2011 Ford Explorer: Winning Back Explorer Owners and Then SomeBy Michelle Krebs October 20, 2010
For the redesigned 2011 Ford Explorer to be a success, Ford must win back current Explorer owners and add some new buyers as well.
Ford has much to build on with the new Explorer. Virtually everyone knows the Ford Explorer name. The Explorer's ownership base is vast - 4 million strong. And every year, a big chunk of those owners returns to the Ford dealership to trade in their vehicles.
The problem: too few drive away from the Ford store with another Explorer, or even a Ford model at all. They cite poor fuel economy as the top reason for opting for something other than another Explorer, Ford executives admit.
With the all-new, car-based 2011 Explorer, which goes into production in December and officially launches in early January, the automaker has tried to eliminate such "dissatisfiers" to keep Explorer owners with Ford and also lure new ones from competitors.
Tapping the Explorer's Existing Owner Base
Currently, about 4 million people own Ford Explorers. Every year, 140,000 of them return to Ford showrooms to trade their Explorer. But only 35 to 40 percent of them buy another Ford, according to Ford's own data.
"We're not happy with those numbers," admitted Amy Marentic, Ford group marketing manager of cars and crossovers, during the first media test drives of the new Explorer this week in Michigan. "We want to double that number."
Edmunds.com's data shows that in 2005, about 19 percent of Explorer owners traded in their vehicles for another Explorer. That percentage slid to a mere 7 percent in 2009, a year when SUVs were particularly out of fashion. In 2010, the percentage inched up a point due to stable gas prices and hefty incentives that have caused SUVs generally to regain some of their lost ground.
Ford's Edge crossover is capturing some disillusioned Explorer owners, as does the compact Escape, at least to some degree. Edmunds.com data shows the biggest percentage of Explorer returnees - 14 percent of them - also consider the Edge.
Still, that's not enough to put loyalty at the same level it was five years ago.
Edmunds.com's data shows in 2005, 41 percent of Explorer owners bought another Ford model, if not an Explorer. In 2009, that percentage had dropped 10 points to 31 percent. So far in 2010, it has edged up to 34 percent, largely on the strength of the freshened Ford Edge.
To Ford's chagrin, a bigger percentage of Explorer owners now are driving off the dealer's lot and heading to a Jeep store to check out the Grand Cherokee, which was totally redesigned this year. Edmunds.com data confirms the most interaction in terms of cross-shopping and reverse cross-shopping in the midsize SUV segment occurs between the Explorer and Grand Cherokee. Aside from the Ford Edge, the Grand Cherokee is the most cross-shopped SUV by Explorer owners.
Ford Explorer owners also consider the Toyota 4Runner. General Motors' new crossovers, the Chevrolet Traverse and GMC Acadia, appear on their shopping lists as do the Honda Pilot, Toyota Highlander and Acura MDX.
New Explorer = SUV for 21st Century
The market for midsize SUVs remains, but it is significantly smaller than it was five years ago, and so too are Explorer sales.
After it was introduced in 1990, the Explorer quickly shot to the top of the sales charts, becoming America's best-selling SUV - a spot it held for more than a decade. By the mid-2000s, Explorer was left in the dust by crossovers like the Honda CR-V as well as Ford's own Escape and Edge.
Ford has shifted the way it thinks about the segment, combining traditional SUVs and new-age crossovers. Combined, the two categories currently account for a third of all vehicles sold in the United States, making it a critical segment in which to participate - and perform well.
The company also recognizes it has to play differently in the segment. Ford executives admit the No. 1 reason shoppers reject the current Explorer is fuel economy.
"Ford must send the message that the new Explorer isn't an old school, body-on-frame design, but a more modern crossover," advised Edmunds.com Analyst Ivan Drury. "That message might repel the traditionalist, but there aren't enough of them to keep that segment alive anyway."
And indeed, that's precisely how Ford is positioning the new Explorer.
At this week's presentation and test drive of the new Explorer held at Ford's proving grounds in rural Romeo, Mich., Jim Holland, chief engineer for the new Explorer, noted that while the old Explorer defined the SUV of the 20th Century, the new Explorer had to be reinvented as the SUV of the 21st Century.
To that end, Ford has shifted the Explorer from a truck-like body-on-frame structure to one that shares its underpinnings with the Ford Taurus sedan. The two vehicles are being assembled in the same plant in Chicago. In addition, Ford will no longer offer a V8 for the Explorer. Rather, the '11 Explorer is equipped with a standard 3.7-liter V6, while a 4-cylinder enhanced by the company's EcoBoost technology is arriving after launch.
That means fuel economy improves. Ford won't yet provide estimates; saying numbers will be available in another month or so after the U.S. Environmental Protection Agency certification. Nonetheless, Ford execs promise the Explorer will have "class-leading" fuel economy, better than 23 miles per gallon on the highway.
More details of the new Explorer's mechanicals and features was previously reported on AutoObserver.com in July when Ford held background sessions on the vehicle.
An Explorer by Any Other Name
Though the new Explorer is a different animal than the current one, Ford decided to stick with the Explorer name, a moniker that's been around for 20 years and is widely recognized.
Ford's Marentic said "Ford Explorer" has a 96 percent familiarity score among consumers. It is the second-most recognized nameplate in the Ford family - second to Ford F-Series and more recognized than Ford Mustang. And, despite the negative publicity surrounding quality issues with the Explorer and its Firestone tires, consumers generally have positive feelings toward the Explorer, Marentic said.
"It's a name that should be treasured and treated specially," she added.
A Different Marketing Approach
The reinvention of the Explorer called for a fresh approach to marketing, Marentic said, building on the highly successful marketing effort of the Ford Fiesta that leveraged social media, including Facebook.
Yet, the marketing job with Explorer is significantly different than it was with Fiesta. With the Fiesta, Ford had to establish a new name and a new kind of car - a small car unlike any the brand had ever sold. With Explorer, the message must convince buyers the classic Explorer has been revinvented.
For that, on July 26, Ford launched the Explorer - online and live. Ford executives fanned out across the country for live launches of the crossover in nine cities. Ford America President Mark Fields, for instance, did the Southern California launch, that included at stop to Edmunds.com's Santa Monica headquarters. On Facebook, the Explorer had done a strip tease on its fan page - taking it all off on July 26.
Ford's approach was wildly successful and serves a case study for how to do an online new model launch. On that single day, Ford Explorer was estimated to have generated 110 million impressions; it was No. 1 on Facebook and No. 2 on Google, Ford said.
A half-million visitors went to the Ford Explorer website, said Marentic. Of those, 50,000 spent the five to 10 minutes required to build and price a new Explorer - 70 times the normal daily rate, which, Marentic admits, wreaked havoc on the site.
Edmunds.com's data substantiates the Explorer's launch success. Consideration for the Explorer spiked sharply and immediately shot to the No. 1 spot for shopping consideration on Edmunds.com, knocking out the Hyundai Sonata, which had held the spot for the previous few months.
Consideration is an Edmunds.com measurement of shoppers who dig into Explorer pages on the site; it is a strong indicator of the effectiveness of marketing.
After the first initial rush, however, Explorer consideration on Edmunds.com dropped back and Sonata regained the No. 1 position. Now the challenge for Ford will be to boost Explorer consideration as the on-sale date approaches.
Explorer Launch Next Chapter
Leading up to the Explorer arriving in dealerships in January, Ford is running through mid-November what it calls the All Access Tour. Mobile tours of Explorers are visiting 44 cities in 25 states to introduce the new SUV to consumers.
An interactive component includes consumers voting and uploading videos to make their case on where an unscheduled tour of the Explorer should occur. There's a celebrity hook with the Extreme Home Makeover television show, which Ford already sponsors.
And in some cases, Ford is making it up as the launch proceeds. A soccer game at the University of Missouri, at which the Explorer was to appear, was canceled, disappointing a couple of folks who wanted to see the vehicle. Ford took the Explorer to their homes.
The official Explorer launch Jan. 11.
Analysis for this report provided by Edmunds.com analysts Ivan Drury and Jeremy Acevedo, who also created the graphics.
Photos by Ford Motor Co.
1 - The 2011 Ford Explorer retains its rugged SUV looks.
2 - The 2011 Ford Explorer features a comfy, car-like interior.