October 20, 2017

I’ve had the privilege of working with several leading luxury brands including BMW, Lexus, Porsche, Maserati and Rolls Royce. From these experiences, I have learned to adjust owner communications to meet the unique needs of these brands and customers.

Following are some tips I have learned over the years form working with many luxury service departments. The key point to learn: Luxury is different!

1) Use More Channels: To be successful, it is important to use more channels to reach luxury customers. Each channel added to a marketing communication increases response by at least one percentage point. With a higher RO value, each percentage point is worth much more for a luxury brand. Therefore, investing in more channels – mail, email, SEM, display and Social – nearly always pays.

2) Invest in More Engagement: Not only is each luxury appointment worth more, but standard maintenance appointments tend to be further apart. With 10,000 miles between standard intervals, to maintain relationships, luxury brands need to find other reasons to engage their customers between service intervals. For example, early ownership events such as a 2nd delivery to maximize feature utilization; or pit stops to top off fluids, replace wipers or check air pressure; help address owner needs. These types of events build usage habits during the post-purchase honeymoon period. Another idea is to gather telematics and predictive failure data. This can provide valuable information that can then be used for regular communications regarding the customer’s full maintenance needs.

3) Work the Data Harder: To catch repairs between service intervals, how about leveraging telematics and predictive failure data to inform owners regarding likely additional service needs? Luxury brands tend to have a high percentage of leases so consider identifying second owners to maximize revenue from each VIN sold, including pulling sales data from sister stores. In addition, leverage unsold customers in the CRM and use targeted SEM that is particularly focused on older model year parts. It is also important to make different offers near lease end to entice servicing throughout the whole owner experience, with an eye toward sharing reconditioning costs.

4) Offers should Focus on Value over Price: While every owner wants a good deal, I am reminded of what Dave Power once told me; there are fundamentally two customer segments, “those who use time to save money; and those who use money to save time.” In luxury brands, we find more of the former than the latter, yet offers tend to still focus on discounts. Concierge services, or premium loaner vehicles, can be more effective enticements for the customer to return for declined services. It is also worth focusing on higher end voice-to-voice interactions and more liberal goodwill policies. Remember, these consumers are comparing their experiences to premium airline help lines, the Ritz Carlton, or their favorite fine dining, not Jiffy Lube or Pep Boys!

If you want to win with a luxury brand remember, Luxury is different! So, treat it that way and win. I hope these tips help provide some good food for thought.