AUTO M OT I V EMulti-Channel Sales Approachfor Premium Autos: Raising CostEffectiveness in Marketing and Sales
Editorial               The automotive industry in 2009 is without any doubt in the middle of one of               the mos...
Table of Contents                Executive Summary ..........................................................................
2 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and SalesExecutive Summary      ...
3Scenario 3 – Purchase process               The assessment of the success pro-                                           ...
4 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales                       ...
Part I: Empirical Analysis© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a number ofme...
6 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales1 Twelve sales channels...
7activities by manufacturers are viewed                                             everything in detail, whereas Roger   ...
8 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales                       ...
9interview partners who rejected such                                               parties serves primarily to enhance th...
10 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Salesquestions the cost eff...
112 Prospects for success and further development  of sales channels                The automotive trade is currently at a...
12 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales                      ...
Part II Evaluation and Scenarios© 2009 KPMG Europe LLP a UK limited liability partnership, is a holding company of a numbe...
14 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales3 Suboptimal integrati...
15     – On the manufacturer’s side, the                                                  – Above all, with regard to the ...
16 Multi-Channel Sales Approach for Premium Autos: Raising Cost Effectiveness in Marketing and Sales4 What a multi-channel...
17way as the manufacturers have tailored      With regard to the linking of sales                                         ...
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
20100201 multi channel sales approach for premium autos
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20100201 multi channel sales approach for premium autos

  1. 1. AUTO M OT I V EMulti-Channel Sales Approachfor Premium Autos: Raising CostEffectiveness in Marketing and Sales
  2. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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. 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.

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