1. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 1 does customer satisfaction sell (cars)? a BMW Belux case

2. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 2 Does customer satisfaction sell cars through loyalty and word of mouth? = loyalty = repurchase + cross selling + up selling = word of mouth = customer acquisition ? ++ +... + ? customer satisfaction maximum customer satisfaction = maximum sales ?

3. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 3 Customer Satisfaction for BMW Belux Customer satisfaction survey > 100.000 satisfaction enquiries per year customer dialogue method continuous, daily measurement RMDB CARMEN CRM database Integration of all data sources in BMW environment data quality = customer contact quality *contact history *customer profile optimization of contact interval Consulting for customer satisfaction improvement Online, dynamic reporting portal

4. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 4 Does customer satisfaction sell cars through loyalty and word of mouth? Customer satisfaction > 98%, yearly sales increase 8,5% but... Many examples of not loyal, satisfied customers... Many examples of satisfied customers not referring to other people... Satisfaction≠ guarantee for loyalty ≠ guarantee for word of mouth NO, customer satisfaction does not sell cars, but...

5. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 5 Does customer satisfaction sell cars through loyalty? = loyalty = repurchase + cross selling + up selling = word of mouth = customer acquisition ? ++ +... + ? customer satisfaction

6. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 6 customer satisfaction versus customer loyalty A Sale is the result of a customers choice between 2 alternatives. The alternative with the best perceived total value is chosen. expected fulfillment of needs + emotional bond with the brand + relational bond with wholesaler and dealer perceived total value alternative A expected fulfillment of needs + emotional bond with the brand + relational bond with wholesaler and dealer perceived total value alternative B objective: obtain the (comparatively) highest perceived total value in a profitable way

7. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 7 Customer satisfaction versus customer loyalty 1. expected fulfillment of needs (satisfaction) 2. emotional bond with the brand 3. relational bond with wholesaler and dealer perceived total value Three components = three possible domains of action ! changes over time (satisfaction tends to diminish as car ages)! ! efficiency principle (optimizing satisfaction >< maximizing satisfaction)! ! critical moments in product life cycle (replacement time, maintenance,...)!

8. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 8 Customer satisfaction versus customer loyalty 1. expected fulfillment of needs (satisfaction) 2. emotional bond with the brand 3. relational bond with wholesaler and dealer perceived total value 1. Optimizing the expected fulfillment of needs (satisfaction) Precise measuring and monitoring tool: which needs, how important, how satisfied Efficient action where needed: - modify product/service - communication 2. Optimizing brand loyalty Measurement of comparative brands- related perceived value 3. Optimizing relational bond Pay attention to customers on behalf of the wholesaler and dealer: right interval, right quantity, right quality

9. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 9 Does customer satisfaction sell cars through word of mouth? = loyalty = repurchase + cross selling + up selling = word of mouth = customer acquisition ? ++ +... + ? customer satisfaction

10. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 10 Customer satisfaction versus word of mouth Three required conditions to stimulate customers to spread positive word of mouth: context, motive and activator Motive Context Activator Offering an instrument/ content Improve awareness (Communication on reward principle) 1.improve personal prestige 2.Pioneers (and early adopters) 3.Exchange experiences Negative Positive 4.(Reward (MGM)) Customer has a social network: family, friends, acquaintances,.. Customer is socially active: societies, facebook, congresses, etc...

11. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 11 Does customer satisfaction sell cars ? Yes, customer satisfaction sells cars, but... -satisfaction is a requirement not a guarantee for sales -satisfaction has a cost -satisfaction is inefficient in terms of objective if selling is the final target Rephrase the statement: Demand strategy sells cars!

12. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 12 Does demand strategy sell cars ? Loyal, profitable, relationships Ambassadors Adjusting relationships provide Insight into relationships Acquire knowledge about relationships Reporting, consulting Structure and manage data Generate data: survey, sampling Customer loyalty program Word of mouth First line contact centre Social media monitoring Marketing events coordin. Mobility Service

13. Customer satisfaction versus sales Hugo Demaegd 21/09/2011 Page 13 Thank you for your attention, hope you are satisfied...