Expensive cars – high expectations

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)

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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.”