Your Less "Luxurious" Client Can Be More Lucrative
This Fortune 100 multinational automaker is a billion dollar money maker, making a few of the best selling cars in the world. It’s the captain of auto manufacturing in its home market. As their normal range of sedans particularly become competitive to Corollas and Civics, even in the US market, rising above the big 3, it left them no other way but up to branch out to market to the luxury market. Its engines have been featured among Ward’s 10 best engines for over 10 straight years and it seemed growth was endless for this company. Tip: Ambitious growth can never be too bad.
Backed by confidence from past results, this company launched its marketing campaign for its luxury MPVs during the bottom of downturn in Singapore. Though the automaker has a good reputation for quality and engineering, the response to its marketing for this luxury MPV was lacklustre, and management needed a change - and fast! Enquiries were not impressive. Feedback coming from their sales staff, who were targeting leasing companies, were not particularly encouraging either. To solve this, the company asked us to target luxury hotel chains, instead of their usual buyers who were leasing companies.
We would say yes only after double checking whether they tried to answer these critical questions first:
enquiries disappointing due to ineffective marketing campaign or
was it really about the product?
• Was the economic climate dampening sales or did they test whether other target market will bite?
• Was the branding weak or were the features not competitive?
Answers were hidden in the clouds, during that meeting. Tip: Clients know best to market their products, but always double check.
After a month of meetings with the manufacturer, we were awarded the project with the goal of reversing the negative results and bring sales up in 3 months.
The company were confident that they already knew that the hotel chains would be the right target market to tap moving forward for this luxury product line and that additional research wasn’t necessary. To be sure, we still recommended a conduct of an independent market research, as we often encounter instances of sales feedback not being the complete picture, and missing fragments needing to be found. Tip: See the forest through the trees, before you spend some serious marketing dollars.
After they had finally agreed, within 4 weeks, the dedicated AMG marketing research team has effectively qualified over 1000 potential buyers and found several important findings:
• Hotel chains do not own or purchase a fleet of luxury vans, but only hire them as and when needed from trusted leasing companies at special rates. Tip: Luxury hotel chains will give you feeling of luxury on a budget; luxury clients are those who will pay high price for that feeling.
• General view of leasing companies is that this luxury van is not as luxurious looking as the intercontinental brands, and that’s why they were not buying. The leasing companies were more comfortable with buying MPVs of intercontinental brands where they felt more luxurious as riding them would never get you mistaken for an ice cream vendor or a delivery man. Tip: If your clients do not feel expensive with your product, they won’t pay expensively for it.
• There were wealthy and growing families who also wanted to purchase luxury vans, not originally marketed to. Tip: Sweat the details, and you’ll see opportunities pop out like mushrooms.
Initially, the company objected to our recommendation to tap the leasing companies instead of hotel chains. We remained to suggest that special launch event should be organised, inviting prospects we had built and let them feel for themselves the luxuriousness of the MPV as well as its edge over intercontinental brands—to get their buy in. We created a Casino Royale-themed launch to raise the MPVs brand profile at a closed-door by invitation only networking cocktails. We held it at the showroom to make it more cost-effective and we had the AMG style the event. We mainly invited leasing companies and wealthy families, as well as accommodated requests from the company to also get hotel chain directors to attend, for brand awareness.
The luxury MPV effectively broke out and captured a slice of the market once dominated by the intercontinental brands of Mercedes and BMW. Several direct orders have been clinched on the very day from leasing companies and wealthy growing families and a few months after, orders were still coming in. Our client has overall realised almost 700% return for their marketing investment through AMG marketing investments, raising their estimated total returns to over half a million dollars! Tip: Your Less "Luxurious" Client Can Be More Lucrative.
They thanked us in the end for helping them challenge assumptions and achieve their dollar targets on the board - which, after all, is what makes winners in business.