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SBP Luxury Car Customer Retention in China

SBP Luxury Car Customer Retention in China
SBP Luxury Car Customer Retention in China

SBP Luxury Car Customer Retention in China

The Preliminary title of my SBP Luxury Car Customer Retention in China Topic under investigation How can luxury brands automobile 4S stores enhance customer loyalty in China? Due to my investigation, the customer retention rate in the automobile 4S stores is declining year by year at more than 35%. Luxury brands are slightly better. That means that, once the warranty period expires, customers may not return to 4S stores to repair their vehicles. Customers even don?t have to buy a car at 4S stores now in China due to the Parallel import vehicle policy.

If we just keep the status quo and don’t make any changes, customers will be less loyal to 4S stores. By then, we will lose our profitability. Problem statement The automobile 4S store was introduced into China from Europe in the late 1990s, and it gathered a variety of services quickly favored by Chinese consumers. 4S store is a kind of ? four - in - one? car franchise mode, including complete vehicle Sales, Spare parts, Service (after-sales), Survey (information feedback to the subsidiaries or manufacturers).

The 4S store model has developed very rapidly in China in recent years. The 4S store in the automobile industry is a business model introduced by the automobile manufacturers to meet the customers? needs in the service. The core meaning of 4S store is ? automobile life service solution ?. This model is actually the product of the fierce competition in the auto market, it can provide well - equipped, tidy and clean maintenance area, modern equipment and service management, high professional atmosphere, good service facilities, adequate spare parts supply, fast and timely tracking service system.

Through the service of 4S stores, users can create a sense of trust to the brand, thereby expanding the sales. Nonetheless, the 4S stores are experiencing the biggest challenge now in China. Our group is a car dealership group with hundreds of cars 4S stores in China, operating many luxury brands’ 4S stores such as Porsche, Rolls-Royce, Bentley, Ferrari, Maserati, Land Rover etc. We also have premium brands as BMW, Audi, Benz, Lexus, Cadillac, etc. The problem with our group is that most of the 4S stores are starting to be unprofitable. The only profitable three brands are Porsche, Lexus and Land Rover. The other 4S stores are losing money now.

This is happening not only in our group but also in other group in China. This traditional industry is facing enormous challenges. As a Sales Director of Porsche Division of our dealer group, our business sections cover a wide range. The annual revenue of my business section can be nearly 2 billion RMB. My responsibility is to obtain most of the profit of our group since it’s Porsche. I see myself a General Manager in 3 to 5 years. And, I want to help the other luxury brands 4S stores achieve profitability. We are facing many problems in China as B2C companies:

• Most of the car 4S stores have disappeared abroad already • Small dealers, resellers and parallel importers are affecting the sale of car 4S stores

• Consumption tax on the selling price higher than 1.52 million RMB

• Small social repair factories are affecting the after-sales income of car 4S stores

• E - commerce has begun to penetrate the traditional car sales industry

• Virtual reality begins to apply, and customers can buy cars without going to 4S stores

• The customers? impression of the traditional 4S store is generally high costing. Once their vehicles end the warranty, customers will not come back again So, the problem I want to solve is: Customer should be more engage with the brands(way of life, facilitating their car life, etc) so maximizing the chance to buy them. Besides the service provided by the traditional 4S shop standard, what kinds of service can we offer to attract more buyers? As long as customers are willing to spend their time with us, we have the opportunity to sell our products. What kind of products? Just related to the vehicle? Is it possible that we are selling a way of life? So the ultimate question is how do we make our customers willing to come not just for buying cars and maintenance, but to take time to get involved in a lifestyle. What if the future is not about owning one Porsche but rent (long term renting/leasing) multiple Porsche to maximize experience. So maybe we can think about to turn the 4S store into a luxury brand car experience life center. Questions to which I expect to respond

• What luxury brands do customers like to spend time?

• What do customers want to do in 4S store besides normal business?

• Besides the service provided by the traditional 4S shop standard, what kinds of service can we offer? 3-5 articles discussing my topic ?How Brands Grow? ?Luxury Brands: Service with a Smart, Sophisticated and Savvy Smile!? Iwakura Masae ?Priceless?William Poundstone ?Luxury Talent Management: leading and managing a luxury brand?Michel Gutsatz and Gilles Auguste ?Global Automotive Executive Survey 2017? KPMG ?Automotive Trends and Strategy 2016? KPMG ?The Road to 2020 and Beyond: what’s driving the global automotive industry?? McKinsey Books and reports about luxury, consuming psychology, automotive industry dealers’ trends in the world, private wealth management of high net worth population, etc. Key steps to manage my project (backward scheduling) • To analyze the development of the global automotive market past and future trends. • To analyze the development history and future trends of China’s automobile market, especially the reference to mature foreign markets, analysis of the current China market in which stage. • To analyze how luxury goods are purchased, find common denominator.

• Research on the needs of existing customers

• Looking for service providers for customer needs, some need external cooperation, some may be our own staff can do. One research method I plan to use for my SBP Inductive; qualitative One preliminary market research related to your SBP idea I’ve selected a specific issure within my SBP: “What do customers want to do in 4S store besides normal business?” and adopted a qualitative method to address that issue.

Where the research design: I worked with my CRM colleagues, we had discussed a lot, and designed a preliminary questionnaire. The purpose is to ask the customers who have bought the car and what kind of activities they are willing to participate in together with us. Its application: Face interview when handing in a new car Face interview when handing in repaired cars Questionnaire: What kind of service do you want us to offer you in the 2 - 3 hours of waiting for maintenance?

Massage/Facial care/Leather care/Game/Manicure/Reading/Lucky draw/Visit the workshop/Visit other brands/Karting experience/Parent - child care area/Children?s English learning/Children?s etiquette education/Cigar tasting/Wine tasting/Music appreciation/Monthly global food tasting/Limited handicraft articles/Exhibition of Chinese national arts and crafts/Racing culture/ikebana/Baking class What kind of horizontal alliances’ activities do you want to participate in? Wealth management/Feng shui lectures/Overseas asset allocation seminar/Medical beauty/Overseas medical examination/Elite education/MBA seminar/Travel club/Driving school/Your business promotion/Industry chamber of commerce activities/On the etiquette education of the feminine physique and temperament/Fitness activities/Public welfare activities/LEGO/Mobile game competition/Film appreciation Your favorite watch brand? Your favorite bag brand? etc. The key preliminary findings of the qualitative analysis are illustrated: Many customers want to buy a luxury car, not just to buy a car, they want to have a different way of life, get a better life, have a more identity - based network.

The customers are showing great interest in life outside of the car. We should provide the corresponding service, let the customer be interested in participating, let the customer feel that we are the lead in the way of life. Maybe in the future, we will use a different way to sell luxury vehicles, to create an image of our own. In this way, the retention of the customer can be enhanced.

SBP Luxury Car Customer Retention in China

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