Tony Sesto on adaptive transformation at BMW Australia
Tony Sesto, General Manager, Marketing, at BMW Australia sits down with host Mark Jones to discuss brand strategy, future planning, and authentically adapting in a market on the move.
If your products take up to 5 years to enter the market it might seem like a monumental challenge to keep up. With trends and fashions changing rapidly, how can you stay relevant in a world that is on the move?
For Tony Sesto, General Manager, Marketing, at BMW Australia, the key is understanding what your customers - or in BMW’s case, fans - really want. Tony explains BMW’s customers are a part of the brand. “They're the ones that really drive that inspiration for us and drive those ideas. And actually, they're the ones that really make us enjoy what we do every day,” Tony says.
It takes a lot to stand out in the automotive market, especially in Australia where there are more car brands per capita than any other country in the world. For Tony and BMW, they ensure they are bringing changes into the very beginning of the design process.
“Not a lot of people know that it does take that long sometimes from what is an idea to actually a vehicle that's driving on the road,” says Tony.
Not only is BMW bringing in changes early, but they are also working to forge new ground with electric vehicles. “A lot of brands are making commitments towards electric vehicles and being able to shift into this new territory is a macro shift that could almost be described as a paradigm shift from combustion to electric vehicles.”
They are leading the charge and transforming with their values at the core. Tony explains, “It's really important what you do, not just what you say or what you're going to do.”
“I think authenticity is really achieved more through actions than words. It's very easy to just make a statement or launch a campaign that tries to tell a story, but if it's not authentic, people will see through you so quickly,” Tony says.
“We reduce where we can, reuse where we can, and recycle as well,” Tony says. “At the very beginning of the design process and product development, we take this into consideration. When we are looking at a new vehicle, we look at things like, can we produce it using fewer materials?” It’s part of BMW’s goal to push a category forward into new territory.
Tony references BMW’s chairman, Oliver Zipse, whose sentiments this process reflects. “Those wishing to use the Earth's scarce resources to drive their business model will need good reason to do so in the future.”
To hear more from Tony Sesto and find out how you can turn your customers into fans - buckle up and tune in to this episode of The CMO Show.
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Transcript
Participants:
Host: Mark Jones
Guest: Tony Sesto
Transformation doesn’t mean your values and principles need to change.
Your core values should drive your transformation.
Although different people will experience different things from your brand, there doesn’t need to be a sacrifice to adapt to a changing world.
Authentic transformation is achieved through actions rather than words. Those that do best ensure that changes are customer-centric and happen at the beginning of any process - they are adaptive rather than reactive.
So if your products can take up to 5 years to enter the market, how can you stay relevant in a world that is on the move?
Hello friends! Mark Jones here. Great to have you with us on The CMO Show.
Today we have a great conversation with Tony Sesto, General Manager, Marketing at BMW Australia.
I spoke to Tony about the accelerated changes happening in the automotive industry right now. We discuss all things electric vehicles, automation, and sustainability. For a brand like BMW, how do they retain their core principles and adapt to a ‘brand new world’?
This is definitely one for the car enthusiasts out there, but also really relevant for any marketer in B2B or B2C who is interested in how brands tell stories, deal with change and plan for the future - there’s a lot to learn from how car brands market themselves and their vehicles.
Let’s go to my conversation with Tony Sesto.
Mark Jones:
My special guest today is Tony Sesto, General Manager, Marketing, at BMW Australia. Tony, so great to have you with us.
Tony Sesto:
Hi Mark. It's a great pleasure to be a part of your show. Thank you for having me on.
Mark Jones:
Now, I've got to say, I've been really looking forward to this conversation because I don't get to talk about cars a lot and I'm a bit of a car nut. And so it's great to be able to talk about BMW of course, and the future of the industry.
But let's start at the beginning, it's often the case in industries like automotive, it attracts passionate people. So I just wanted to get stuck into your role. Let's go back to the start, your first job at Suzuki. Just how keen were you to get this gig?
Tony Sesto:
Well, first of all Mark, it's always nice to meet another car nut. How keen? Well, just to give you some background, I think I've been riding motorcycles since I was four years old, and my first car was actually a 1966 Mustang that I imported myself out of the USA when I was only 16 years old.
So to probably say I had an obsession with bikes and cars at a very young age is an understatement. I remember a few weeks before graduating from university where I was doing my marketing degree, one of the lecturers actually gave the class some advice in terms of entering the workforce.
Tony Sesto:
And I remember she basically said, don't take the first job that you are offered, look around and make sure that it's right for you. The one thing she didn't mention, however, was that out of all the countless resumes that you send out, just how many rejection letters or no responses at all that you would get.
Tony Sesto:
And after a while, after becoming so frustrated, one of the things I decided to do was to gain experience, I would work for free, but if I was going to do, it had to be in an industry that I absolutely loved, which was motorcycles and cars. So I called every motorcycle OEM that was based in Melbourne, and I actually offered to work for free in their marketing department doing virtually anything that they wanted me to do.
And I was really fortunate because Suzuki took me up on this offer and that's what really kicked off my career that I enjoy so much now. So I've always been a really big believer in, if you want something really bad, there's a way that you can always get it.
Mark Jones:
I just think that's a great story. So what happened then? You've worked for both bike and car companies, can you quickly skip us through the years and how you went from that offering yourself for free scenario into this role that you've got today?
Tony Sesto:
Yeah, absolutely. So I was with Suzuki for six months and another role came up at Honda, and I was actually with Honda for 10 years. And during that time, I progressed through seven different roles, through marketing, sales and after sales, which actually gave me a really good view and understanding of the overall business and just how important each of these departments played in the overall brand and brand experience for customers.
And then following on from that role, I was headhunted to join BMW and actually help launch their first sports bike, which we did and we actually doubled sales for the brand within three or so years. Then I moved over to the car side and I was lucky enough to be heading the mini brand for both Australia and New Zealand.
And I did that for a few years and we increased sales by more than 50% with the launch of the MINI Countryman and MINI Clubman. And then following on from this, I moved over to the BMW car side to head up the marketing department, which is really your dream job, that I've enjoyed for the past three plus years.
Mark Jones:
That's fantastic. Hey, so you talk about the growth there just by the way briefly, what were the key tools or the strategies that you employed to get that sort of growth that you mentioned?
Tony Sesto:
It was really just strengthening the brand, it was putting a very strong marketing plan together, which looked at the product portfolio that we had, the price positioning of those products, our communication message out to the market, the channel mix that we were selecting, and we were also really fortunate that we had a very passionate deal and network, and I had a really passionate team that were working for us.
Mark Jones:
Now, I got to say, one of the reasons I was so excited to talk to you is because I've always believed that any marketer, whether it's in B2B or B2C marketing can learn from the way car brands tell stories, and particularly the way that they think about the future and make plans for the future.
I don't know if many people would realise that, for example, it takes about five years or so for a car to go from the drawing board, or these days, a digital drawing board out to production, it takes that sort of time to bring these complex machines to life. So I'm interested to know from your perspective, what's the most challenging aspect of marketing vehicles?
Tony Sesto:
Yeah, absolutely. And you're right, Mark. Not a lot of people know that it does take that long sometimes from what is an idea to actually a vehicle that's driving on the road. But in terms of the challenges, I think standing out from the crowd in an oversaturated market is definitely a big one.
In Australia, for example, we have more car brands per capita than any other country in the world. So being able to stand out is definitely a challenge. I think also, staying relevant in a world that is just changing so rapidly. And what is relevant today is not necessarily going to be relevant or in trend come tomorrow.
And to your point, where it takes five years to get a car into market from an idea onto the actual road, it makes it hard sometimes to be able to actually deliver something in time. Maintaining loyalty is also a challenge. And yourself being a car enthusiast, you know that these people like to be driving the latest and the greatest all of the time.
And I think you could also argue that consumers are probably not as tied to brands these days as what they have been previously. And I would say another challenge would be pushing a category forward into new territory. And sometimes that involves a change in and forging new ground, for example, electric vehicles, which is a new ground for so many people at the moment.
Mark Jones:
Yeah. And I actually want to spend a bit of time talking about electric vehicles in just a moment, but if I'm just sort of reflecting some of those ideas that you've just presented, it seems that you really do have to, I guess, literally and metaphorically keep your ear to the ground. We talk a lot about being customer centric, about really knowing what people want.
But you've actually touched on quite a number of things there, right? So differentiation was one, relevancy, which is, if you like part of the trends and fashion, what do people experience through a car? Loyalty is king in marketing, is another thing. And then innovation, which is that last point.
So that's four big territories of sort of strategic thought that you've got to kind of constantly have running. I wonder in that context, what's your personal sources of inspiration, where do the ideas come from? Where do you get your inputs for those things that you just spoke about?
Tony Sesto:
I think you get them from so many different areas, Mark. You get them from understanding who your customers are, understanding what your customers want, and sometimes I prefer to use the word fan instead of customers, because really, that's what our customers are. They're BMW fans who love to be part of the brand and they're the ones that really drive that inspiration for us and drive those ideas. And actually, they're the ones that really make us enjoy what we do every day.
Mark Jones:
Yeah. Which means that the forums and the feedback you get from people reacting to cars become such a big thing, right? And I guess also filtering that through some of the emotion that comes along and just to that point, by the way, I used to own what we call a BMW MINI. So the one that was actually made by BMW and I was very much a fan. So I loved being part of all that community and commenting on it. What does it take to actually properly tap into that? Because you are looking for people who think critically, not just have this over sort of emotional reaction, if that makes sense.
Tony Sesto:
I think you are absolutely right. Our brand does have product, which evokes emotion and awakens emotion, and a really good example was the launch of our M3 and M4 earlier this year. And it was so amazing to just see the look on people's face, who first had the opportunity to experience these cars firsthand as part of their BMW driving experience, track days. Just to see the look on people's faces when they would do one lap of Phillip Island in one of these cars, they didn't have to say anything, the look on their face just told the complete story.
Mark Jones:
Yeah. And by the way, those track days and creating those driving experiences, I would imagine over the years have driven an incredible number of sales, because when you go from, if you like thinking about a car to actually experiencing it, that's why so many brands over the years have said, it's all right, you can take it home for the weekend or go for a big drive in it. Once you actually have that feeling, that's usually when the sales take place, right?
Tony Sesto:
It's a really important part. We always pride ourselves on BMW being the ultimate driving machine. And we do that because it is so true. Once you do experience the drive of a BMW, there's no going back.
Mark Jones:
Do you think marketers in general have lost sense of the importance of that real lived experience? In other words, the touch feel, the tangible expression, it's become so digital these days and we think about customers in a digital journey. How do we start to make things more real? Is it part of the marketing mix that we're losing a bit of that at the moment?
Tony Sesto:
Well, I think it's still a very important part of the marketing mix for car brands. The experience is what's so important with cars. People still love to really be interactive when they're purchasing a vehicle and experiencing a vehicle. I think what we need to do Mark is just be able to meet the needs of customers, whether it's online or offline and just make sure that we are delivering that customer experience that our customers expect these days.
Mark Jones:
It's a great point. Let's talk about EVs in the future of the whole industry. It's actually, I think a very historic point in time that we're all experiencing where this change around moving towards electric vehicles is very much in the news.
We're seeing the number of manufacturers of EVs increase and it's become a big part of the narrative more broadly in terms of the environment, what we think about the future and so forth. So here's a brand that's right in the middle of all of that transformation, how do you hang onto the core principles of the brand in that context?
How do you make sure that there's that? I think you mentioned the pure driving pleasure aspect of what it means to have a BMW. How do you make sure that that translates and carries across? Because I think one of the fears of fans is that they're going to lose that feeling, that experience, that we've been talking about.
Tony Sesto:
Yeah. And look, I think with moving to an electric vehicle, there doesn't need to be any sacrifice with the performance of the vehicle. With BMW, for example, like I mentioned before, Mark, we've prided ourselves on being the ultimate driving machine. Whether that's driving an internal combustion engine, a BMW hybrid, or whether it's driving an electric vehicle, you don't need to sacrifice the drive of that car.
And what we do is, we just make sure that what messages we're putting out to the market are actually relevant and mean something to those people. So for example, joy in performance may mean something different to one person, to what it means to someone else, performance, for example, may be speed or sound, where to someone else it may be efficiency for another way of looking at it.
Mark Jones:
So in other words, you make sure that you find ways of connecting those emotions into the new, well, particularly the messaging around the new vehicles
Tony Sesto:
Correct.
Mark Jones:
The new EVs. I think that's a really key thing. So don't forget your messaging in the experience as well, it is a big deal. I also know too, by the way what I particularly loved is the comparison, particularly at the drag strips where they'll line up an EV of any brand next to some sort of big American V8 or something, and the EV sort of races off into the sunset, leaving it for dead.
Those sorts of things really, they're really powerful points of communication, because I think that's been, if you think about breakthroughs, finding those issues or points of belief, for example, in that case, like if they're slow or they won't be as good, quite literally they're faster and in your case.
So it'll be interesting to see how those drive days, the experiences start to allay any of those concerns customers might have. And I should say this, I'm thinking through a marketing lens, right? Through the communications and the messaging lens, because I'm already sold on EVs, by the way.
Tony Sesto:
Right.
Mark Jones:
I'm already there. But it's really thinking through, well, as marketers, how do we make sure that we bring everybody with us? Because one of the things I do know about fans and you reference a 66 Mustang, which by the way, snap again, is one of my favourite cars, in fact, my favourite car in the whole world too. There can be a yearning for yesteryear, hanging on to how things have always been.
We've seen that with the MINI market, which was, oh, I remember MINIs before they were owned by BMW. It's so important that we bring customers with us into the future and create a new experience and a new passion around some of these new brands. I think that's what's so fascinating about this space to me.
Tony Sesto:
Absolutely Mark, and to the points that we were talking about earlier, I think the best way to bring people along on that journey is through experiences. And the best way for us to do that at BMW is actually by giving people those opportunities to experience these new electric vehicles.
Mark Jones:
Yep. Hey, now, you spoke before about this size of the market and I wanted to pick you up this around the context of pricing and positioning. Another thing that we play with a lot in marketing of course is the four Ps, and one of which is price. How has that been thought of in your context? Because obviously it's a premium brand, there's pressure to bring down the cost of EVs over time, how are you getting that balance right?
Tony Sesto:
Well, you're right. There are some initial barriers to entry and cost is one of them. And we've picked up on that as well through a lot of research that we've done locally. But I think this is technology which is still new and the world is still adapting to it. And we are seeing some good electric vehicle incentives that each of the state governments are now starting to release. And they're really good incentives for people to take advantage on.
So over the years, owning an EV will become a cheaper option. For example, even from the BMW side, there's a plan to introduce 25 electrified models in the product ranges by 2023, and 12 of these will be fully electric. So these vehicles will be offered at different price points that will cater for different people in different segments.
Mark Jones:
So literally, in less than two years, there'll be 12 new EV models from BMW that you can choose from.
Tony Sesto:
Yeah.
Mark Jones:
I don't know about you, but I think that's pretty astounding.
It's just interesting to see that, because I think again, as marketers, we really need to be strategists and think about what do people believe about the future of the sector? Will it be owned by the EV pure plays, or will the existing established players with huge pedigrees be able to reposition and to really take a leadership stance on some of these important issues? Interested in how you've processed some of that thinking from a strategic point of view with maybe with your colleagues in Australia and around the world. How do you think about that?
Tony Sesto:
Yeah. And just to add on to that point as well, I think a lot of brands are making commitments towards electric vehicles and being able to shift into this new territory and you're right, it is a macro shift that it could almost be described as a paradigm shift from combustion to electric vehicles. To give you an example, two brands within the BMW group, MINI and Rolls Royce have already made commitments to be fully electric by 2030, which is not too far away when you think about it.
Mark Jones:
Oh, wow. A fully electric Rolls Royce would be something else. They're already quiet, right? Okay. Well look, let's talk now more broadly about the environment and sustainability. How is BMW, as a brand, transforming across its whole organisation? You mentioned two there, but I'm interested, thinking about your supply chains, thinking about that broader context of the environment and sustainability, how does that factor into your storytelling and maybe increasingly over time, will it factor into your storytelling?
Tony Sesto:
It is so important for the BMW group. Sustainability is literally at the heart of everything that we do across the complete supply chain with the environment, with social responsibility and even governance. And the group has set a very clear objective to produce the world's greenest vehicle and actually achieve a climate business model. And that's across our whole value chain by 2050.
And one of the quotes that I really like, Mark, that comes from our chairman of the board, Mr. Oliver Zipse, that I want to share really sums it up nicely. And he says, those wishing to use the Earth's scarce resources to drive their business model will need good reason to do so in the future.
So I think that is a very powerful statement within itself. And there are so many things that we are currently doing at BMW to be able to sort of close this loop in terms of resources, for example, and one of the programmes that we have is what we're calling the circular economy, where we actually look at everything that we do, and we rethink the way we do it.
We reduce where we can, reuse where we can, and recycle as well. To give you an example of this, at the very beginning of the design process and product development, we take this into consideration. So when we are looking at a new vehicle, for example, we look at things like, can we produce it using fewer materials? We're also conscious, in coming back to your original question of how important this is in our messaging.
And we know that for some of our customers, it's really important because these are the brands that they want to be associated with. So we make this part of our storytelling such as we have with the introduction of our new electric vehicles, which emit zero emissions and have a focus on sustainability, like I just mentioned, across the whole value chain.
Mark Jones:
You've mentioned there some of the messages around launching new vehicles into market, do you think brands like yours will find a space for some more expansive storytelling around the environment, because I think that there's an appetite for the fans, understanding how that works to use your example, like reduce, rethink, reuse, and recycle.
Can I see what the processes that you went through? Can we look at your recycling programme? Take us further into the story. Is there going to be, you think, an appetite for that as far as driving loyalty and those sorts of factors?
Tony Sesto:
Yeah, I really do, Mark. I think authenticity is really achieved more through actions than words. It's very easy to just make a statement or launch a campaign that tries to tell a story, but if it's not authentic, people will see through you so quickly. So I think it's really important what you do, not just what you say or what you're going to do. Coming back to the BMW values, authenticity is one of our fundamental values at the company.
Mark Jones:
Yeah. That's good to hear. Well, look, I think you're quite right. I mean, showing us what you're doing, is the key to all of that. Now, I wanted to move to brand strategy, because well, it's one of my favourite things, but it's also connected to this positioning that we're kind of talking about in the context of EVs and the environment.
I'm interested to know what you think about this idea of BMW being a master brand and then you've got these sub brands of course, which exist underneath that. So the 3 Series, for example, the 5 Series, the sub brands, they're different names to the core BMW brand, of course.
And I've just found through my experience, this has become a big conversation amongst senior decision makers who are trying to make sure that they're constantly connected in the right ways to their customers. So interested to understand how you treat the master brand sub brand dynamic at BMW.
Tony Sesto:
BMW is the master brand. And as you referenced, we also have sub brands and these are BMW i, electric vehicles and our hybrid and BMW M. However, the master brand, which is the BMW, will always take priority in whether it's our messaging or our creative. So across all of our communication, across all of our creative, the master brand or the BMW Roundel will always be the lead.
And then that will be followed by the sub brand, be it BMW i, BMW M, or as you referenced the model series, whether it's a 3 Series or 5 Series, or an X5, for example. And the master brand is really where the equity is. So if you want people to trust and fall in love with what you do, it's your master brand that you really want them to fall in love with.
And why something like this, for example, well, coming back to EVs is a really good example. If you've got people that are in love with your master brand, then it's quite easy to venture into new segments or new products, because once you have that trust of your customers, you've already got a customer base to start with. And that's exactly what we're finding right now with the introduction of new electric vehicles that we're putting out into the market.
Mark Jones:
Yeah, you're quite right. That product development and cycle and release is so key. And I'm also interested in that context, is there any pressure from within, you mentioned the BMW M, this has been my experience in all sorts of companies, it doesn't matter what, you'll get departments or products where they're just so excited for what they do within the broader context of things.
Why can't we make more fuss about what we do in our little sphere of the broader company? Do you get that sort of pressure and how do you deal with it? Because sometimes effectively, they're challenging the status of the master brand, why don't we make M bigger, don't you know that it's the future of everything? I'm just projecting it.
Tony Sesto:
Well, Mark, I think you may be listening in because they’re daily conversations that we have, but again, it comes back to the master brand and the core of BMW, the ultimate driving machine, it doesn't matter whether it's an M or an i, a 5 Series or a 3 Series. It's still the ultimate driving machine, which is our core value.
Mark Jones:
Yeah, no, that's right. I think that they can become some hard conversations because people ultimately need to follow along for there to be that consistency in the marketplace, and it can be something I've experienced, CMOs have to educate leaders across the organisation. Is that something you find yourself doing?
Tony Sesto:
I wouldn't say educating, I would say, taking people on the journey to the journey-
Mark Jones:
Right. Okay.
Tony Sesto:
... To that point.
Mark Jones:
Tell me about emotion. Let's move to that, and personal value. When we see a personal benefit to a product and we have that emotional connection that we've been talking about, that just drives the excuse again, we are using a lot of car references, aren't we? That idea that I'm connected to this brand for a really long period of time, because I'm so emotionally connected to it.
How do you think about that in the context of maintaining loyalty and attention over a long period of time? Again, complicated marketplace, got to get that cut through, but ultimately at the heart of it, it's emotion, how do you build that consistently into your marketing strategies?
Tony Sesto:
You do that by staying true to the brand and the brand values. And again, we spoke before about experiences and for us, it's being able to deliver joy through those experiences. And by doing that, you create fans and then you actually get to a point where your fans are the ones telling the stories for you to other people.
And when you have cars like BMW that evoke or that awaken these emotions, it's a really easy thing to do. For BMW, we won't sacrifice the joy of driving a BMW or its performance. It's the heart of what we do. And we aim to deliver this. And we have since we started building cars 100 plus years ago, and we planned to do this for as long as BMW continues to make cars.
Mark Jones:
So I often speak to marketers and leaders within organisations and say to them. You really need to own one emotion, that idea of one word, one emotion, one feeling that consistently is experienced by all of your customers. I heard you say joy there, is that something that's talked about and broadly understood within the organisation?
Tony Sesto:
Absolutely. It is the core of BMW, Mark. And personally, I've really loved the word joy because joy can mean so many things to so many people, but it's one of those emotions that is just so aligned to the ultimate driving machine and the experience that it's able to deliver to our BMW fans.
And again, do you find yourself having to police that if there's pressure to explore other emotional territories?
Tony Sesto:
I wouldn't say we have to police it, it's actually a really easy one to get people over the line with, because that connection to joy and emotion and evoking that emotion is really easy to get across the line.
Mark Jones:
It's really great to see and I think hopefully inspiring for other people too. So Tony Sesto, General Manager, Marketing at BMW Australia. Thank you so much for being my guest on the CMO Show.
Tony Sesto:
Thank you, Mark. I really enjoyed it.
Mark Jones:
So that was my conversation with Tony Sesto.
I think BMW Australia is a great example of a company that is determined to stay true to its core purpose while working to authentically adapt to a changing marketplace.
They are ensuring they are bringing changes into the very beginning of the design process and are working hard to stand out from the crowd in an oversaturated market.
It’s great to hear they have set a clear objective to produce the world’s greenest vehicle, and achieve a climate-neutral business model across the entire value chain by 2050.
I also loved that Tony imported a 1966 Mustang from the States when he was 16 years old! There’s certainly a lifelong passion and obsession coming through there.
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