BMW, Mercedes-Benz continue preferred-customer programs to boost relationships with customers

Article by Christian Andrei, on November 15, 2013

As the competition in the luxury auto segment intensifies, BMW and Mercedes-Benz are continuing their preferred-customer programs in efforts to boost their relationships with their customers. For instance, ten owners of a BMW 7-series sedan received racing tips from German ski legend Rosi Mittermaier last winter at Austria's Zillertal resort.

Last year, BMW started to offer perks to those who bought its flagship model in order to keep the loyalty of their clients. It wasn’t long before Mercedes-Benz followed with a similar program. They created these programs in response to downmarket shifts by the more exclusive Maserati and Jaguar brands. These initiatives are indicative of the tightening race as BMW and Mercedes compete to be No. 1 in luxury car sales.

The BMW Excellence Club, which began in July 2012, is presently only available in Germany. Any buyer of a 7 series instantly becomes a member. The program gives members the chance to go to exclusive events such as skiing with two-time Olympic ski gold medalist Mittermaier, a private golf tournament before the BMW International Open and an event at silversmith Robbe & Berking that had German television celebrity Thomas Gottschalk hosting and that provided food prepared by Michelin-star chefs.

Stephanie Boeckler, project manager for the BMW Excellence Club in Germany, said that the goal is to retain these customers with this desirable package that urges them to stay.

She said that it’s “important to be in contact" with its customers. Mercedes has made a promise to exceed BMW in sales and profit by the end of the decade and to achieve this, having a strong presence at the upscale segment is key. The automakers get a profit of around 15% of the sales price of the luxury sedans and coupes.

In comparison, there’s an average margin of about 9% across the premium segment. In addition, the vehicles add cache to models with higher volume such as smaller sedans, wagons and compacts. Juergen Pieper, a Frankfurt-based analyst with Bankhaus Metzler, said that there’s a strong halo effect on the brands “above and beyond the profit impact.” He explained that this is true particularly for Mercedes, which is the “traditional leader” in sales for range-topping luxury vehicles. [source: automotive news - sub. required]

Topics: bmw, mercedes-benz

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