and have children, except when you get into our C-Class audience. Then you’re looking at buyers who may be younger.

LuxeSF: What separates them from the 7 Series BMW drivers, or high-end Jag owners?

Holladay : What’s interesting is that when we look at what consumers cross-shop, Jag does not come up. So we don’t really see Jag as our competition.

LuxeSF: Who do you see?

Holladay : BMW and Lexus. For most luxury consumers, that’s who they’re going to cross-shop. I’m tending to speak a lot about the Bay Area right now, but what I find fascinating from a marketing standpoint is that the competition does change based on what part of the country we look at. In Dallas and Houston, Lexus is much more our competition – part of the reason being that until recently we did not have a broad SUV line-up that could compete with Lexus. So, when you separate passenger vehicles from the light truck segment, you’re talking two different animals. Lexus has typically been our competition when it comes to SUVs, and BMW when it comes to passenger vehicles.

LuxeSF: Go back to the Bay Area Mercedes-Benz buyers. Do they differ in any other way from buyers in the rest of the country?

Holladay : Bay Area consumers are very well educated about vehicles. They use the Internet freely. We have a lot of dealers in the Bay Area so it’s very easy to cross-shop dealers and brands. The Bay Area consumer is much more educated. What I also find interesting, after talking to my colleagues in L.A. is how different the Mercedes-Benz customer is in L.A., much more concerned about appearances -- how big the engine is; how many gadgets it has on it; How does it look, and is it the newest one?

LuxeSF: An extroverts approach?

Holladay : Very. If anything, our challenge in this market, when I came here nine years ago was to start taking some of BMW’s business. BMW has huge market penetration in the Bay Area, much like Mercedes-Benz in L.A. In L.A. we’re the 800-pound gorilla to BMW. What we found in focus groups and heard repeatedly in the marketplace was, “Well, I just thought if I’m driving a Mercedes, it will look like I have more money than I have.” People were very concerned about how others would judge them based on what they were driving. BMW didn’t quite have that same connotation. L.A. is the opposite. People want to be judged by what they are driving.

LuxeSF: G o back to the primary marketing strategies. You put a significant amount of money into traditional media – television, some radio, print, magazines, some newspaper – and then the rest goes into guerilla tactics?

Holladay : The highest portion goes into traditional media because traditional media is still the most sensible way to reach the most people. Incidentally, locally, we’re not in newspaper. The majority of spending in the Bay Area goes into TV and radio because we all know how much time we sit in traffic. It’s going to be interesting to see how that changes with satellite radio. Right now the numbers haven’t been affected.

LuxeSF: So, you’re not on satellite, but you are looking at it?

Holladay : Part of why we’re not in it yet is because I buy regionally, and right now satellite can only be purchased nationally. But we are looking at it and watching the numbers. We run a small amount in magazines, and then after that it’s experiential marketing and the Internet. That’s where I see the most growth opportunity.

LuxeSF: Speaking about the experience, is there some difference in your customer-handling protocol that cuts you from the herd? Is there a difference in the way Mercedes-Benz handles the total transaction?

Holladay : We definitely try to. It’s a very recognizable brand, and it’s held to very high standards. So consumers coming to Mercedes-Benz are expecting a very different experience than they might from another brand.

LuxeSF: What are they expecting?

Holladay : They’re expecting very professional, very personalized treatment, and for everything to be perfect. At the end of the day what our dealers are doing is offering a retail experience. Remember, these are human beings selling these beautiful, luxurious cars. We have the right product…that’s what the company does. And then I market that product. Hopefully I do it well. But really the people we depend on are the dealers, because once someone walks into that showroom, no matter how great the product is or how much marketing I’ve done or how much they love the brand, if they have a bad experience it’s very difficult to get them back.

LuxeSF: But is there something noticeably different about the dealer experience within a Mercedes showroom, versus a BMW or Lexus showroom?

Holladay : W e do try to offer the customers perks such as high-speed Internet while they’re waiting for their car to be serviced. Interestingly, it’s usually not the purchasing and delivery of the vehicle where you start having customer issues, it’s with the servicing of a vehicle. No matter how great the quality of the automobile, it’s going to need service. So you think about how you make that customer feel special when their car isn’t available. Having a loaner vehicle, preferably a Mercedes, is really important, and consumers love that. They’ve come to expect it. At some of our dealerships, you can get a manicure and pedicure while you wait for your car. Others feature a Starbuck’s Café. Or you have a shuttle service to the airport; or you can get your car washed. There are different things the dealers are doing to maintain that relationship with consumers.

LuxeSF: Is the luxury auto sector essentially immune from economic volatility?

Holladay : We like to hope so and historically that has been true.

LuxeSF: After 9/11 and the dot-com bust, what happened to your business?

Holladay : We’ve just had our 12th record year of sales. We did see a definite change after the dot-com bust. During the dot-com heyday, we couldn’t produce enough cars. Salesmen were able essentially to take orders. We had great products and people wanted them, and people had money to spend. It was madness. It was crazy. People would come in and buy multiple cars. Or people would have cars customized and specially built. So, we definitely saw a change as far as how the business was operating. But when you look at the overall vehicle numbers, they haven’t declined.