BMW: Customer Relationship Management and Risk Implications

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The modern car market dictates tough conditions to retailers. Competition, economics, and politics mean that new car sales are not profitable for dealers and are often even unprofitable. In such a situation, they need an alternative and guaranteed working source of income. The goal of BMW in interaction with customers is service marketing, aimed not at selling but at building long-term mutually beneficial relationships. At the same time, the company focuses on profit from a time perspective and not based on momentary needs. The benefit for the client, in this case, is to receive a demanded service at an affordable price.

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It is important to understand that each person’s perception of acceptability is different. In this regard, it is necessary to consider each client individually, identifying specific characteristics and needs. Building individual relationships and keeping each customer loyal to the brand is one of BMW’s key aftermarket initiatives. The brand not only offers impeccable car care but also understands the needs of the client. Managers are ready to respond quickly to changing trends in the world and changes in the owners’ lifestyles.

BMW Service Marketing, which is focused on customer relations, is based on three indicators: individual approach, identification of needs, and creation of a unique offer. The main goal of the company’s employees is to thoroughly know and understand customers (Akamatsu, Green & Bengler, 2013). For example, up-to-date contact information allows them to build correct communication and significantly save marketing budgets. Consequently, working with data quality becomes a basic process on the way to achieving this goal.

Unfortunately, even the best marketing proposal may not work due to the wrong communication channel. Speaking of service campaigns, a loud announcement in major media is far from the key to success. The information field of a modern person is extremely crowded. The search for the right offer, at times, turns into torment or becomes impossible. Customers lose confidence in such messages and, as a result, in the manufacturer. Therefore, the development of BMW service offers is based on transparency and finiteness of pricing, individualization of the service offer, and its timeliness (Kukkamalla, Bikfalvi & Arbussa, 2020). Only a positive customer experience can ensure a long-term relationship.

Along with the changes in the automotive market, business and processes in dealerships are changing. The clients and their behavior are changing, and this is the most important aspect. There are classic verticals within dealerships. These are, as a rule, the departments of sales, service, spare parts, and marketing. In this situation, it is important to find common contact points that will be of interest to everyone and allow the company to interact more effectively with the client, achieving key targets.

At first glance, tasks within each team are distributed quite simply and clearly. However, this does not create the main result: a united team. Each of the departments has its own “super-abilities” and experience, which can be perfectly combined with the experience of others. Therefore, the company needs something that makes each customer’s user experience special and unique.

It becomes more difficult to sell one or another product using only the logo of the automotive brand itself on it. The company needs specialized specialists to “read” the client’s requirements beyond the information about the product. Knowledge of how the client can apply any of the purchased goods in life is necessary. All training programs offered by the team are aimed specifically at solving problems and customer questions and not at “dry” specifications and facts about the product.

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Thus, for buyers who buy a car in the summer season, many dealerships offer favorable conditions for installing winter wheels and their storage (Weiss, Schreieck, Wiesche & Krcmar, 2020). The company also offers dry cleaning of rims using original chemicals after the season of use. Depending on the situation, the service is provided as a gift when buying a car and is an additional motivating factor.

It is extremely important to give maximum knowledge and awareness of what is currently being offered to the customers: perform customer education. For these purposes, special events and masterclasses are held (Blunck, 2016). At events in different cities, representatives of the companies provide for the test of the maximum range of accessories and retrofitted cars, talk about new products, and tell what can be found in any BMW dealership. Experience shows that it is precisely this kind of interaction between the sales department, the additional equipment department, service, spare parts, and marketing that is most effective.

For the car business, particularly for the functioning of the BMW company, general risks are inherent in any sector of the economy. These include changes in legislation and regulation by the state, macroeconomic risks, high competition within the industry, and risks of non-payment for services rendered. Another group is particular risks specific only to the car industry. The first group of risks cannot be managed since they do not depend on the company in any way. However, some risks can and should be managed, and BMW copes with them on its own.

Risks in the car business are also often associated with human interactions with machinery. The causes of risks can be divided into three groups: human factor, technical, and force majeure. To avoid complexities in these areas, BMW considers the combination of all these factors in business planning. From the point of view of an entrepreneur or investor, the car business is risky. Various aspects depend on a specific person: the driver.

Not only can the car be damaged, but also a very expensive cargo. This area includes a technical risk factor. It is not only about the car’s condition, its suitability for use, but also the condition of the roads where it is planned to drive. The worse the roads are, the higher the likelihood of breakdowns; therefore, the company should allocate additional costs for repair and maintenance of the vehicle fleet, and the prices increase.

Any risk is a certain probability of incurring losses but also an opportunity to get excess profits. For example, BMW often faces commercial threats. This type of risk includes risks associated with the cyclical demand for automotive products, which are exacerbated by many competing automakers and the underestimation of potential competitors.

This also includes the risks of non-fulfillment of obligations in the implementation of commercial transactions and the risks of choosing strategic partners and suppliers of components and materials. In addition, commercial risks include the risks of marketing mistakes in assessing the internal market prospects, as well as the risks of the “late launch” of a new product to the market. As a result of inattention to these aspects of the business, the company can significantly lose in finances, so BMW uses years of experience to avoid them.

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BMW managers also constantly interact with other markets to exchange information and implement best practices found. From all of the above, it is possible to conclude that it is impossible to win and develop simply by offering goods. The market demands complex solutions that are available “here and now” to maintain individual customer mobility, and help make everyday tasks easier and the best moments of life brighter. One needs to think outside of what the market offers and anticipate it. This is comparable to oranges: many people love their taste, but no one loves to peel them. Whoever can peel this orange of client tasks wins.

References

Akamatsu, M., Green, P., & Bengler, K. (2013). Automotive technology and human factors research: Past, present, and future. International Journal of Vehicular Technology. Web.

Blunck, E. (2016). ‘Germany BMW’s sustainability strategy of evolution and revolution towards a circular economy’, in Anbumozhi, V. and J. Kim (eds.), Towards a Circular Economy: Corporate Management and Policy Pathways. ERIA Research Project Report 2014-44, Jakarta: ERIA, pp.75-92.

Kukkamalla, P., Bikfalvi, A., & Arbussa, A. (2020). The new BMW: business model innovation transforms an automotive leader. Journal of Business Strategy. Web.

Weiss, N., Schreieck, M., Wiesche, M., & Krcmar, H. (2020). From product to platform: How can BMW compete with Platform Giants? Journal of Information Technology Teaching Cases. Web.

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