Expensive cars – high expectations

Feature Article | November 27, 2009 by Anna Simmes

Customers relations at Porsche with CRM software (Photo: Frank Völkel)

Customer relations at Porsche with CRM software (Photo: Frank Völkel)

Porsche 356, Porsche 911 Carrera, Porsche 911 GT3, Porsche Cayenne, and the brandnew Porsche Panamera – iconic names reflecting 60 years of sports car history. Car lovers worldwide go weak at the knees at the thought of the sleek machines rolling out of the Zuffenhausen plant near Stuttgart, Germany. Cars, especially sports cars, have an almost palpable fascination for car lovers. But this fascination has its price: Customers expect extensive care and attention, even long after the sales agreement has been signed. “A lot of times, sales staff or dealers work with a customer for months to get a contract signed. Then the contact suddenly breaks off,” says Jens Puttfarcken, Porsche’s head of customer relationship management (CRM). At Porsche, however, things are different. Model kits of Porsche’s famous cars help customers fill the time until their real sports car is ready for delivery. Four weeks before the delivery date, customers receive the manual for their future car.

And even after they get their keys, customers regularly receive personalized e-mails and a glossy customer magazine. All this is part of Porsche’s strategy to continue interacting with its customers long after the actual purchase. In 2004, the company launched a global CRM initiative to assess all processes that interact with customers across all levels of manufacturing, sales, and after-sale services – and to improve them where necessary. Porsche created a dedicated CRM area to drive the initiative, which is supported by the SAP Customer Relationship Management (SAP CRM) application.

“We don’t just want the customer to feel like the king. For us, the customer really is king,” says Puttfarcken. “As a luxury sports car manufacturer, we understand that our customers have exceptionally high expectations. Meeting these expectations is our first priority so we cover all angles of service.”

A few years ago, things were different. Porsche recognized that several areas could be performing better. The new CRM area was created to make the necessary improvements. The company wagered that its new approach would even give it a competitive advantage by serving its select customer group.

Final assembly in Leipzig: Porsche Panamera and Cayenne (photo: Porsche)

Final assembly in Leipzig: Porsche Panamera and Cayenne (photo: Porsche)


10 e-mails to customers and five bounced

Porsche’s new CRM strategy was to tailor all customer contact and service to each customer’s unique desires and to foster a lasting relationship with each customer. Porsche also strengthened the ties with its dealerships.

“Our dealers maintain the day-to-day contact with our customers, which makes them especially important in our strategy,” says Puttfarcken. But for the manufacturer, partners, and dealers to establish such close relationships with customers, they all need to draw on the same information about their clients. So the quality of customer data in the CRM system is crucial. “The quality of this data is absolutely essential. Without it, there would be no end-to-end customer relationship management at Porsche. If we sent out 10 e-mails to customers and five bounced back because the addresses were wrong, it wouldn’t help us one bit,” Puttfarcken says. “Also, when customers come to us with specific questions about their Porsche, we need to have all the relevant information about their vehicle and their past interactions with us.” Under its CRM strategy, Porsche nurtures its relationship with each customer through a series of interrelated processes.

The company follows ist customers and the cars they buy for a lifetime. “Many companies focus their CRM strategies exclusively on acquiring new customers,” says Puttfarcken. Porsche, by contrast, goes the extra mile to provide service for the entire life cycles of its cars, even when they have changed ownership several times.

In the early stages of the customer relationship, for example, the system notifies the CRM team when a potential customer has test driven a sports car but, several months later, still has not signed a sales agreement. “Our CRM team then contacts the dealership to ask why the customer chose not to buy the car. That way, we can make any necessary improvements,” says Puttfarcken. “Our complaints management process is another very important element in our CRM strategy. The CRM system records each time a Porsche car is in the workshop and what problem it had. With that information, we as manufacturers can resolve customers’ problems as quickly as possible and ensure they are completely satisfied.”

Besides regular activities such as providing a suitable replacement car for the duration of repairs, the CRM system enables Porsche to modify its interaction with specific customers for particular time periods. “For example, when a customer has been having problems with a car, there might be little sense in sending an advertising e-mail. It might just be more upsetting,” says Puttfarcken.

Solving delicate situations

The CRM system also highlights customers who appear to be having problems, based on various criteria, such as two visits to a Porsche garage in a short period. “Approaching customers in such situations can often help us solve delicate situations before they get more serious. Actively making ourselves available to the customer and showing that we, as a company are doing our best to serve them goes a long way,” says Puttfarcken. In fact, the success of this approach is measurable: In the United States, Porsche saves U.S.$2 million annually because it has to buy back fewer cars from unhappy customers. “Our complaints management has a hugely positive effect on customer loyalty. For example, of the 333 customers who contacted us with complaints between March 2006 and January 2008, over 90% still drive at least one Porsche,” says Puttfarcken. And 6% of these customers have even bought another Porsche. Puttfarcken says that the CRM system enables Porsche to respond to customers’ queries and complaints faster than before, and the proportion of potential customers who actually buy a car has increased. “Five years after launching our CRM initiative, these benefits have fully returned our investment. Everything from now on is a bonus,” Puttfarcken says. The key to Porsche’s successful CRM initiative and its system is that it incorporates and integrates all of the parties involved, from manufacturers to importers, trade groups, dealerships, and, finally, the customers. For example, because of its CRM processes, Porsche can use data from all its customers worldwide for analyses and making improvements. Dealerships and other service providers, such as marketing agencies, are also tied in.

Future: SAP CRM 7.0

The systems and processes for Porsche’s CRM were implemented worldwide by the consultancy Mieschke Hofmann und Partner (MHP). The SAP CRM application provides the technical backbone for Porsche’s new strategy. Choosing the software was not difficult. “The system simply offered the best technical realization of the three roles we needed to address the full complexity of our customers and their cars: us as the manufacturer, the dealerships, and our agencies,” Puttfarcken says. Porsche already operated SAP software at pivotal points that border on its CRM, and these systems also provide information to SAP CRM.

Nevertheless, Puttfarcken concedes, Porsche will need to upgrade its technology eventually, probably with SAP CRM 7.0. “We want to make sure,” he summarizes, “that our customers know that they will always be king.”

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1 comment

  1. Sherine Khattab

    Abu Dhabi: 15/10/2010

    Dear Herr Putterfarcken

    “Customer is not King in Porsche Abu Dhabi”

    I have been struggling with the decision where and who to send this letter till accidently I found this amazing article (Expensive cars – high expectations By: Anna Simmes in SAP.Info) about CRM implementation in Porsche.
    Every word that you said in that article is what I thought Porsche stands for; Customer is King, Customer expectations, Customer loyalty, etc. Unfortunately my experience with Porsche is exactly the extreme opposite of what you aspire to achieve or promote in your article. Every single aspect mentioned in your article broke down as far as my case is concerned. Instead of respect for being a Porsche owner and meeting even mediocre expectations, care was replaced by neglect. Instead of avoiding serious situations a catastrophic one took place. I would have loved to experience what you said in your article because that is exactly what I expected when I purchased my Porsche but today I cannot possibly be a promoter for Porsche anymore. Being a customer advocate like yourself I would like you to study this case and get back to me with answers. By the way I only limited the letter to the last transaction but if you are interested the past 5 years experience with Porsche Abu Dhabi is absolutely horrible and may be you should look into it because I am not the only one.

    My husband and myself are what you classify as loyal Porsche owners. I own a Porsche Cayenne (Plate number AD 95993 S, chassis number WP1ZZZ9PZ5LA41093) and he has a Carrera 4S both purchased brand new from Porsche Abu Dhabi dealer Ali & Sons.

    Unfortunately our experience with the Cayenne and Porsche Abu Dhabi service center is extremely disappointing and frustrating. It has been going on for several years but it reached to a point that it is affecting my day-to-day life, not to mention our doubts about the quality of your product and brand. We were strongly advised against buying the car from Abu Dhabi since they have a very poor reputation in supporting and servicing their customers. Given the most recent failure in one of the vehicle components we probably should not have even bought the Cayenne at all. Now I don’t believe that they alone are at fault. Porsche is not standing behind their customers when their product is faulty or poorly designed; and who pays the price the helpless customer.

    My Cayenne has only been driven by me, no off roads, no accidents and has never been in any workshop but Ali & Sons for any type of service or repairs. I have been timely and precisely performing all the required service, maintenance, oil and filter changes as per Porsche’s manual, which can be verified on your records.

    My painful experience started very early after purchasing the car. First problem started with the entry keys, which took a month to resolve. We were told at the time that this was the first time ever such failure is reported and therefore took a very long time to fix. It sounded weird that a brand like yours would not detect these problems in the factory but we let it pass.
    Keep in mind that during troubleshooting and attempting to fix these issues I at my own expense had to rent a car to run my daily activities.
    Then later on there was a loud knocking noise from the gearbox that occurred erratically. Which usually happened while shifting down or slowing down. The service personnel’s assured us not to worry as this is a known problem, which has no consequences and probably will be addressed by a future modification ?????
    For a brand new Porsche this sounded weird to say the least, but we also let it pass.

    Although these issues are 4 years old, I recall them because they are related to my recent painful experience. I am certain that what I am suffering from today is not a coincidence but a result of a continuous trend of poor performance and design of Porsche product and poor support and service from Porsche representative in Abu Dhabi.

    As I mentioned the list is long but I will limit it to the most recent events.

    • In Mid June 2010, on my way to a business meeting in Dubai, all of a sudden the car stopped and had to be sent to Ali & Sons on a recovery truck. Their diagnostics was a Total Gear Box failure!!!! needs replacement
    A Porsche gearbox suffers from a catastrophic failure after 135,000 KM??? Even Korean made vehicles would not have such a performance. For a car that is strictly maintained at Porsche exclusive workshop fails at such low mileage is very suspicious. We were hoping your own personnel will be more concerned and try and give us a satisfactory answer. However their best answer was that we did not extend the warranty??? That does not explain the failure and why it happened, is it poor service previously done on the gearbox or is it a manufacturing defect?? No, they did not bother and could only blame the problem on the warranty extension.
    Do I understand from their statement that it is normal and expected that a Porsche gearbox fails so prematurely and therefore to be in the safe side we should have extended the warranty? Well I hope not because I will make sure that everyone knows how unreliable your design is. If that is the case I should not have bought either car. For the record the car has just gone through a major service, job number 2009405350 dated 17/9/2009.

    • June 29th, received the “offer” and had no choice except accepting to replace the Gear Box at my cost.
    • July 17th, the PCM failed, blind screen. We were asked to replace the whole PCM without providing any reason for the failure. Another failure that is unexpected and premature for a presumably reliable brand as Porsche.

    • July 24th, PCM is not yet available. waiting to receive from Germany;

    • Sep 16th, informed by workshop to pick car up. Invoice amounting AED 24,799 was settled. Job number: 2010503863, 16/9/2010 & renewed the warranty. As I was about to leave the workshop, fault light “ENGINE ALERT ON” !?!?! I was forced then to leave the car again to figure out what, why & how????

    • Sep 19th, I was informed they replaced a “Tank vent line” & now the Engine warning is off and the car is finally ready to be collected

    • Sep 20th, went to shop to pick car. Again the same alert was showing?? Why do I have to go all the way to the shop to discover something that should have been repaired and detected by your personnel? I had to leave the car again

    • Oct 6th, there is still no news STILL NO NEWS from the workshop!!!! Called & was informed that the spare part needed isn’t available & my car is not ready yet.

    • Oct 9th, for the 3rd time I went to workshop to collect the car. After waiting for 2 hours Porsche service representative informed me that the ALERT IS STILL ON!!! For 4 months the car has been in your workshop and yet the issues are not fixed

    • Apart from the financial burden, which is in excess of 50,000 AED (repairs, car rental), I am mentally drained due to the stress, frustration, time lost in following up, chasing your people, visiting your workshop more than twice a week and getting completely unsatisfactory treatment and answers from your personnel

    • Is CRM really implement and utilized in Porsche Abu Dhabi? I definitely doubt it and certainly have not experienced it.

    This is clearly poor performance and unreliability by Porsche. Whether it is bad manufacturing or poor service I have been and still suffering psychologically and financially. I share all this with you because it had to be escalated to a level where may be I will get what I deserve as a loyal customer. I expect to be told the truth even it results financial implications to Porsche. I don’t expect to be held in the middle of the distributor and Porsche. I expect to see a response that will restore the image of a brand that is linked to excellence, quality and customer delight.
    I stay at your disposal for any information and or clarification that you may need.

    Sherine Khattab
    Mobile: +971 50 1235863

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