Problem Solving Application Case Psac Audi Is Driving Change Over Half Of Your Custo 2544160


Audi Is Driving Change

Over half of your customers never come back. Do you have a problem? Audi thinks so. Audi sees 46 percent repeat business among its North American customers, while other German imports average 55 percent.71 Here is how Audi compares to its closest competitors:

The above table may suggest why Audi is so hungry to make changes. It has only half the market share of its rivals and needs to accelerate growth. In the United States it ranks third, behind both BMW and Mercedes Benz. Globally, however, Audi is the second-largest luxury automaker.72

Fortunately, Audi can build on growing strength in the United States. In 2011 and 2012 it set records each month over results for the prior year. During a recent three-year period it sold as many cars as it had in the previous 10-year period. But the rub was a disconnect between its high-end, state-of-the-art cars and its lackluster showrooms and weak customer loyalty. Audi ranked second to last in a US customer service satisfaction poll of car buyers. The Economic Value of Customer Service This gap is expensive. A 2012 study from Maritz Research estimated that the average car dealership could sell upwards of 217 additional cars per year by improving customer service. So in September 2012, Audi of America President Scott Keogh began visiting dealers around the country. Business week reported that he told them “he attributed the low numbers partly to the dealership experience, and that he wanted to focus on customer service.” Ranking German Luxury Car Manufacturers in the United States by Sales DECEMBER SALES YTD SALES CHANGE IN MARKET SHARE MANUFACTURER 2013 2012 CHANGE 2013 2012 CHANGE 2013 2012 BMW of North America Inc. 37,389 37,399 . . . 309,280 281,460 9.9% 2.0% 1.9% Mercedes-Benz 35,835 30,376 18.0% 334,344 295,013 13.3% 2.1% 2.0% Audi of America Inc. 17,013 14,841 14.6% 158,061 139,310 13.5% 1.0% 1.0% SOURCE: “Sales and Share of Total Market by Manufacturer,” Auto Sales, The Wall Street Journal Online, January 3, 2014, autosales.html. Audi Determined to Design a Better Experience Keogh was not the only top manager to lead the charge at the organizational level. “We’re not satisfied with what the customer service experience is like in our retail environment. At dealers today, people encounter a lot of unknowns, a lot of waiting, bottlenecks,” says Mark Ramsey, the general manager of digital and retail marketing for Audi of America. Faced with this challenge, Ramsey shopped for a design firm that specialized in so-called service design, which emphasizes traditional design esthetics and the actual process of buying a product. They chose US-based Continuum. More Functional and Modern Showrooms In late 2013 Audi began sharing more information about Continuum’s approach to changing the Audi showrooms. Keogh was even more encouraged, given the high level of dealer cooperation he received from his many visits to individual dealerships. Now customers will find smaller open consulting areas with ready information available by  and giant tablet screens. And behind the sleek and fashion forward showrooms are improved systems and software to improve the experience.

Other news coming out of Audi seems to indicate more of the experience is being modified than just the showroom and sales experience. For instance, the  that will be part of the sales experience in the showroom also will be extended to the parts and service departments. Audi drives this implementation by providing discounted  to dealers that don’t use them already and free software to those that do. Audi says 80 percent of its US dealers have already placed orders for the subsidized iPads.73

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