Luxury race: Who can pamper buyers the most?
Upscale brands lift customer service with new perks and staff training
Luxury vehicle buyers want service -- not just repairs done right, but the kind of pampering they get at high-end hotels, restaurants and boutiques. It's all about the extras.
In response, luxury vehicle brands are stepping up their games, rolling out unprecedented customer service, training staff and reconfiguring showrooms to cater to these buyers. The changes come as luxury sales gain steam with the auto industry's recovery in the United States.
"There's no such thing as a bad luxury car anymore," said Steve Cannon, CEO of Mercedes-Benz USA. "Our customers have such high expectations, and 'I had a decent service or sales experience' does not cut it in the competitive luxury business."
"It is not just about putting out a big pile of money in incentives and showering them with gifts and flowers on their birthday. It is like the Ritz-Carlton or luxury experience where they feel special -- that is what we are trying to do," said Cannon, whose company launched the Customer One training program this year for all dealership employees.
Peter Miles, vice president of operations for BMW of North America, said his company is about to roll out a new dealership standard that will transform showrooms to mimic retailers such as Apple: "There is no question premium customers expect a premium experience," he said.
"With any premium product, the experience the consumer has -- whether they are learning about it or testing it -- has to match the product."
Lexus dealers near airports often provide free parking and shuttle service to the airport while an owner's vehicle gets serviced or cleaned, says Nancy Hubbell, Lexus prestige communications manager. Dealers also offer Saturday breakfasts with free car washes, free up-close parking for Lexus owners at crowded events and owner events where they review technology, maintenance or other issues.
What dealers choose to do "depends on the dealership and what resonates in their community," Hubbell said.
For the past few years, General Motors has stepped up its focus on customer service for Cadillac. Ritz-Carlton service specialists have schooled Cadillac executives and dealers on the finer points of the luxury experience.
Last month GM started what it calls Cadillac University, a 2 1/2-day training program for dealers that imparts insights on values and attitudes of luxury customers.
Cadillac requires dealers to staff at least one technology expert dedicated to helping customers navigate their infotainment systems and device connections. GM gives buyers of new XTS and ATS sedans iPads with an app that mimics Cadillac's new Cadillac User Experience, or CUE, infotainment system.
And Porsche Cars North America is building a test track, museum and other features at its new headquarters in Atlanta. The company also is adding a Los Angeles brand center that includes a restaurant and a display of Porsche race cars.
"The vision is brand experience, if you want to differentiate and make the brand unique," said Detlev von Platen, CEO of Porsche Cars North America.
Porsche’s von Platen: Differentiation
Create fans, add sales
Training dealership employees -- from porters to dealer principals -- is an important element of the new approach to what many brands are calling the customer experience.
This fall, Audi of America launched the Kundenbegeisterung program, which means "creating customer delight" in German. Audi has shortened that to "Kb" and loosely translated it as "creating Audi fans."
In the first phase, launched this fall, Audi held daylong seminars in 14 U.S. cities. The company invited about 15,000 dealership employees and outlined how they can better engage customers, personalize sales and service and learn from other industries.
"We have to do a better job of treating customers, and we will give you the tools and training to do that, and we are empowering you to do that" was the message, according to Scott Keogh, president of Audi of America. "This is customer treatment, doing the right thing when the customer is in front of you."
The second phase was leadership seminars with dealer principals and general managers of Audi's 276 stores. In the fourth quarter, groups of 20 to 30 dealers spent six hours in role-playing and other exercises. They focused on goals such as selling to women, Keogh said.
In the first quarter, Audi will hold customer experience workshops across the country for every dealership employee who directly interacts with a customer, Keogh said. "We will work through it again and again."
The solutions aren't fixed procedures, Keogh said. For instance, some customers value getting in and out of the service department quickly: "We have seen when people come to Audi to have their car serviced, you come in, give us your key, the service loaner is there and you are out. We think, 'Brilliant.'"
But research has shown that not every customer is so eager to get out, he said. Some want to linger and talk about their cars. "We say book 15 minutes for each person every time -- we want to slow things down."
How does that translate in the dealership? Jim DiGuilio, general manager of Audi Henderson in Henderson, Nev., says his store picks up vehicles that need service at the valet parking area of Las Vegas' McCarran International Airport and returns them just before the customer returns from a trip, at no extra charge to the customer.
"Our culture has to be a willingness to go above and beyond," DiGuilio said.
And that willingness often wins over customers. DiGuilio told of an Audi owner who bought a competing SUV, took it in for service at the other brand's store and got a low-end loaner vehicle without a navigation system.
The customer was new to the area, got lost on the way to her appointment and nearly had an accident, DiGuilio said. Frantic, she called an Audi salesman at the Henderson store who previously sold her family a car.
The dealership didn't have any more loaner cars with navigation systems, so it pulled a new A8 with the feature out of inventory and took it to her, DiGuilio said. A week later the woman traded the nearly new SUV for an A8, he said.
Not about price
"If I can't differentiate and make you feel special about the experience, then it is all about price, and then we're no different than any other commodity product in the car business," Cannon said.
Mercedes-Benz customers "want to be thrilled and delighted," he said.
"We are trying to rally the dealer body around 'the best or nothing' customer experience and energize dealership employees to delight. That does not mean goodwill money on the table."
Mercedes-Benz has completed the first round of training with 11,000 customer-facing dealership employees. During that training, Mercedes discovered about 70 percent of the employees had never driven one of the brand's vehicles. So it is launching DASH -- Drive a Star Home -- and is putting 700 Mercedes-Benz vehicles on the road at a cost of $4 million so dealership employees can take one home for two nights. The program starts early next year.
Mercedes-Benz also polled 22,000 dealership workers about the store where they work, asking about leadership, culture and whether they are engaged in their jobs, Cannon said. About 15,000 employees responded. Mercedes-Benz consultants are discussing the results of the anonymous survey in person with dealer principals and store managers.
'Declutter the showroom'
BMW wants to change the environment of its dealerships simply because "we know over the last 10 years consumers come into dealerships less to learn about cars," Miles said.
Shoppers used to come in four times to check out a vehicle, he said. Now they come in twice. "They need an environment that isn't just a sales environment," Miles said.
During the first quarter, BMW will unveil its first new facility standard in a decade. The aim, Miles said, is to "declutter the showroom over the next four to five years."
That means getting rid of the cubicles, the glass rooms and the office environment to make the showroom more like an Apple computer store with "a lot of product. You buy things there, but you can also learn," Miles said.
BMW envisions using more high-definition screens to provide product information and displaying cars in detail with varied options, colors and upholstery, Miles said. No customer wants to be tackled by a salesman and put into a cubicle, he said. That's especially a turnoff at the finance and insurance end, where there's often a bottleneck, Miles said. BMW wants to speed that process and have contracts on tablets rather than paper.
Details are being worked out. Dealers will have until 2016 to comply, but BMW wants most of the elements in place in 2014, the first full year of sales for its i3 compact electric car, Miles said.
"This is not bricks and mortar. We have enough capacity in bricks," he said. "It is about improving the efficiency and meeting what we see are premium customer expectations."
Vroom, vroom around HQ
Porsche is building a new headquarters in Atlanta with a 1.6-mile test track and a customer experience center, as well as a similar facility in Los Angeles. Dealers will be able to book individual customers or reserve the center for a day for a group.
The Atlanta headquarters will have a Porsche car museum, and the Los Angeles center will display famous Porsche race cars. Each will have a restaurant. The cost for both projects is about $100 million, von Platen said.
Porsche executives expect as many as 20,000 visitors annually at the Atlanta center and test track, with as many as 15 percent of those visitors arranged through dealerships. The headquarters will open in 2014.
Von Platen said customers will be able to take delivery of vehicles at both locations.
A plus to the customer experience centers: "When you bring employees in direct contact with customers, it will give them new inspiration and customer focus on what we are doing with Porsche in the United States," von Platen said.
"And we are enabling customers to experience the values and the roots of our brand. This will be unique in the United States."
Jaguar Land Rover North America is experimenting with the way it introduces new vehicles, seeking to bring the right customers into a more intimate setting than a showroom or auto show.
To generate interest in the redesigned Range Rover that goes on sale in March, Land Rover hosted lavish dinners and receptions this fall in homes of 12 "superloyalists" -- people who have owned five or more Range Rovers. The superloyalists invited friends and associates who would be interested in the nearly $100,000 SUV, said Andy Goss, CEO of Jaguar Land Rover North America.
The Range Rover was always on display, but there were no hard sells or dealers handing out cards. The events were held in New York, New Jersey, Dallas, Miami and Chicago -- Range Rover's biggest markets. Usually 30 to 40 people attended, except for the largest event in Alpine, N.J., near Jaguar Land Rover headquarters, where more than 100 people were invited.
"We are trying to do this with advocacy and having our customers speak positively about our cars to friends," Goss said. "If you sell 300,000 cars a year, you can't do that because you are a commodity brand. At 60,000 you aren't, and you have superloyalists."
Mark Rechtin and Mike Colias contributed to this report
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