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20100201 multi channel sales approach for premium autos

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  • 1. AUTO M OT I V EMulti-Channel Sales Approachfor Premium Autos: Raising CostEffectiveness in Marketing and Sales
  • 2. Editorial The automotive industry in 2009 is without any doubt in the middle of one of the most serious crises it has ever experienced. The slump in sales, imminent insolvencies and significant excess capacity all combine to make it clear that revolutionary changes in this sector are on the agenda. One of the areas where such change is “waiting to happen” is automotive retail. The structures and business models for automotive marketing and sales have remained somewhat static, despite the rising heterogeneity and complexity of the buyers. A spate of developments indicate that the prerequisites for change are already present in the market, including target groups which do not feel properly addressed, low margins on the side of the dealer, high sales costs on the side of the manufacturer and an increase in intra-brand competition. Companies who introduce radical innovations within the distribution system can break out of this stagnation, and generate lasting competitive advantages for themselves. To guide this re-orientation in the automotive industry, we can take a look at other branches where radical change in the sales channels has already taken place. Following the example of these branches, we want to show in this study how the establishment of a multi-channel sales approach, with a clear and segmented sharing out of activities between the OEM and the dealers, is a strategy option for working markets comprehensively and efficiently. The complexity of customers’ requirements for purchasing cars can be met by managing an integrated range of sales channels matched to the diversity of customer segments. Many automotive companies have untapped potential in the market which could be exploited as a result of such an approach, which would then create a clear competitive advantage for them. With this study KPMG hopes to make a stimulating, if not provocative, contribution to the dialogue within the auto industry over changes in marketing and sales. I wish you good reading. Dieter Becker Managing Partner Global Head of Automotive © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 3. Table of Contents Executive Summary ..............................................................................................2 Introduction ...........................................................................................................4 Part I: Empirical Analysis.......................................................................................5 1 Twelve sales channels ......................................................................................6 2 Prospects for success and further development of sales channels...............11 Part II: Evaluation and Scenarios........................................................................13 3 Suboptimal integration of the sales channels ................................................14 4 What a multi-channel sales approach needs to do .........................................16 5 Four scenarios ................................................................................................18 Conclusion: Raising Cost Effectiveness.............................................................28 © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 4. 2 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and SalesExecutive Summary To address the wide range of individual Scenario 1 – Retail trade preferences amongst car buyers regard- ing the purchase process, this study In the business-to-consumer segment, has identified twelve separate sales the manufacturer focuses predominantly channels: on the brand image, whereas the other elements of the purchase process are 1 Sponsoring looked after by the dealer. In short, the manufacturer focuses on marketing for 2 Factory sales the end users, the dealer focuses on sales. In contrast, business customers 3 Customer contact in the context are serviced at nearly every stage by of servicing the auto the OEM. This business model is above all prominent in the markets for food 4 Dealerships and household articles. 5 Cooperations with non-auto brands such as fashion or electronics Scenario 2 – Cultivating strong brands 6 Internet website of the OEM As the owner of the brand name, the 7 Internet website of the dealer manufacturer plays a central role when it comes to cultivating the market for 8 Automotive “shopping malls” new customers. The dealer profits to a great extent from the image building 9 Events carried out by the manufacturer and his efforts with respect to canvassing new 10 City showrooms customers. This gives the dealer the space to concentrate above all on the 11 Brokering from non-auto contact to existing customers and on companies, e.g. a jeweller improving the relations management with respect to the customers already 12 Recommendations from third known to him. It is often the case with parties for new customers products backed by strong brands, such as fashion or upmarket consumer The authors of this study present four electronics, that the manufacturer culti- scenarios for customer segmentation vates the brand image and strongly and the corresponding structures/ promotes the acquisition of new cus- allocation of activities between the tomers. The dealer on the other hand OEM and the dealers in managing the concentrates in this case primarily on twelve channels accordingly. customers who are already committed to the brand. © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 5. 3Scenario 3 – Purchase process The assessment of the success pro- Raising cost effectivenesswith or without personal sales spects of the scenarios shows a clearsupport split on the one hand between OEMs The use of the internet as well as the and dealerships in Scenario 1, which coordinated allocation of resources inIn this scenario, the manufacturer is comes closest to the current arrange- the sales channels, as provided for inresponsible for customers who need ments in the auto market. each scenario, taken together result inno personal support, while the dealer an increase in cost effectiveness. Ulti-can focus his resources on his specialty, Scenario 2 on the other hand sees a mately, the internet as a sales channeli.e. exactly those customers who do functional distinction between the OEM is the most cost-efficient instrumentwant such support. It is possible in this and the dealerships. While OEMs handle that can be employed to communicatecase to draw a parallel to the travel the overall image as well as the link relevant information and to handle salesindustry where the customers can between specific product images and processes. In the medium term, how-decide whether they make their own their target groups, the primary role ever, it is not to be expected that allbookings on the internet or make use of the dealer is managing customer customers will make exclusive use ofof the personal assistance offered by relations, sales and after-sales steps in the internet as a sales channel. Thus,a travel agency. the purchase process. Thus, Scenario 2 the segmented use of a range of sales seems to make the most sense for the channels, in a clearly defined sales premium segment. approach for manufacturer and dealerScenario 4 – Product-specific alike, enables a systematic and cost-added value in the automotive Scenario 3 is the most radical departure effective use of resources. Clearlytrade from the current business models, and defined fields of action, with the is based primarily on internal, i.e. cost, elimination of redundancies and theThis scenario works on the premise that considerations. Within the context of exploitation of synergies, foster thethe OEM establishes a specific channel Scenario 4, the OEMs would benefit development of specific competencesmix via which he processes all sales from managing their own distribution and serve to raise cost effectivenessactivities independently, i.e. without channels along the lines of Scenario 3, in a comprehensive manner.incorporation of the dealer. Retail bank- segmenting customers according toing, where the “producers” (i.e. the the costs of managing them.banks) manage directly their own saleschannels, is an example where productknowledge is decisive for the genera-tion of an added value in the sales pro-cess for the customer. This scenario isconfigured such that manufacturers inthe automotive industry employ exactlytheir product knowledge in the sameway as retail banks do, to handle theentire distribution on their own. © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 6. 4 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales Introduction This study was prepared by KPMG Structure of the study together with the International School of Management (Sebastian Waldorf, In Part I, the empirical results of the assisted by Professor Dr Ralf A. Brickau) study are presented. The twelve sales between January and April 2009. The channels identified as a result of the© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliatedmember firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG Internationalhave any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG results are based on a combination of interviews are described and evaluated.with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other desk research and discussions with In the second section of Part I, the experts. A total of eleven Managing prospects for success in managing Directors of dealerships spread over each individual channel are presented. the entire premium segment in Germany were interviewed. The empirical analy- In Part II, KPMG evaluates the empiri- sis was rounded off by discussions cal results. The suboptimal integration with experts from institutes and asso- of channels is briefly touched upon ciations such as the Institute for here. The statements arise in part from Automotive Business (IFA), Global comments made in the interviews and Insight and the German Association of in part from other market observations the Automotive Industry (VDA), as well on the part of KPMG. In the second as an expert from AutoScout24. section of Part II, the demands made Because of the different geographical on an integrated multi-channel sales locations and dealership sizes within approach are portrayed, derived from , the German premium automotive mar- the interview results and from the rele- ket, the dealers interviewed represent vant literature. In the third section of an excellent cross-section for ensuring Part II, KPMG presents four scenarios reliable results. for a multi-channel sales approach. Although the structure of the scenarios is taken from other consumer branches, , the content is derived from the inter- views. This section is summed up withInternational. a conclusion related to raising cost effectiveness in the car trade.
  • 7. Part I: Empirical Analysis© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated ,with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or othermember firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International ,have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMGInternational.
  • 8. 6 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales1 Twelve sales channels These days, it is possible for a premium such an event and can be approached manufacturer to market his products during its course. All-important is that via different channels and in doing so, the person who makes initial contact to address his customers in a very indi- with the customer is the one who will vidual way. The following text presents support him throughout the entire a number of these possibilities and purchase process and thus build up a integrates them later in possible sales bond. Christian Boe, Managing Director scenarios. The figure below shows of the Porsche Centre in Mannheim, what those interviewed said about sees above all considerable advantages these channels during this study. in “sponsoring an event when your own staff is on the spot and is involved The comments on the individual in the event themselves. ” channels were as follows: Factory sales Sponsoring Factory sales constitute the purest The sponsoring of events such as form of direct sales and are usually large-scale sports meetings serves only applied as part of VIP sales pro- above all to improve the image of a grammes or in the used-car business. company. Over and above this, pro- The discussions in the market have spective customers can be invited to shown, however, that these types ofFigure 1: Sales channels and their evaluation Sponsoring 45 % 9% 9% 36 % Factory sales 27 % 27 % 45 % Auto in service 82 % 18 % Dealerships 91% 9%Non-auto brand cooperations 91% 9% Internet OEM 82 % 18 % Internet dealer 55 % 18 % 27 % Shopping malls 64 % 9% 18 % 9% Events 73 % 9% 9% 9% Public events 45 % 9% 18 % 27 % Closed events 73 % 9% 18 % City showrooms 73 % 27 % Brokerage 36 % 64 % Recommendations 18 % 82 % Positive Neutral Negative No mention © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 9. 7activities by manufacturers are viewed everything in detail, whereas Roger ”as strong competition. Wilfried Hallier, Störzer, Managing Director of theManaging Director of the Porsche Porsche Centre Nuremburg, adds thatCentre Hamburg North-West, com- “customers place the quality and thements that “what manufacturers are service offered by the salespersonalready practising today does not really above the visual impression of thehelp in a lot of sectors such as the showroom. As far as the contact to ”used-car market. ” the customer goes, Professor Willi Diez, Head of the Institute of Automotive Research, states that “selling via aCustomer contact while the auto is point of sale is these days somewhatin service outdated. A lot of customers really want to be approached in a completelyThe time that the customer spends in different way than via the classic carthe dealership waiting for his car to be showroom. But there are naturally also ”serviced, or any other form of contact other opinions: an important elementwith the customer in the context of here is without doubt the test drive,servicing his or her car, can be made which Roland Klement, Managingmuch better use of to actively approach Director of the Porsche Centre atthe customer and to initiate a subse- Stuttgart Airport, still sees “as beingquent purchase process. Boe, for the best sales argument and thusexample, thinks that “making use of essential.”the service process to approach thecustomer” is an option that is not yetbeing exploited to a satisfactory Non-auto brand cooperationsdegree. With respect to contacting potential customers, cooperating with firms fromDealerships outside the industry was repeatedly broached in the discussions during thisThe traditional car dealership in its cur- study. Christoph Käding, Managingrent form is designed to cover different Director of Bach Premium Cars, saysprocess steps, namely customer rela- that “joint ventures are perfectly feasibletions, sales and service. Generally and are gaining an increasing amountspeaking, it must also be ensured that of attention, whereby it’s all aboutthe corporate image is communicated developing a concept together with anand represented at exactly this cus- interesting partner. In this particular ”tomer contact point. Manfred Seidel, case, the joint activity was with theExecutive Director Sales Germany at manufacturer of private yachts in hisAutoScout24, the used-car internet showroom in order to approach a com-sales platform, says that “the dealer mon clientele. Boe agrees and seesmust be in a position to serve both the possibilities “in both directions, i.e.internet-savvy customer as well as the both in a car showroom, in order tosenior citizen who wants to be shown increase the customer frequency, as© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated ,with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or othermember firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International ,have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMGInternational.
  • 10. 8 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales well as on the partner’s premises. As ” Internet dealers for gaining new customers in the pro- cess, Hallier says: “We invite the manu- In comparison with manufacturers, facturers of premium brands to the dealers can display their products on Porsche Centre to present their prod- their website in a targeted manner and ucts on our premises, and we acquire can initiate the sales process there new customers for ourselves in this and then, and can also communicate way. By the same token, Störzer says: ” directly with a customer. The internet “Joint ventures with other premium is absolutely ideal for the used-car products are great provided that the business, and will become increasingly partner is the right one. I can also important in the future. Peter Kraft, envisage exhibiting our brand in the Managing Director of the Porsche showrooms of another premium brand. ” Centre in Lörrach, says that there are two sides to this coin: “On the one hand, I can take an exotic car in part Internet OEM payment because the marketplace for this car is the world. But on the The website of an OEM today serves other hand, the best-price shopper mainly to convey the image, whereas need not buy in his immediate vicinity, the acquisition of customer contacts but can rather purchase anywhere he and their transmission via this medium likes. Sascha Heiden, Senior Market ” will play a much greater role in the Analyst at Global Insight, also says future. In this context, Seidel says that that “the internet will in future become “the internet will become the lead an increasingly important sales channel channel to the dealer in the future.” above all in the used-car trade. ” Jürgen Niemuth, Managing Director of the Porsche Centre Munich South, makes a fundamental observation in Automotive “shopping malls” this context: “Internet has changed so many things. Even before coming to The spatial positioning of different the car showroom, the customer brands at one location is generally seen informs himself thoroughly. And when as being positive, provided that the he gets there, he usually only wants overall presentation has an exclusive to know how much the car costs and flair. Splinter, Managing Director of how soon he can have it. People simply the Porsche Centre Berlin-Potsdam, have so many more possibilities with for example, feels that “consolidating the internet. For our part, however, this different brands makes sense because trend means that we are often deprived the presence of the right brands makes of the opportunity of having a real it possible to generate a higher cus- sales discussion. ” tomer flow. Störzer sees the advantage ” above all in the fact that “the customer can get a good overall idea of the entire market without having to go far, whereas there were some other ” © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 11. 9interview partners who rejected such parties serves primarily to enhance themodels on principle. image of the company as well as to generate initial contacts. Professor Diez says: “One has to go to the customerEvents these days and not the other way around. It is immensely important toWith regard to the possibility of using present oneself at highly frequentedevents within the sales system, a locations and to try to go whereverdistinction must be made between there is traffic rather than trying topublic events, those organised by third generate the traffic oneself. A roadparties and closed events. Whereas show in the centre of town, for example,public events include, for instance, the is a good way to create a point ofpresentation of cars in city centres, interest, whereby such an event mustthose organised by third parties can be always provide the possibility of takingexhibitions and sports events. Closed a test drive. ”events usually take place in the carshowroom itself or on the premises Closed eventsof a joint venture partner. In a further Closed events serve more to cultivatestep, according to Käding, “the events customer relationships and thus customerare split into two groups, namely those loyalty, although once the customerthat concentrate on acquiring new leads have been reliably qualified, therecustomers and those that serve to is nothing standing in the way of aenhance the loyalty of existing custom- successful contact to new customersers. Boe confirms the effectiveness ” via closed events. For Hallier “theseof such events, because “to my mind, events are above all an important topicselling is no different to customer rela- because we frequently attempt totions management. Whoever succeeds acquire new customers at them. Peer ”in creating a good atmosphere will find Kraack, Head of Sales Porsche Centreit easier to make a sale. Hallier adds ” Limburg, says that “open driving daysthat “above all, themed concepts are are encouraged because an extremelyimportant in order to create a bond high rate – higher than that known fromwith customers. As mentioned earlier, ” normal test drives – can be achieved inthere is also the possibility of cooperat- terms of making sales. ”ing with other companies. “What isnew is that we are hitching up to otherpremium brands and that we are trying City showroomsto make contact with the target groupvia these joint activities. ” The positioning of showrooms in downtown areas encountered a widePublic events and those organised range of reactions by those who tookby third parties part in the study. Whereas some ofThe organisation of public events or those interviewed argue against athe integration of one’s own presen- concept that is restricted purely to thetation in an event organised by third presentation of vehicles and Boe© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated ,with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or othermember firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International ,have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMGInternational.
  • 12. 10 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Salesquestions the cost efficiency, Störzer Brokerage Recommendationssees this concept as being very effec-tive, although “these lighthouse projects The concept of brokerage is that firms Comparable with the concept of bro-should only be seen as a lead channel from other sectors refer their customers kerage are recommendations, where ato the car showrooms; the business to the dealership or the manufacturer third party gives a potential customermust remain with the local dealer. ” and receive a quid pro quo in return. the opportunity of taking a test drive,He also says, “In principle, I would like Splinter believes that “there should be for example, in order to bring him intoto see such a showroom in every large a concept which provides for brokering contact with the brand, thereby upgrad-city, although this is not something the customers on a commission basis. ing his own products or services in thedealers can shoulder but is rather the Conceivable here would be a coopera- process. Or an existing customer couldresponsibility of the manufacturers. ” tion with upmarket jewellers, for exam- recommend a friend as a potentialOther interviewees also see a clear ple. Boe, too, sees the possibility of ” customer in return for, e.g., a brandedbenefit, but one that is nonetheless cooperating with “exclusive travel present. Kraack sees “such ’tickets-for-countered by high costs. But when it agencies who function as independent a-friend’ concepts as an innovationcomes specifically to “the introduction brokers.” which can be judged as extremelyof new products” and “the acquisition promising in cooperation with selectedof new customers” everybody can , partners.”see a clear advantage. © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 13. 112 Prospects for success and further development of sales channels The automotive trade is currently at a customer relations and sales and service. point at which the companies need to The sales approach must at all costs be take fundamental structural decisions supplemented by further channels, in order to secure their competitive because although this business model positions in the long term. Today’s busi- may form the core of the sales activities, ness model and the 12 channels identi- the customer does not necessarily fied in this study reveal a host of areas want to visit the car showroom in all where the potential for optimisation is phases of the purchasing decision pro- present, in particular for generating cess, but may well expect an active new customer contacts, lead manage- approach in a different environment. ment and the used-car business. Under the premise that the “experience” when As far as contact to potential customers buying a car must still primarily originate goes, the topic of cooperating with from the product itself, the test drive companies external to the industry is still one of the most important ele- was raised repeatedly during the course ments of the sales process, whereby of the study and was assigned a open driving days and road shows are correspondingly high success potential. also gaining importance. In this connection, the potential for brokerage and recommendations can With regard to service, it is clear that also be rated highly. customer demands have risen markedly and the time that the customer spends Besides an increase in activities asso- at, or at least in contact with, the service ciated with used cars, the internet will unit should be used more intensively play a major role in the future above all for communication. In this connection, in the acquisition of customer contacts it is furthermore clear that a shared and their direct transmission to the location for sales and service has relevant sales units. In the medium advantages. term, however, and at least for the major part of the target group amongst The start of a customer relationship can private customers, the internet will not take place anything up to two years establish itself as the sales channel. before the actual sale. At the moment, This is, however, conceivable in the however, the customer is barely being domain of business customers. taken notice of at this time, meaning that the possibility of an early bond to The significance of events is on the the brand is not being exploited. rise, and will continue into the future. Already today, events display a high The traditional car showroom in its cur- effectiveness when they are properly rent form is designed primarily to cover organised, because they build on the © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 14. 12 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales point that “sales” is basically nothing The scenarios presented later in this more than pure relations management. study use exactly these insights and Whoever is capable of creating a good show how an OEM together with a atmosphere will have success in this dealer can work the market in the future. area. They can segment the customers accordingly and combine the channels One overall aim is to present oneself at in order to increase the effectiveness highly frequented locations and to use and thus the profitability within the the traffic that is already available instead entire sales system, and increase of expending one’s own resources to customer satisfaction at the same time. generate exactly that. In this context, public events are viewed positively, without any clear statements being made on their sustainability as a sales channel. The views on showrooms in highly frequented regions vary, because in spite of a principled endorsement, the cost aspect constitutes a strong counterargument. © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 15. Part II Evaluation and Scenarios© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated ,with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or othermember firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International ,have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMGInternational.
  • 16. 14 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales3 Suboptimal integration of sales channels The current positioning and manage- • A closely meshed coordination ment of sales channels is shown in the between the channels or between table below. the phases in the buying process does not always take place. This Drawing on its own experience within has several aspects: the market, KPMG advances the follow- ing statements: – In the dealerships, it is often the case that customer contact while • There are many overlaps in the chan- the auto is in service is not always nels operated by the manufacturers managed properly as a further and dealers. This redundant use of sales contact, e.g. the salesperson resources is inefficient. does not always greet the cus- tomer personally when he brings • The channels are not directed his car in for a service, or the systematically towards a specific service contact is not used as a phase in the buying process, but chance to collect the thoughts of rather are broadly designed to serve the customer about purchasing several purposes. This means that the next car. Another example of the channels are not focused on a lack of coordination within the achieving clearly targeted objectives dealership is, customer contacts in the sales process. With an orien- from dealer events are not always tation towards vague and diversified followed up properly within the objectives, the effectiveness of the customer relationship manage- channels necessarily suffers as a ment system (CRM). result.Figure 2: Sales channel management in the premium auto market today Image First contact Further contacts Sales Service Sponsoring Factory sales Auto in service Dealership Non-auto brand cooperations Internet dealer Internet OEM Auto shopping malls Public events Closed events City showrooms Brokerage RecommendationsPerformed by: OEM Dealer Both © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 17. 15 – On the manufacturer’s side, the – Above all, with regard to the contact details of prospective internet, with its potential for an customers generated from high- extremely low-cost support image events, the internet, or throughout the entire buying pro- city showrooms are not always cess, channel management is not recorded. This means that the optimally set up. On the websites link between activities promoting of both OEMs and dealers, the the image on one hand, and timing and quality of the response managing the initial contact to to a query is not always satis- the potential customer, is not factory. Even when the initial always handled properly. response is appropriate, often there is no follow-up to support – The integration between OEMs the customer in moving forward and dealers is not always optimal. in his or her decision-making A good example of this is the process. Finally, the data which frequent lack of coordination in OEMs and dealers have on their lead management: Initial contacts websites, or which they have generated by the OEM are often gathered via their websites – either not recorded at all, or not e.g. product and customer infor- passed on optimally – the right mation – is shared only to a limited information at the right time to extent between the OEMs and the right person – to the dealer the dealers. Yet combining this for personal contact. In the other information would make the data direction, the OEM is not informed yet more valuable to each party. by the dealer about the success rate of the leads passed on by the OEM; in this way, the OEM cannot assess the success of his own lead generation.© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated ,with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or othermember firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International ,have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMGInternational.
  • 18. 16 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales4 What a multi-channel sales approach needs to do The study has shown that a modern ments of exclusivity and allure, thus sales approach for a company in the including an appeal to the emotional automotive premium segment should motive for making a purchase. be in the form of a multi-channel system in order to make use of the The design of the point of sale must resultant advantages and synergies. always contribute towards cementing These include above all the chance of the customer’s perception of the brand opening up new customer fields that and the associated image. On account have not yet been accessed using the of the upmarket target group, an present channels. Customer satisfac- atmosphere should therefore be created tion – which forms a pivotal element which centres on an intensive product of customer loyalty – can, for example, experience and the opportunity of active be increased in a lasting manner by participation in shaping the buying employing different sales channels, process. In a nutshell, this means that because these can offer services that the customer should encounter a are specifically tailored to the individual powerful product and service expe- customer groups. rience at every single interaction with the brand. Ultimately, the success of a multi- channel system is greatly dependent Professor Diez exhorts that “the expe- on achieving a good “channel fit” and rience when buying a car must emanate on how the business relations and the from the product itself. The image ” customer interfaces, the so-called plays a predominant role when acquiring “customer touchpoints” can be opti- new customers, because it puts the mised. The term “channel fit” is under- customer in a positive mood with stood here to mean the optimum coor- regard to the brand. dination of the different sales channels, whereby the focus is above all on In order to support the customer preventing cannibalistic behaviour throughout the entire life cycle and between the different channels, coor- establish a lasting relationship, the dinating the activities in the market, active support of the customer – i.e. and assuring a smooth flow of relevant customer relationship management information. In short, “channel fit” (CRM) – will become even more impor- means a success-ful process integration tant in the future in terms of recording between the channels. the wishes and preferences of the customer as well as managing the The customer contact points must there- actual contact with the customer. fore be positioned such that customers at different points in the buying process The increasing heterogeneity of the are made aware of the company and target group leads to the necessity its product portfolio, and can also buy of having a number of different sales the products featured in the portfolio. channels, or at least sales formats The interfaces at which the customer available if the individual demands in is made aware of the company should, the market are to be paid due justice. for the premium segment, carry ele- Boe says on this subject, “In the same © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 19. 17way as the manufacturers have tailored With regard to the linking of sales outlets for new cars and also for usedtheir individual products, I think that channels, the flow of information cars, is rated very critically by the deal-the car showrooms will also have to between channels plays a crucial role. ers in some cases. Judged positivelyrethink along these lines, because the This applies in particular to acquiring by many, but not really established ascustomer is becoming more and new customers and thus to lead yet, are the so-called automotive “shop-more individual. And the products must management. The customer data ping malls” The same applies to bro- .be placed accordingly using a number captured and stored in anyone of the kerage and recommendations, whichof different channels.” channels must be managed and relayed may already be a feature of sales in such a way that an optimum contact systems, but are nonetheless notA simplified segmentation already to and support of prospective custom- systematically implemented. Theexists in the car trade which divides ers is made possible in all channels and internet is currently one of the mostthe customers basically into premium in all phases of the purchase decision. important instruments in the automotiveand non-premium customers. This The diversity of sales channels demand- trade, and its potential is by no meansdistinction is taken into consideration ed today is above all a result of the exhausted. In addition to the above-when setting up the channels. In a need to generate initial contacts and to mentioned optimisation potential insimilar way, different customer groups qualify these accordingly. The acquisi- lead management, exploiting all theare addressed at events with a focus tion of new customers harbours huge technical possibilities which the interneton either new customer acquisition or optimisation potential and is one of has to offer for the presentation ofbuilding the relation with existing the key tasks of the automotive trade. vehicles is another area where morecustomers. A fundamental observation Splinter underlines this with his state- could be done. Seidel says, “In mycan, however, be made that segmenting ment that “ways must be found of opinion, the technical possibilitiesis applied primarily in product develop- approaching customers such that the already available on the internet – forment and is still being neglected in effectiveness of acquiring new cus- example, those that permit the visuali-sales. Professor Diez explains: “The tomers can be increased. ” sation of vehicles plus their fittings –segmenting of product offers is helpful are being made far too little use of forfor the strategic orientation of product The current status of multi-channel the presentation of vehicles. ”policy, but this segmentation of products sales in the premium auto segmentis totally unsuitable for marketing.” may be summed up as follows. TheThe messages to segmented customer sales channels identified in this studygroups must be much more than simply are all being implemented to somethe product features of the correspond- degree within the automotive trade.ing cars. On the one hand, there is a high level of innovation to be observed, and onHand in hand with the use of different the other hand, few channels arechannels, it is necessary to establish systematically and consistently imple-clear-cut structures which do justice to mented across the market or within athe increase in complexity amongst given brand. This highly differentiatedcustomers. The different channels within picture of a channel applies particularlythis structure must be coordinated to channels shared by the OEMs andand cross-linked such that the conflict the dealers: sponsoring, non-auto brandpotential within an organisation is kept cooperations, events and the internet.low on the one hand, and that the Above all in these channels, thecustomer is supported in a comprehen- management of leads is not optimallysive and satisfactory manner on the coordinated. The channel operated byother hand. the manufacturer alone, i.e. factory © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 20. 18 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales5 Four scenariosThe view presented so far in the study other retail branches, the four scenarios Scenario 1suggests that the automotive industry are nevertheless applicable to, and– in contrast to the supply chain, which indeed rooted in, the automotive mar- This scenario works on the premiseis already extremely developed – lacks ket. The validation for this assertion is that for private customers, i.e. in thecost-effective structures in the area of twofold: elements of the scenarios will B2C sector, the manufacturer concen-sales systems. In this section, KPMG be familiar to the reader because they trates predominantly on the processconsiders how a more cost-effective are already present in the automobile module “image” whereas the other ,sales system in the premium auto market, and the points raised in the phases in the buying process are dealtmarket would look, by applying the course of the study apply neatly to with by the dealers. As already men-principles of a multi-channel sales the channel structures making up the tioned, the product is the main bearerapproach. The four scenarios thereby scenarios. of the image. Professor Diez notes inidentified were inspired by structures in this context “that the product exclusive-other retail markets which have highly The first scenario is based on a division ness is becoming increasingly impor-developed multi-channel sales systems. between private and business cus- tant for premium manufacturers. The”The four scenarios structure the twelve tomers, while the second makes a product image is promoted and com-sales channels evaluated in this study distinction between new and existing municated by means of advertisingto address segmented customer groups customers. The basis of the third and PR activities, which at the samein the new and used premium car scenario is the fact that there are cus- time promote the corporate image.market. These scenarios show through tomers who require personal sales This division between OEM and dealerwhich channel combination it is possible support and others who do not. To applies equally to the used-car market,to effectively approach the respective conclude, the fourth scenario addresses because all those interviewed duringcustomer groups throughout the indi- the idea of the manufacturers com- the course of this study were of thevidual phases of the buying process pletely assuming the marketing and opinion that the used-car business isand to support them thereby. Although sale of the vehicles themselves. of elementary importance and shouldinspired by the sales approaches inFigure 3: Sales channel management for private customers (B2C) Image First contact Further contacts Sales Service Product, advertising, PR, CSR CRM Sponsoring Sponsoring Customer contact in the service area Non-auto brand cooperations Non-auto brand cooperations Public events Public events Internet OEM Internet dealers City showrooms Dealerships and auto “shopping malls” Closed events Brokerage RecommendationsPerformed by: OEM Dealer © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 21. 19therefore be tightly meshed with, and Professor Diez is somewhat astonished aimed at different target groups.utilise the same approach as, new-car “that the internet as a true transaction Rather, the overlaps can be regardedsales. platform in the area of business custom- as a source of synergy in spillover ers has to date not really established effects, where activities aimed at oneWhereas both manufacturers and itself. And in the business segment, ” segment may well have a positivedealers use the channels sponsoring, he does not see the absence of a test impact “for free” on other segments.non-auto brand cooperations, events drive as a problem. Finally, this scenario is not far removedand internet, the aim of the respective from current structures, involvingactivities is in this scenario clearly Evaluation: mainly a “de-coupling” of the OEMsplit in order to manage the different This scenario offers the customer clear- and dealers to eliminate redundanciesprocess steps separately. This implies ly defined points of contact where his and sharpen capabilities in the allocatedthat for the private customer busi- needs can be optimally satisfied. There roles. Therefore, the challenges toness, only a minimum of coordination is a clear separation between the implement the change may well bebetween OEM and dealer is neces- support of different customer groups readily overcome. This type of salessary. by dealers and manufacturers. In this approach is well established in the context, the dealers become compe- food trade, in the cosmetics marketIn contrast to private customers, busi- tence leaders regarding CRM, whereas and in the market for white goods,ness customers are managed at just the manufacturers specialise in com- because here too, the manufacturerabout every stage by the manufacturer, munication of the brand image and sel- concentrates on developing his brandi.e. the B2B sector is operated as far ling to business customers. The over- image as well as supporting his busi-as possible by the OEM. The only fore- laps in sponsoring, events, internet and ness customers, whereas the coreseen role of the dealer is to act as a non-auto brand cooperations need not competence of the retailers lies inpossible partner for the delivery of the be understood as redundancies, becau- serving the private customers.auto and for after-sales services. se as noted above, the activities areFigure 4: Sales channel management for business customers (B2B) Image First contact Further contacts Sales Service Product, advertising, PR, CSR CRM Sponsoring Factory sales (optional) Dealership Internet OEM Non-auto brand cooperations (optional) Delivery Public events Closed eventsPerformed by: OEM Dealer © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 22. 20 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and SalesScenario 2 As the bearer of the brand, in this sce- The dealers profit significantly from nario the manufacturer plays a central the image building carried out by theThe acquisition and qualification of new role in the challenge of identifying and manufacturers and their efforts regard-customers is today one of the decisive addressing the appropriate potential ing the acquisition of new customers.challenges if not to say the biggest chal- customers. According to Hallier, defining As a result, the dealers can concen-lenge in the premium market. Käding and understanding the brand image is trate mainly on maintaining contactobserves in this context that “the biggest key to qualifying customer segments: with existing customers and can strivechallenge today is the so-called prospect- it is above all a question of “finding out to improve their relations managementing, i.e. canvassing for new customers where other premium brands are in with these known and valued customers.who have had no previous contact with order to localise the target group andthe brand. He goes on to say that “for ” approach them systematically. ” As soon as the customer is ready tothe manufacturers, it is a priority task to actually purchase the vehicle, thenfind an effective way of introducing In this scenario, one of the biggest according to Seidel, he definitely wantsnew customers to the brand. Whereby ” challenges is the exchange of custom- to “discuss the price, and in this respect,“it must always be clearly defined in er data between manufacturer and the dealer is indispensable becauseadvance whether the customer is at all dealer. On the one hand, the new when all is said and done, it’s all aboutinterested in the brand. In other words, customer leads obtained by the manu- the personal contact at the momentit is essential to find out whether the facturer must be transferred to the of signing the contract. This process ”brand suits the customer, because other- dealer effectively. And on the other phase applies to both new and used-wise, a lot of time and energy is spent hand, this communication must be car business; as repeatedly stated infrom which it is not possible to derive optimally configured in both directions the interviews, the pre-condition for aany benefit. Splinter sees above all a ” so that as a result of the feedback new car sale is that the new-car buyer“need for innovation regarding the pre- received from the dealer, the manufac- can sell his existing car. Anything theselection of true prospective customers turer can measure the success of his dealer can do to speed the sale andby the manufacturer and the need to efforts and can accordingly plan further raise the price in the used-car market,reduce the fear of breaking new ground. ” activities directed at the customer. whether e.g. accepting the car as aFigure 5: Sales channel management for new customers Image First contact Further contacts Sales Service Product, advertising, PR, CSR CRM Sponsoring Dealership Non-auto brand cooperations Internet dealer Public events Closed events City showroom Internet OEM Brokerage RecommendationsPerformed by: OEM Dealer © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 23. 21trade-in or acting as a broker, will In this scenario, the dealer is the special- new customer acquisition on the onestrengthen his position in the new-car ist for customer relationship manage- hand, as well as on the other hand themarket. Thus, the successful sale of ment (CRM). In future, CRM will gain cultivation of existing relations linked toa new car is dependent on a well- even more importance with regard to the selling activities for these custom-structured used-car trade. recording customer wishes and prefer- ers, create the basis for a successful ences as well as managing customer splitting of tasks corresponding to theThe connection between the new and contacts. Boe backs this up and recom- segmentation of the respective targetthe used-car business underlines the mends “working towards the sale of groups. Within the scope of this scena-importance of specialising in the exist- the next car as soon as the new car is rio, the exchange of information betweening customers and supporting them in delivered by making sure that continuous the OEM and the dealer constitutes thetheir wide range of needs throughout contact to the customer is maintained. ” most critical success factor. The custom-the “ownership cycle” Hallier states that . The same applies to new customers, ers whom the OEM has identified as“these days, the customer no longer about whom he says, “ soon as I have As qualified for the brand must be properlywants to bother himself with such defined a person as a prospective cus- handed over to the dealer, while thethings (i.e. the intricacies of disposing tomer, I need to actively support him dealer must inform the OEM whetherof the existing car). Störzer agrees and ” and maintain continuous contact. And ” the identified customers indeed wereemphasises the significance of this this moment in time can be anything suitable for the brand, i.e. if they did buy,business field: “Of crucial importance up to two years prior to the actual sale. and what they did buy. In the fashionin the new-car business is the practice industry and the market for upscaleof trading in the old car. Niemuth adds ” Evaluation: consumer electronics, it is frequentlythat “the used-car market is immensely This scenario is strongly marked by the the case that the manufacturer cultivatesimportant in introducing the brand to benefits of building experience and the brand image and concentrates onthe customer and transforming him accordingly expertise in the manage- the acquisition of new customers whilefrom a used-car buyer into a new-car ment of relations to the two different the retailer manages already existingcustomer. To conclude, Kraack identifies ” customer groups: new vs. existing customer relationships.“the used-car segment as being an customers. Over and above this, theinnovation and growth driver. ” synergies between image building andFigure 6: Sales channel management for existing customers Image First contact Further contacts Sales Service Product, advertising, PR, CSR CRM Effect brought about by Dealership and auto “shopping malls” activities for new customers Internet dealer Auto in service Sponsoring Public events Closed events Non-auto brand cooperationsPerformed by: OEM Dealer © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 24. 22 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales Scenario 3 With regard to this option, which is based on the customer having only This scenario offers the manufacturer limited demands, Professor Diez says, the opportunity of taking over the less “The more high-profile the brand is, cost-intensive customers who need the less elaborate the sales network no personal support. The OEM selects needs to be. Seidel adds that buying ” the channels most suitable for him a car is certainly possible without that he wants to utilise in managing personal contact points such as a test such “inexpensive” customers. As the drive, provided that a certain degree “owner” of the entire sales process of confidence is already available, and for such customers, synergies in the points out that for factory outlets, “the different process stages, e.g. image, closer the customer feels to the factory, relations management and sales, can the greater the level of confidence. ” be gained by the OEM. Störzer, too, corroborates this and saysFigure 7: Sales channel management for customers without personal support Image First contact Further contacts Sales Service Product, advertising, PR, CSR CRM Customer decides between dealer or independent workshop Internet OEM Sponsoring Non-auto brand cooperations Public events Closed events City showrooms Brokerage Factory sales RecommendationsPerformed by: OEM Dealer © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 25. 23 that “a test drive is usually superfluous different critical success factors are if the customer already knows which relevant, such as the location of the car he wants to buy. ” service workshop. The majority of the interview partners spoke in favour of Kraack confirms this and points out combining sales and service in one that “buying a car without a test drive location. Splinter even warns against is above all possible if the customer splitting up the two divisions and says already identifies with the brand.” that “in the long run, manufacturers should have a branch in every large city Within the scope of managing such in order to set up a network that spans customers, the manufacturer leaves the entire market, through which spe- the decision of how and where service cial situations in aftersales and the procedures will be carried out to the support of specific customers with customer. In this respect, a number of individual wishes can be better met. ”Figure 8: Sales channel management for customers with personal support Image First contact Further contacts Sales Service Product, advertising, PR, CSR CRM Dealership and auto “shopping malls” Internet OEM Sponsoring Non-auto brand cooperations Public events Closed events City showrooms Brokerage Recommendations Internet dealer Auto in service Sponsoring Non-auto brand cooperations Public events Closed events Brokerage RecommendationsPerformed by: OEM Dealer © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 26. 24 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales With respect to the customers who support, allowing the dealer to focus really do want support, Kraack says his resources on exactly those custom- that “the automotive trade is becoming ers who do want the kind of support more and more a pure people busi- on which he specialises. In view of the ness. ” differences regarding the incurred costs, the pricing must in some way Evaluation: take account of the actual level of The fundamental challenge of this sce- customer support required. In this nario is the fact that the customer has context, it must also be ensured that the choice of selecting totally different cannibalisation caused by so-called options with respect to shaping the “channel hopping” is ruled out entirely. buying process. As a result, the coordi- The prerequisite for this, too, is also a nation of the customer data recorded comprehensive and rapid communica- and used by the manufacturer and deal- tion between the sales channels. ers becomes more difficult. For exam- ple, if a customer lead generated by In principle, therefore, the process the OEM via the internet or an event in costs in the individual channels and fact seeks personal sales support, the their relation to the benefits to the lead data will need to be transferred customer is the focal point of this sce- rapidly, and the dealer will have to take nario. It is absolutely essential that up the lead quickly and effectively. there is a clearly defined coordination Seidel says that “dealers especially will with regard to the different shared profit from well-informed customers activities such as internet and events. who visit the showroom but who If this is the case and the channels nonetheless want to take advantage of including those such as brokerage and the services offered there. A similar ” recommendations are effectively inter- approach is already common in the meshed, then a great number of syner- travel industry, where it’s up to the gies can be utilised and all customer customer whether he makes his own groups covered. booking on the internet or whether he wants personal assistance in a travel agency. In comparison with today’s sales approach, this scenario is characterised by the OEM directly looking after the customers who demand no personal © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 27. 25Scenario 4 kind of direct access to the market is associated with an increased tie-up ofThis scenario is based on the segmen- capital in finished products and distri-tation possibilities already described, bution channels. On top of that, thewhereby here, the idea is that the share of the selling risk that is todayOEM establishes a certain channel mix borne by the dealers will fall to thevia which he handles the entire busi- OEM.ness activities on his own, i.e. withoutincorporating the dealers. Such a busi-ness model is already being used in Assessing the prospects for successretail banking, for example, where the of the scenariosproduct know-how constitutes the corebenefit when it comes to generating Scenario 1, splitting private and busi-added value in the sales process for ness customers, comes closest to thethe customer. In the same way as the current arrangements in the auto market,banks, the manufacturers in the auto- although increasingly OEMs are assum-motive industry could also look upon ing ownership of dealerships, i.e.using the product know-how as the implementing Scenario 4 in a stepwisebasis for a cross-segment, multi-channel manner. Scenario 2 fits to the basicsales approach. functional distinction between the OEM handling the overall image as well as theEvaluation: link between specific product imagesAs a result of the increasingly short and their target groups, while the dealerproduct life cycles and a high degree of handles customer relations and sales.innovation in the automotive industry, Scenario 3 is the most radical departurethe customer will be confronted ever from the current business models, andmore frequently with new product fea- is based primarily on internal, i.e. cost,tures which he will want to understand considerations.for his decision-making. Because ofthis, it could be argued that, particularly In the premium segment the brand andin the premium segment, product its image is of particular importance.know-how is decisive nowadays if the In developing and launching specificaim in personal sales is to do justice to models, the OEMs with offerings inthe increasing size of the model range this segment have invested a greatand the increasing complexity of the deal of time and money in matchingcar. In this scenario, the manufacturer the characteristics of the model to thecan fully exploit his product expertise demand of specific target groups.by ensuring that the customer is given Parallel to this, the premium customersan adequate degree of information and have the most diverse and sophisticatedsupport at every single customer demands on the sales channels, withtouchpoint. On the other hand, this the strongest preferences to seek an© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated ,with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or othermember firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International ,have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMGInternational.
  • 28. 26 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales individualised path through the channels generally needs to be customised to in their purchase decision-making. the individual customer, and the dealer is in the best position to perform this Thus, Scenario 2 seems to make the customising. In addition, where dealers most sense for the premium segment. are positioned as primarily managing In this scenario, the OEMs build on further contacts with customers, they their core competence in designing may come to understand their sales and producing cars to meet customer role in a different way. To a certain demands, by extending this knowledge extent dealers have understood their to inform the prospecting for new role as covering a specific territory in customers in the targeted customer the sense of being accessible for the segments. The OEMs gain synergies in customer. The underlying emphasis in that the analysis of target groups, which this role is to man the dealership and went into developing specific models, be ready for the customers, both new can be re-used in targeting the pro- and old, when they come. Clearly many specting activities for new customers. dealers have moved beyond this some- There is also a beneficial internal feed- what passive role, and are more actively back for them, in that the prospecting addressing the customers. Scenario 2 results can be fed back to the product serves to support this trend, in that development teams to align better car where the primary role of the dealer is characteristics with segment demand, managing further contacts with cus- by understanding better how the brand tomers, dealers will become more pro- and model are perceived by potential active in seeking out those customer customers. Finally, the amount of contacts where the customers are to resources applied to the prospecting be found, rather than waiting for them activity can be adjusted to the forecast in the dealership. That is, it can be of how many new, as opposed to expected that in Scenario 2 dealers will existing, customers are expected for a to a greater extent themselves shift given model. In the extreme, if a given over to a multi-channel sales approach, model is designed only for repeat managing a range of channels to buyers, then the OEM can be very address the range of contact possibilities modest in its outlays to accompany the with the existing customers. launch of the model; it would be left largely to the dealers to work their As mentioned in the evaluation of existing customer relations as they Scenario 2 above, one of the crucial best see fit. success factors in implementing this scenario is the lead management. The In Scenario 2, the dealers specialise in leads to potential customers generated managing further contacts with custom- by the OEMs must be distributed to the ers, as well as the sales and aftersales dealers in a way which is both efficient steps in the purchase process. This is and effective, as well as perceived by the part of the purchase process which the dealers as being fair: Dealers must © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 29. 27see that they benefit equally from the customers according to the costs ofprospecting activities of the OEM. In managing them. Much like travel agen-return, dealers must share the customer cies, OEMs could reduce their costshistory of the leads with the OEM, so by allowing the customer the choice ofthat the OEM receives feedback on going through the purchase processthe hit rate of the prospecting: To what without personal attention. Furthermore,extent is the OEM successful in identi- another cost-cutting option withinfying potential customers who in fact Scenario 4 for the OEMs is to eliminateend up purchasing the car? the middleman in dealing with business customers. They themselves can per-In assessing the other scenarios, con- form the entire B2B sales process; i.e.cerns over maintaining sales points implement Scenario 1. Finally, in manag-in the dealer network in the face of ing their own sales channels, OEMsdealerships going bankrupt, have can establish an organisational solutionrecently led a number of OEMs to which conforms to the structures andassume the ownership and manage- roles identified in Scenario 2, in orderment of dealerships in key locations. to gain the benefits of this approach asThis trend is most pronounced in the well.premium segment where, as describedabove in Scenario 4, product knowledge In assessing the success prospectsis a decisive source of added value in of the scenarios it may be concludedthe sales process for the customer. For that they need not be regarded as stricta number of reasons, therefore, the alternatives, but can be combined intrend to Scenario 4 may continue. different ways to generate a multi-Within the context of Scenario 4, the channel sales approach which is opti-OEMs would benefit from managing mised to the specifics of a given markettheir own distribution channels along situation.the lines of Scenario 3, segmenting© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated ,with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or othermember firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International ,have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMGInternational.
  • 30. 28 Steigerung der Kosteneffektivität im AutomobilpremiumsegmentConclusion: Raising Cost Effectiveness The clear and structured approach upon In the long run therefore, by clearly which the scenarios outlined here are defining the individual types of cus- based, makes it possible to manage tomer segments and matching them the multiple sales channels in such a to the appropriate sales channels and way that they are employed efficiently process, it is possible to establish a and achieve maximum benefit. To multi-channel sales structure which is achieve this, it must be clearly under- more cost effective than the system stood exactly who is the target group currently in place today. Such a system of the individual activities and to what on the one hand permits cross-segment degree this target group requires processes such as an optimised lead support. management, and on the other hand – because of the synergies between The cost effectiveness is increased dealer and manufacturer – leads to a primarily in two ways, first by using the rational use of resources and thus an internet, and second by allocating mar- increase in efficiency. Furthermore, the keting and sales resources in a clearly multi-channel approach holds the prom- defined and targeted manner between ise of configuring the sales processes sales channels, respectively between in such a way that besides lowering the OEM and the dealers. The internet costs, the quality of the customer- as a sales channel is the most cost-effi- specific processes are also significantly cient instrument that can be employed improved. At one and the same time, to communicate relevant information the customer purchasing experience and to handle sales processes. In the is enhanced and performed more inex- medium term, however, the internet pensively. It is exactly this improved will not be used by the entire target cost effectiveness – lower costs com- group as an independent sales chan- bined with higher customer satisfac- nel. Therefore, multiple sales channels tion – which so often makes the dif- must be established and managed to ference between success and failure cover all the various needs of the dif- in a saturated market. ferent customer segments. These chan- nels must be managed in an integrated way to minimise redundancies and maximise synergies between different channels, and between the OEM and the dealers. In addition, clearly defined fields of action will foster the develop- ment of specific skills and capabilities going forward, serving to raise cost efficiency comprehensively in the entire sales system. © 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofmembers of the KPMG network of independent member firms affiliated , with KPMG International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG International or any other member firm vis-à-vis third parties, nor does KPMG International , have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.
  • 31. kpmg.euContacts KPMG AG KPMG AG Wirtschaftsprüfungsgesellschaft Roger Neininger Dieter Becker Partner, Coordinator Automotive Managing Partner Switzerland Global Head of Automotive Badenerstrasse 172 Theodor-Heuss-Strasse 5 8026 Zürich, Switzerland 70174 Stuttgart, Germany T +41 44 249 2125 T +49 711 9060-41720 rneininger@kpmg.com dieterbecker@kpmg.com KPMG AG KPMG LLP Wirtschaftsprüfungsgesellschaft Michael Steventon Stephanie Göring Partner, Coordinator Automotive UK Manager, Automotive 2, Cornwall Street Theodor-Heuss-Strasse 5 B3 2DL Birmingham, United Kingdom 70174 Stuttgart, Germany T +44 121 2323376 T +49 711 9060-41721 michael.steventon@kpmg.co.uk sgoering@kpmg.com KPMG AG KPMG Asesores Wirtschaftsprüfungsgesellschaft Marcelo Veiga Birgit Schlaitz Director, Coordinator Automotive Spain Manager, Automotive P° de la Castellana, 95 Theodor-Heuss-Strasse 5 29046 Madrid, Spain 70174 Stuttgart, Germany T +34 9145 68067 T +49 711 9060-41309 marceloveiga@kpmg.es birgitschlaitz@kpmg.com KPMG Accountants N.V. William J.D. Koot Partner, Coordinator Automotive Netherlands Burgemeester Rijnderslaan 20 1185 MC Amstelveen, Netherlands T +31 20656 4558 koot.william@kpmg.nlThe information contained herein is of a general nature and is not intended to address the circumstances of any particular © 2009 KPMG Europe LLP a UK limited liability partnership, ,individual or entity. Although we endeavor to provide accurate and timely information, there can be no guarantee that such is a holding company of a number ofmembers of the KPMGinformation is accurate as of the date it is received or that it will continue to be accurate in the future. No one should act network of independent member firms affiliated with KPMGon such information without appropriate professional advice after a thorough examination of the particular situation. International, a Swiss cooperative. KPMG Europe LLP and KPMG International provide no client services. No KPMG Europe LLP subsidiary or other member firm has any authority to obligate or bind KPMG Europe LLP KPMG , International or any other member firm vis-à-vis third parties, nor does KPMG International have any such authority to obligate or bind any member firm. All rights reserved. Printed in Germany. KPMG and the KPMG logo are registered trademarks of KPMG International.