Competition between premium OEM’s will become fierce and put market shares at risk in the run up to 2020, according to management consultancy Arthur D. Little’s new viewpoint, Battle for Sales in the Premium segment. With all three German vehicle manufacturers aiming to become the market leader, it identifies six main levers of strategic and operational excellence to help premium brand OEMs adjust their marketing and sales models to meet tomorrow’s customer requirements. “Based on the tremendous growth ambitions of all premium carmakers, the main challenge will be to conquer new customer segments while transmitting authentic brand values to existing customers,” states Dr. Andreas Gissler, Director of ADL’s Automotive and Manufacturing Group. “Besides the offered products, the main differentiator and prerequisite to success is an advanced sales model.” The global premium automotive market is expected to grow until 2020, primarily fuelled by strong demand for premium vehicles in China. Based on its experience working with OEMs, Arthur D. Little has identified six key levers of automotive marketing and sales excellence which must be optimized to eliminate weak spots and achieve excellence:
- Customer Experience Management – Customers view sales and service quality to be almost as important as product quality. Customer-focused sales and best-in-class customer experience across all touchpoints is a key success factor and the main differentiating element in the battle for sales
- Product and Regional Strategies – Regional strategies need to adjust to customer requirements in the corresponding product/service offering portfolio of the OEM, especially while broadening the product portfolio to even smaller car segments
- Retail Formats and Net Development – there should be interaction and integration of different sales channels to ensure a multichannel approach, which must be seamlessly integrated with both frontend and backend systems to prevent losing customers along the buying process
- Connected Car –increasing interconnectivity offers the trigger for a new customer-orientated business. Cars will become more intelligent and ultimately be an integral part of the customers’ individual lifestyle
- Processes and IT Integration – IT infrastructure needs to evolve in line with business requirements and eventually a worldwide standardization of relevant processes is necessary. To achieve the required standardization OEMs should integrate differentiating processes into their backend and offer a common frontend to all retailers
- Margin Orientation – a systematic margin orientation across all distribution levels is key for profitable sales, which can only be achieved by increasing sales volumes while keeping overall costs as constant as possible.
Notes for EditorsAbout Arthur D. Little Founded in 1886 as the world’s first consulting firm, Arthur D. Little has continually transformed business thinking and practice by applying its expertise in the areas of strategy, technology and innovation. Today, Arthur D. Little helps companies to create growth, overcome strategic challenges, improve innovation capabilities, and increase efficiency and competitiveness in a globalised marketplace. Arthur D. Little has a global footprint in 20 countries with a network of over 1,000 people.
Rob Hickling/Cate Bonthuys