BMW is a German manufacturer of luxurious vehicles, engines, and motorcycles. It is one of the leading companies in manufacturing of premium products with its market extending to a global scale (Halwart, 2011). The company has subsidiaries in Asia, America, and Africa, all modelled to suit the needs of the targeted markets. As a manufacturer of premium vehicles, in the recent decades, the company has faced stiff competition on global scale from other companies that target premium markets where BMW’s Mercedes and Porsche compete, too. Therefore, there has been increased need to retain existing customers and regain the lost ones.
Customer Relationship Management (CRM)
Customer Relationship Management (CRM) is used in businesses to improve profitability of the firm through better customer service and satisfaction. CRM tools are employed to bridge the gaps that may exist between the company and their existing and potential customers (Moskowitz, 2011). Further, it improves the relationships between the organization and all stakeholders as well as product supply chain.
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Additionally, CRM involves all levels of interaction between the customer and the company. Therefore, it does not only include the business to customer (B2C) integral part but also the other stakeholders apart from the company and consumers; thus, CRM incorporates the concept of business to business (B2B) (Yun, Joseph, & David, 2003). As a systematic solution, CRM includes collection of data on interaction with customers, sales processes, customer behaviour, and prevailing trends in order to make analysis and predict the future market climate (Robson, 2005). Ultimately, CRM improves the customer experience with the organisation. CRM is achieved through a wide range of platforms where the organisation interacts with its customers including company’s website, social media platforms, and telephone calls. All the data received is used to improve the customer experience after undergoing rigorous analysis. While automated responses are used in many cases, human interactions are vital in CRM (Robson, 2005). Today, CRM is largely anchored on technology (Hasan, Rahman, & Khan, 2013).
The Role of CRM in BMW’s Operations
Customer relationship management has direct impact on sales and marketing, management, supply chain management, and after-sale services. To start with, CRM in sales and marketing enables the organisation to design strategies to identify new markets as well as to develop entry campaigns (Hasan, Rahman, & Khan, 2013). Furthermore, management and administration section benefits from CRM through planning and projection of the market trends giving a chance to make a variety of administrative decisions such as workforce distribution, budgeting, franchising, accounting, and policies on customer handling. Additionally, in management of supply chain and after sale services, CRM ensures that customer service makes the customer feel honored increasing customer loyalty and retention (Robson, 2005).
As one of the oldest automobile manufacturers founded in 1916, BMW faced a number of problems that reduced its profitability. Main problems revolved around sales and marketing, as well as maintenance of their sold products through servicing.
The Purpose of Using CRM in BMW
One of the company’s main claims is that they wish to serve all their clients at a premium level (Halwart, 2011). The company’s philosophy aims to ensure that the relationship built between the entity and the customer is positive. This includes the experience of customers with company’s dealers and servicing partners. The life cycle of BMW products is usually 7 years (Hasan, Rahman, & Khan, 2013). In this case, the company seizes the alternative of withdrawing their products after this period rather than struggling with their maintenance. This approach has been detrimental to the company since their competitors develop concrete maintenance strategies as well as find new markets for their old and refurbished products. In this regard, BMW has been forced to shift the approach to match the market trends (Moskowitz, 2011).
In their operations, BMW faced several challenges that led to their adoption of CRM tool, BMW “SEM CRM”. First, they had poor customer relations due to the long chain and diversity of the customers around the world. As a global company, it was hard to receive feedback from all of their customers but through BMW “SEM CRM” they were able to personalize their services to individual customers. Further platforms such as ‘My BMW’ strengthened the relationship between the company and the customers.
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Second, the company looked for means to reinitiate connection with existing clients. Apart from BMW’s premium product, there was increased competition from other manufacturers (Halwart, 2011). Consequently, the company lost a significant market segment. With little ability to predict the market development, the company was prompted to look for better methods through which they could reconnect lost customers while retaining existing customer base. BMW “SEM CRM” was essential in achieving this task.
Third, BMW was keen on improving their supply chain where the process from manufacturing through the dealers and service teams had better transition and led to improvement of customer satisfaction and general approval (Hasan, Rahman & Khan, 2013). One of the main competitive edges of BMW products is the superior quality. However, the product handlers needed to be of have high competence and share BMW spirit to transfer the company policy and belief to the customers (Moskowitz, 2011). Delivery of products and provision of high-quality servicing without interfering with the customers’ comfort in using the product was always key to the customer satisfaction. For the past few years, BMW has improved the manufacturing and ordering of its products bringing the relationship with potential customers to the next level. In this regard, the company has made significant progress into the market and reconnected with the old customers, which was their main success of using BMW “SEM CRM”. The company has been using the tool for about five years since 2011.
Period of CRM Tool Use
BMW saw the need to improve their interaction with customers from as early as 1998, and has continued to implement the new strategies since. By 2004, they had moved ahead of their competitors when they started working to ensure that their customers not only got satisfaction, but rather got enthused in dealing with the company. The 2004 tools were further enhanced through the incorporation of the ‘Owners’ Circle system’, which was advantageous for the company in the process of CRM adoption. The 2011 adoption of SEM CRM marked another milestone in the company customer interaction. It was then incorporated with new portals such as the ‘My BMW Connected drive’ portal which the company launched in May 2015.
BMW was heavily lauded when they adopted CRM in their customer management. On top of the CRM tool, there has been other platforms such as the ‘Owner’s Circle’ through which the company has endeared itself to more potential customers while increasing the loyalty of their existing customers. Customers could easily track the maintenance and financing status of their vehicles at the same time allowing second users to access maintenance history of their purchases (Hasan, Rahman, & Khan, 2013). Through such individualized platforms, it would become easier for customers to ensure that they obtain excellent servicing and maintenance for their automobiles. At the same time, the feeling of personal care would increase the customers’ satisfaction and would prompt a return for future purchase.
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To summarize, the aim of any organization is to increase customer base and profitability. Key to this is the management of customers with client retention being in focus. Observation and correct analysis of consumer behavior and changes in their preferences enhance organizational decision-making process, customer service, and eventual retention which directly reflect on the profitability of the firm. In additional, communication with these customers is vital as their opinion about the organization gives specific insights. In this case, an organization that adopts strategies making the customer feel honored and acknowledged is bound to succeed. Furthermore, such strategies are best achieved through customer relationship management tools such as those adopted by BMW. The corporate tool kit not only shapes the decision-making process of the top management but also helps customers receive better services and increase their satisfaction index. Through CRM tools, BMW has risen above its competitors at a global scale. Coupled with the adoption of the ever-growing technology through Internet, it might take competitors a long time to match satisfaction levels of BMW’s customers.