CX Beyond the Car – The Mercedes Way
The trigger for this Outside In post not only comes from a recent newspaper article highlighting how Mercedes is looking beyond the car alone to render its true ‘Mercedes’ Experience for their Customers. But, also from an old (ish) POV I had compiled on Mercedes Experience – that time on its Services’ Experience. Combining both insights and obviously adding new learnings, I think we will have a focused read on Delivering CX beyond the Car – The Mercedes Way…
Let’s speed in…
Context for CX-Focus
Traditional automotive retail model has a few shortcomings and true CX cannot be delivered until there are changes made to experiences across the value chain and customer lifecycle, impacting the business model. The opportunities of digitalization can help create new ‘experiential’ differentiators, away from product differentiation (which is anyway coming down steadily)
According to an Accenture ‘Customer Reboot’ report, Customer Experience will (increasingly) determine a brand’s perception in the future. In the automotive industry context, it means Brands need to extend their experiences beyond the Car – to include Dealers & Service Centers – and cover all the Online and Offline Customer Touchpoints
The landscape of Automotive Customer’s ‘Experience’ Expectations has been nicely captured as below:
The Mercedes Experience Approach in India
Look at CX holistically and not just create a ‘marketing element of CX’
Increase transparency between the luxury carmaker and its customers, as well as aid Mercedes-Benz's franchise partners
Deliver Customer Experience on a ‘Daily Basis’
Digital Approach to improve Price Transparency and Product Discovery (Variants, Colors, Etc.)
Offer Subscription Services, for multiple customer requirements – Explanations, Reminders, Product Information, Etc. – with Omnichannel Touchpoints
Car Screens to look and feel like Android Platform. Additionally, they are making investments in their own operating system called MBOS. The idea of the system is to make the entire customer journey on the cloud – from Production to Commerce (Read more at: https://www.motorauthority.com/news/1132715_mercedes-benz-developing-own-operating-system-for-2024-launch)
The Mercedes Sales Experience in India – Direct to Customer Model – Retail of the Future (ROTF)
Launched since 2021-22, this new model aims to increase transparency between the luxury carmaker and its customers, as well as aid Mercedes-Benz's franchise partners (dealers). We must be cognizant here that in the automotive industry, the dealer is possibly as important a customer for the carmaker as their end consumer is
The highlights of the model are:
Sales model will only be applicable on the new car sales business
Mercedes-Benz will now own the entire stock of vehicles
Customers will purchase their cars directly from Mercedes (from Offline and Online Channels)
Dealers can now have zero inventory and face reduced (holding) risks
CX Advantages
Ease of Billing: Customers will be purchasing the car directly from Mercedes-Benz, which means their cars will be invoiced directly from the carmaker and not the dealers
India-level Pricing Transparency & Matching: All customers across India, will be offered the same prices, negating the need to negotiate with dealers to price match and chase discounts
(Structured) Discounts Will Exist: While discounts were earlier offered by both, Mercedes as well as the dealers, they will now be set just by the company. The offer will eventually come out of the Mercedes’ system. So, instead of variable discounts, the same offers will be extended to everyone across the country
Customized Offers: They will have special offers for working professionals, existing Mercedes customers, corporate discounts, etc. which can be selected at time of quotation generation
Larger Assortment of Cars: Customers will have access to a considerably larger pool of cars to select from, as Mercedes will own its entire stock of cars, and make it available for all
Seamless Local Access: Test drives will still happen at local dealerships, for customers to get a physical ‘look and feel’ of their prospect models. And the same dealers will be available for servicing their cars as well
Convenient Delivery: Sales and delivery of the cars will still be facilitated by the local dealers to increase the convenience factor for customers
Reduced Waiting Times: Though dealers won't financially invest in the inventory, cars will still be present at showrooms. So, if the exact spec of the model a customer is planning to purchase isn’t available with the dealer nearby, it can be brought in from another dealership in the Mercedes ecosystem. Earlier, an order of such a model would have to be placed with Mercedes and shipped from the factory, extending the lead time. So, under the new system, a customer’s waiting periods are expected to reduce drastically
Reduced Inventory Risk for Dealers: There is reduced risk for the dealers, especially in tough economic times which may impact regular stock turnover
Relationship and Marketing-focus for Dealers: Dealer can now focus on establishment, maintenance and growth of relationships with customers, as well as enabling and simplifying the process of sales and delivery of Mercedes cars. They will also continue to conduct local marketing activities and initiatives
Keeping Other Dealer Interests Intact: This new sales model will only be applicable to the sale of new cars and will not change the functioning of the other sections of the business, such as customer services, pre-owned cars and accessories business
Better Pricing for All: A centralized approach to selling cars could benefit customers in the long run. They have much better transparency of what's happening in the market and can do better inventory management and planning – which will lead to operational savings, giving room to extend better end-customer pricing. Also, a leaner retail network and lower overheads could ultimately encourage Mercedes in bringing down prices by 1-2% across the board, going forward
The Mercedes ‘me’ Service Experience – Germany Best Practice
Mercedes is evolving its Service (Experience) as a Business, nudging towards Customer Loyalty
In Conclusion
While automotive executives are likely to be more focused on future-related issues such as new energy vehicles, customers are probably more concerned with practical, everyday ‘Experience’ considerations such as dealer discussions and pursuing car repairs and maintenance. According to the Accenture report, carmakers tend to offer a fragmented, and sometimes even irrelevant, brand experience causing multiple pain points across the customer lifecycle
Mercedes has shown that it is proactively reconfiguring both its Sales and Service Business Models, which helps them, meet the key expectations of both its core customers – End Consumers and Dealers. Their initiatives can probably serve as a template for other automotive players looking to transform their Customer Experience (CX) Quotient…
References & Sources:
1) Mercedes Goes Beyond the Car for its Customer Experience:
2) Accenture – Customer Reboot Report: https://www.accenture.com/_acnmedia/PDF-169/Accenture-Customer-Experience-Reboot.pdf
4) Mercedes Retail of the Future Model: https://www.autocarindia.com/car-news/mercedes-india-announces-new-retail-of-the-future-sales-model-420991; https://www.carandbike.com/news/mercedes-benz-india-launches-the-retail-of-the-future-sales-program-new-method-of-selling-vehicles-2583936
5) Mercedes Direct to Customer Sales Model: https://www.autocarindia.com/car-news/what-does-mercedes-direct-to-customer-sales-model-mean-for-you-421003
6) Mercedes me as a Service Brand: https://www.logo-designer.co/mercedes-benz-launches-new-service-brand-mercedes-me-logo-design-digital-marketing/, https://www.motorauthority.com/news/1090758_mercedes-me-service-brand-launched-at-geneva, https://www.autoevolution.com/news/daimler-launches-revolutionary-mercedes-me-service-brand-photo-gallery-77935.html