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Mercedes Benz Case study

By August 3, 2021August 18th, 2021Case Study

Introduction

Customer relationship management (CRM) is a model for managing a company’s interactions with current and future customers. It involves using technology to organize, automate, and synchronize sales, marketing, customer service and technical support. Builds a database that describes the customers and the relationship they hold with the company. Provides enough detail so that the company can offer the client the product/service that matches their need the best. The Mercedes-Benz is one of the world’s most successful premium brands. Its technical perfection, innovative design features and numerous car legends have made the Mercedes star one the world’s best known trademarks today. Other premium brands such as BMW, Lexus and Jaguar were competing fiercely in the luxury car market where Mercedes was traditionally very strong.

Mercedes-Benz was sold in the UK through a franchised network of some 138 dealerships. Each of these was autonomous, with the exception of three dealerships owned by the distributor Daimler Chrysler UK (DCUK). Dealers managed their own relationships including customer research, database management, acquisition and retention processes.

Challenge faced by Mercedes Benz

Autonomous Dealers managing the CRM

Mercedes-Benz was sold in the UK through a franchised network of some 138 dealerships. Each of these was autonomous, with the exception of three dealerships owned by the distributor Daimler Chrysler UK (DCUK). Daimler Chrysler had relatively little control over relationships between dealers and customers. All dealers managed their own relationships including customer research, database management, acquisition and retention processes. Some of the challenges faced by them are 

  • Low Quality of Service-Although the technical quality of the product was highly regarded, customers complained that the service that they received was not of the same high standard. This translated into declining customer satisfaction and increased defection.
  • Communication-Delivery Inconsistency-Customers reported that there was an inconsistency between the communication that they received and the service that was delivered. 
  • Inadequate Enquiry System: Enquiries from the customer went directly to the dealerships and were handled through their internal processes. These were sometimes inadequate.
  • Uncoordinated communication received from dealerships: Mercedes-Benz customers received communication from different dealerships that was not always coordinated. Such communication may not match customer needs at a particular point in time in their purchase cycle and may result in conflicting or duplicated messages.
  • Isolated Database: Each dealership operated its own database. The information in this database could be out of date, inaccurate and missing important information.
  • Salesperson’s Attitude: Salespeople did not always appreciate that it was essential to record correct and complete customer information if effective contact was going to be sustained.

CRM solution adopted by Mercedes Benz

  • A new approach to the marketing structure within each MA was set out, which involved a centralized CRM and marketing team – one for each MA. Each team was given the responsibility of database management, customer support and regional marketing. θ DCUK, working closely with one MA on a pilot program, mapped out each of the critical customer processes. 
    • These included prospect management (enquiry through to sale); 
    • Customer contact (communications throughout the period of customer ownership); 
    • Complaint management (acknowledging that complaints are an opportunity for improvement and also for forging deeper understanding with customers). 
    • Better Relationship between customer and salesperson: Instead of a salesman owning a customer, each relationship was carefully managed centrally through the new CRM marketing team set up within each MA. 
  • Each communication channel was carefully integrated so that the customer received relevant messages by an appropriate channel at various critical points during the ownership cycle.

Some of the Key features of the CRM solution are listed in detail

  • Introducing a New Distribution Model: In 2000, DCUK decided to adopt a new distribution model for Mercedes-Benz passenger cars. They re-organized the market into thirty five new, larger geographical areas and invited a number of existing dealerships to enter into new retailer agreements. This entailed these dealerships taking over responsibility for the retail sales and service of Mercedes in specific geographic territories or ‘market areas’ (MAs). 
  • Project Management Team was Established : Within DCUK, a project management team was established, drawn from managers in marketing and operations. The project management team set about identifying the key CRM processes and determining how each process would be implemented throughout the new retail structure.
  • Every aspect of the customer relationship needed to be carefully examined, to ensure value was created at every opportunity: for the customer, the 392 Handbook of CRM: Achieving Excellence in Customer Management MAs and DCUK. 
  •  Benchmark Mercedes-Benz : The first step was to benchmark Mercedes-Benz against other leading marques as well as best in class organizations. This research suggested that there were several areas where greater value could be delivered to the customer during both the sales process as well as during the ownership experience.θ
  •  New Retail Agreements started working: Under the new retail agreements entered into by the MAs, DCUK gained closer control of the valuable Mercedes-Benz brand.

Cross selling and up selling opportunities were used to advantage and the MA reported that relationships with customers were extended and deepened.

Conclusion

The MA could justify the significant expenditure on CRM systems and processes by the impressive financial returns as well as improvements in critical customer measures. Winning the CRM margin has become highly important for dealers and is ensuring that the CRM initiative stays at the forefront of people’s minds. Staffs are aware how their individual efforts contribute towards the success of CRM. The initial results of the CRM implementation have been very encouraging. There is a great enthusiasm within both the MAs and DCUK for improving the customer experience and establishing closer relationships with customers. The CRM case study of Mercedes Benz forms an important milestone in automobile CRM. 

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Nasir Khan - CRM Author

Nasir Khan - CRM Author

Deployed robust sales, marketing and customer support automation systems and implemented industry best practices/processes across verticals such as BFSI, Manufacturing, Real Estate, IT, ITES, eCommerce, Education etc.,