CUSTOMER RELATIONSHIP

MANAGEMENT
Group Project

Stream5 Before Dawn

470486379 490147094
470101645 470152485
480477101 480291460
490152696
 EXECUTIVE SUMMARY
As the CRM division, this report details an ACURA strategy report for BMW. Our findings from R Studio

and Tableau visualization concludes that the current market situation highlights the age ranging from 18-

45 to be most valuable for BMW and the highest percentage return for CLV. A smaller segment that will

be focusing on for CRM plan is the age group between 18-25 since several articles pointing out BMW focus

more on ‘young generation of customers’ (Long, 2018) that aging between ‘18-25’ (Saxena, 2019). Besides,

a multidimensional model was made to present segmentation in depth and a few assumptions about

targeting specific models especially Model 1 and states were proposed based on visualization.

The CRM strategy plan will focus on three strategies from ACURA: acquisition, retention, and advocacy.

Acquisition: In order to execute an acquisition strategy, it is decided to create a partnership with a gaming

company to attract targeted customers. People in the age group ranging from 18-25 are highly influenced

by social media, trends, and video games. Thus, it proposes BMW to collaborate with a popular gaming

company such as Nintendo to create a character influenced by Model 1 (BMW 1 Series). This creative

strategy has been proven to be highly successful in the past and will surely create a buzz in this age group.

Retention: We plan to implement a website dedicated to BMW customer service to create a personalized

relationship with our customers. We will also create videos from experts for frequently asked questions and

safety features, as well as create a blog posting option for customers to start discussions both with BMW

staff and share their experiences with each other. Furthermore, we will offer perks such as Uber taxi

coupons to customers if a recall was to occur. By doing so, we can create an image that BMW is a loyal,

and trustworthy brand. We will also include other services geared towards the younger group such as pick

up services at the airport, or easy access to renting a BMW car overseas.

Advocacy: Our targeted customers has the highest attendance rate for electronic music festivals. Therefore,

we recommend BMW to partner and sponsor a local Electronic Music Festival. Grabbing this opportunity

may help to demonstrate BMW’s auto-driving special features. During the show set in between songs,

BMW can work together with the music festival sound and light team and produce unique lighting and

sound with BMW colours. This innovative approach can create word-of-mouth buzz for our targeted

customer.

I
 Table of Contents
1 INTRODUCTION .......................................................................................................................1
2 SITUATION ANALYSIS .............................................................................................................1
2.1 Business Environment Analysis ....................................................................................................... 1
2.1.1 Economic Factors .................................................................................................................................................. 1
2.1.2 Socio-Cultural Factors.......................................................................................................................................... 1
2.1.3 Technological Factors ........................................................................................................................................... 2
2.1.4 Competition Landscape ........................................................................................................................................ 2
2.2 Evaluation of BMW’s Current CRM ................................................................................................ 3
3 CUSTOMER SEGMENTATION.................................................................................................4
3.1 Data Processing............................................................................................................................... 5
3.2 Multidimensional Model .................................................................................................................. 5
3.3 Creation of Personas ....................................................................................................................... 6
3.3.1 CLV Comparison between Each Persona........................................................................................................... 6
3.4 Marketing Segments Measurement .................................................................................................. 7
3.5 Factors Analysis .............................................................................................................................. 8
3.5.1 Factors Analysis via R Studio .............................................................................................................................. 8
3.5.2 CLV and The Key Four Factors Analysis via Tableau ..................................................................................... 9
3.5.3 Other Findings via Tableau ............................................................................................................................... 10
3.6 Persona Sample ............................................................................................................................. 11
3.7 Customer Decision Journey ........................................................................................................... 11
3.8 Competitor’s Segmentation ............................................................................................................ 12
3.9 Limitation of The Segment Analysis ............................................................................................... 12
4 ACURA STRATEGY .................................................................................................................13
4.1 Acquisition Strategy ....................................................................................................................... 13
4.2 Advocacy Strategy.......................................................................................................................... 14
4.3 Retention Strategy ......................................................................................................................... 15
4.4 Key Performance Indicators (KPIs) for CRM Activities .................................................................. 16
5 CONCLUSION .........................................................................................................................16
6 REFERENCES.........................................................................................................................17

II
 1 INTRODUCTION

This report details an analysis of BMW’s customer segment as well as creating a substantial CRM strategy

report. It will first analyse BMW’s current customer segments, splitting potential customers into different

groups based on criteria such as age and location by using data processing. Then it will move to use the

data to provide a detailed analysis of values, attitudes and lifestyles of the current customer base. From this

information, it will compare each of the customer’s personas to identify observations regarding the levels

of CLV that each of segment has. Based on visualization results, it will then select a segment that is

considered as best fitted for BMW’s ACURA strategy. Lastly, it will provide an action plan and

recommendations for further CRM strategy by using ACURA.

2 SITUATION ANALYSIS

2.1 Business Environment Analysis

2.1.1 Economic Factors

Economy fluctuations and circumstances influence BMW’s performance massively. As OECD reported in

2018, Australian economy has been adjusted to the legacy of the global financial crisis, for which grow rate

below expectations in 2017, however, it has been forecasted to increase by nearly 3% in 2018 due to the

increasing government investment and individual disposable income. Australian trade liberalization policy

also contributes to BMW group to invest more regions where constraints are less. In addition, the low

interest rate led by accommodative monetary policy has incentivized Australian economy (Blue Ocean

University, 2019).

2.1.2 Socio-Cultural Factors

Social and cultural factors have direct effects on BMW manufacturing (Haseeb, 2017). Australia is

multiracial and multicultural with 3 social classes contained: the working, middle and upper class. The

main income source of upper class typically between 5 to 10 percent with property, capital and ownership

(Frue, 2019). In addition, tendencies in local and worldwide scales and their influences need to take into

considerations by BMW company in business strategic analysis as well. The change patterns affect
1
consumers’ purchasing capabilities. For example, changing family structure such as rising population of

homosexual marriage and single-parent households may affect consumer expenditure regards to luxury

automobile like BMW (BMW Group Company Report, 2016). Furthermore, recognition of environment

production will evoke people awareness of industrial pollution emission. However, BMW acculturates

successfully and accesses significant profits (Haseeb, 2017).

2.1.3 Technological Factors

Australia is one of the most technological innovation advanced countries all over the world with more

efficiently applying new technologies than other countries in similar level. There is obviously tremendous

growth in technology area in recent years, with 4% increased and achieve to $63 billion in 2018(David,

2018). The optimal strategy for leading an automotive brand to be successful is innovation and

customization. BMW group adapting the progressive technology such as leisure functions including Wi-Fi

and Bluetooth into automotive industry. Besides, mobility innovation has also utilized by BMW, which

cars can automatically drive and parking (Frue, 2019). The positive technology factors enable BMW

company to own competitive advantages compared with other automotive corporations. The creatively and

sophisticatedly designed will conquer lessen profit margins of automotive domain. It has been argued that

different restrictions and modifications will lead environment to be polluted. However, efficient embedded

design in BMW technology improve the customer experience with high quality and functionality provided

(Haseeb, 2017).

2.1.4 Competition Landscape

BMW is one of the leading automobile manufacturers in the worldwide, owning 3 superior sub-brands with

BMW, MINI and Rolls-Royce respectively. Its distinguished performance with excellent standards in

accordance of aesthetics, mechanics and capacities, and delivered by BMW’s predominance in engineering

and technology innovation (BMW, 2019). The major two competitors for BMW in Australian are

Mercedes-Benz and Audi (Passport, 2019). BMW’s target customer mostly formed by younger drivers,

while Mercedes major direct to older drivers (Sohail, 2017). Mercedes-Benz company implied Full Vehicle

Protection and provided Permagard Automotive products to enable customers to enjoy the intimate services.

Interior protection including leather, carpet and fabric were recommended to avoid harmful UV rays.

2
Special permagard plasticised coating and personalized window tinting support exterior protection. As for

Audi company, they launched corporate program with membership benefits, including complimentary

scheduled service within a limited scope, supply Audi Care roadside assistance and specialized finance

consulting services (Car assist, 2019). Compared to these competitive brands, BMW brand is famous for

high recognition and reputation by producing advanced engineering vehicles, which provides luxury

driving experience to customers that other brands cannot achieve (Jurevicius, 2016). Nevertheless, BMW

company’s product portfolio absence of differentiation, to be more specific, commercial vehicles and

busses are beyond the confines of BMW manufacture.

2.2 Evaluation of BMW’s Current CRM

As a luxury car manufacturer, BMW's philosophy is that Customer relationship management is an important

method to actively approach customers and potential customers and build up and intensify business

relationships in a positive way (2004). BMW Group offers premium products and complementary service

for customer relationship management via emails, phone calls, and dealer network.

In general, BMW’s current CRM activities include the Virtual Center with modules such as Car

Configuration, the used car market offerings, or personalised Web pages such as “My BMW” (Allied

Newspapers, 2004). The core of BMW’s CRM is the premium quality of the product and service to attract

and maintain the customer. For customer acquisition and retention, BMW invested large effort in R&D to

anticipate the needs and add value for building digital products in the car. For instance, BMW combined

aesthetics and technology together in car design and since 2018, the group put a large effort in the

development of driver assistance system and autonomous driving (BMW Annual report, 2018). Besides,

BMW offers also offers virtual reality options for the customer to explore the product interactively and

combines it with social media which connect to wider customer and promotes to a larger audience. To offer

a personalised experience for the young customer, BMW had designed its website to become more user-

friendly and then provided videos of a particular car to increase buyer’s engagement.

The excellent product substance of BMW brands accounts for the success of customer relationship

management. BMW's production plants have repeatedly won prizes for the first-class quality of their cars

3
in recent years (Allied Newspapers, 2004). Since BMW having worked with its CRM package which

collects important customer data and assesses customer’s requirement, it is convenient for BMW to product

customer-oriented vehicles. Due to the fact that BMW is a worldwide multinational automobile

manufacturer, a large amount of high-quality customer data is easily accessible and analysed. However, as

a car manufacturer, BMW can’t talk directly to its customer without the car dealer that would influence the

accuracy and timeliness for collecting customer data. In current CRM activities, BMW’s practice of

targeting customers for premium segment products contains the operational cost which is above the industry

average (BMW Company report, 2016). Lack of engagement in cost optimisation can be considered as one

weakness. Product functional issues not only affect BMW’s reputable brand image but damage customer

relationship. For example, BMW has recalled a large number of vehicles to replace Takata airbag, but this

recall problem also upsets customer about safety ((BMW Company report, 2016).

If BMW plans to improve the effectiveness of current CRM, it could make full advantage of social media.

Because the megatrends of empowered individuals especially young people and rapid development of the

Internet, digital marketing is inevitable and social media provides the opportunity for the BMW Group to

interact with its customer. By enhancing the understanding of the importance of social media to generate

customer-related information and justify customer preference, BMW could have the capacity to interact in

new and exciting ways. In the future, BMW could exploit CRM programs and explore untapped customers

segment such as the young generation to increase market size.

3 CUSTOMER SEGMENTATION

Customer segmentation and targeting are the footstone of the marketing efforts of a company, which helps

company to optimize profits and allocate resources preciously and effectively. Basically, segmentation

represents splitting potential customers into different groups based on specific criteria such as age, location

and etc. Firms can use such segmentation to develop products and services that are particularly appeal to

specific groups to achieve interest maximization. In this case, segmentation was conducted based on a given

hypothetic BMW customer sample dataset. After data processing, a multidimensional model (Figure 1) was

made for detailed presentation of characteristics of demographic, geographic and etc. in market segments.

4
Then, it is used demographic and psychologic attributes to segments customers, which will be further

explained in following part.

3.1 Data Processing

Several areas of given dataset were processed in order to conduct ANOVA and visualization analysis, key

processing parts including:

• A new field (CLV of each customer) was calculated based on information provided

• Age was divided into six sections each with a 10-year-range in a bid to find different customer

group’s potential characteristics and needs accurately

• NPS was separated into three groups contains detractor, passive and promoter

• Two new fields were created (Marriage and Life Stage) based on size of household

• All records of models were integrated into one field

• Field of model recalled were split into three parts while only model 1 and other were identified as

having recalled cars.

3.2 Multidimensional Model

Figure 1. Multidimensional Model

5
 3.3 Creation of Personas

‘VALS’ (Values, attitudes and lifestyles) framework (Kotler, 2000), a famous psychographic classifications

approach combined with manually segmented age group was adapted to establish personas. Detailed

explanations of each persona are shown as below:

• ‘Youthful Experiencers’: Young university students and newly graduates who is enthusiastic in

experiencing the world and spending a comparatively high income on fashionable staffs.

• ‘Modern Makers’: Young professions with bachelor or master’s degree, probably married with

several children, family-oriented and prefer products with a functional or practical purpose.

• ‘Modern Thinkers’: Middle-aged, good educated mature innovators with high income, probably

worked as architects and pay more attention to value in products.

• ‘Upper Achievers’: Middle-aged business man who has a successful career and is work-oriented,

favouring prestige products to signal success and status.

• ‘Liberal Believers’: Elder, rich, open-minded professionals often with families, often prefer trying

high-end different products within different well-known established brands.

• ‘Post Believers’: Aging, wealthy, traditional thinkers, probably at the final year of career or retired,

considering luxury and comfort over product performance, and loyalty to familiar brand.

3.3.1 CLV Comparison between Each Persona

Persona Age Group % No. of Records % of Total CLV Difference

Youthful Experiencers 18-25 20.67% 21.11% 0.44%
Modern Makers 26-35 28.12% 28.87% 0.75%
Modern Thinkers 36-45 15.14% 15.37% 0.23%
Upper Achievers 45-55 14.92% 14.58% -0.34%
Liberal Believers 56-65 11.56% 10.85% -0.71%
Post Believers 65-75 9.60% 9.24% -0.36%
Table 1. Comparison Results of all the Personas

Based on above table, modern makers, youthful experiencers and modern thinkers are the top three personas

creating the most profits for BMW, when liberal believers are the least profitable. Apparently modern

makers are the most profitable persona with a 0.75% difference, while youthful experiencers slightly behind

with a 0.44% difference. However, with an example of BMW’s short films in 2001, Saxena (2019) implied

BMW marketing strategy positioned BMW as an aspirational brand connects with youthful adult aged

6
within 18-25. Similar to Saxena’s finding, in Long (2018)’s news article, BMW was mentioned in

conducting an ‘edgy’ strategy for the purpose to attract new generation of customers. Therefore, in

following parts youthful experiencers will be considered as the most profitable persona.

3.4 Marketing Segments Measurement

After identified the segments, it is necessary to access the viability and effectiveness of the segments.

Marketing segments that meets the criteria for good segments including measurable, substantial, actionable

accessible and differentiable will increase the opportunity of successful segmentation. (Lannuzzi, 2014)

The following section will give a close analysis on those criteria:

Measurable: An ideal segmentation should be easy to identify with the size of the market. The variables

used in this case such as age group, size of household and CLV could be clearly categorized into several

groups and measured with mathematical methods for further analytics.

Substantial: The chosen segments should be large enough to be profitable, and cover the expense investing

on the market research. Based on the given sample, each segment has thousands of records. However, the

company’s market research budget is required to further determine if the segments would be profitable.

Actionable: The company should have the knowledge and resources to finally sell their products to the

target customers in the segment. Our team obtained the data from the BMW company. However, it is found

that the data is not sufficient to conduct a more insight segments analysis. This view of point would be

further discussed in the 3.X ‘limitation of segments analysis’ section.

Accessible: Accessible refers to the ability to serve and reach the customers in the segments. Our team did

the segmentation based on the historical data (customers who at least have one BMW car). Thus, the

company is able to reach the customers in the five segments.

Differentiable: A good segment should be externally heterogeneous, but internally homogeneous. In other

word, the customers within the segments share common features and similar preference, and each segment

has different characters which could be clearly identified. Consequently, the target customers in segments

7
of each promotion and campaign would not overlap. For example, in the BMW case, “Modern Experiencer”

and “Upper Believer” focus on different size of household and social class. Specifically, “Modern

Experiencer” are customers who are single and in middle class, while “Upper Believer” are customers who

are married with children and in upper-class.

3.5 Factors Analysis

3.5.1 Factors Analysis via R Studio

In this part R Studio is used to find the dominant factors that having impacts on CLV of the given dataset

for the convenience to do further customer segmentation analysis via Tableau.

Figure 2. Result of Multiple Linear Regression between CLV and Each Other Key Factor

Table 2. Result of Correlation Matrix among All Key Factors

Table 3. Result of One-Way-ANOVA between CLV and Each Other Key Factor

Figure 3. Result of One-Way-ANOVA (Control Factors) between CLV and Other Key Factors
8
 Table 4. Significant Result of Two-Way-ANOVA between CLV and Other Combined Factors

Observation

According to above five figures, Age, NPS, Loyalty_Program and Models_Recalled are the four factors

most influenced CLV, while some of them except CLV also have moderate correlation interactively.

3.5.2 CLV and The Key Four Factors Analysis via Tableau

In this part Tableau is employed in a bid to complement and elaborate R results as well as identify potential

relationships between average CLV and the four Key factors. The variable NPS has been categorized as

detractor, passives and promoters. Furthermore, NPS for BMW Company is calculated as -21, which means

there are 21% more detractors than promoters.

Figure 4. Multidimensional Factors Analysis

Figure 5. Single Factor Analysis

9
Observation

Based on above two figures, it is easily found that majority of passive customers who registered loyalty

program without owning recalled cars have the most average CLV, while in the meantime customers within

age group of 18-45 also have the most average CLV.

3.5.3 Other Findings via Tableau

Figure 6. Youthful Experiences Analysis by Model by State

Observation

In Figure 7, from green bars’ comparison, Model 1 is the most popular car among young experiencers with

a leading creation of total CLV. However, when comprising green bars and pink bars together it found

although with a relatively low proportion of customers, model 5 special generates greater total CLV. Thus,

the assumption it made is when making market strategy pertain to 18-25 age group BMW Australia can

focus more on Model 1 that has the most demand as well as Model 5 special that creates a greater CLV, in

a bid to improve profits. Then look down at the two maps, each map shows popularity of model 1 and

model 5 special respectively among states, with colour depth represents popularity level. Both car model is

most popular in NSW, VIC and QLD. Therefore, the assumption made here is BMW Australia could focus

more in these three states when conducts marketing strategy.

10
 3.6 Persona Sample

Figure 7. Sample Persona of Youthful Experiences

3.7 Customer Decision Journey

Customer decision journey is a marketing model that illustrates the procedure of the customers purchase

decision making. (Court, Elzinga & Mulder, 2009). The factors in the model include awareness, interest,

information-seeking, purchasing, repurchasing, switching, advocacy, terminating relationship. Following

is the application of the model in the ‘youthful experiencers’ segmentation. In the awareness phase, the

customers are unaware of the company’s products and they do not even know they have needs on the

products. During awareness phase, the company should reach the ‘youthful experiencers’ and let them

acknowledge the products through their preferred channels. According to the persona analysis, the ‘youthful

experiencers’ are more likely to influence by social media and referrals. For example, launch Instagram

campaigns that encourage the target customers to share product photo among their friends would be an

ideal way to raise concern within the ‘youthful experiencers’ segments. When the customers are aware of

the products, a certain proportion of the customers will start considering the products based on the degree

of success of the campaign. This is interest phase. For information-seeking phase, ‘youthful experiencers’
11
are proficient in internet, so that they will find more information on the channels include social media and

other websites. In addition, ‘youthful experiencers’ are more likely to care about what other said. The

marketing team of the company could do sentiment analysis of their social media comments and carefully

manage their official social media account. In purchasing phase, ‘young experiencers’ may concern about

their unique experiences. Due to the fact that the customers in the chosen segments are young (18-25 years

old), they have a relatively high chance to repurchase other products of BMW. Repurchasing phase may

happen when they jump to the other customer segmentation. To be specific, most the ‘young experiencers’

are unmarried, but when they get married and have child, they will seek for repurchasing a model that is

more suitable for family traveling. However, the situation only occurred when the customer is loyal to the

brand. Therefore, the company should establish a close relationship after the target customers purchase the

product to increase brand loyalty.

3.8 Competitor’s Segmentation

According to the IBIS world database, the two major competitors of BMW are Audi and Mercedes Benz

(IBIS). Between these two, Audi paid more attention on the younger age group, which shares a similar

feature of the chosen segment ‘youthful experience’. Audi serves the segment mainly by establishing a

young brand image and trying to connect with ideas of young people. A whole youth angle plays an

important role in the brand culture of BMW. For example, Audi introduced the model Q2 in 2017 and

labelled the model as "youthful and provocative in its styling"; "rugged and youthful"; "young and

assertive" and "at first glance the Q2 already shows its muscles - with broad shoulders and angular styling,

it is brimming with energy and confidence" (Campbell, 2017). To sum up, most of the design details are

driven by the customers bases. In addition, Audi is not worried about that the marketing segmentation only

focus on the young customers’ needs would be too narrow, because they believe that older customers tend

to buy things that make them looks younger.

3.9 Limitation of The Segment Analysis

The segment analysis is based on the datasets include the factors of model type, gender, age, size of

household, NPS, whether in loyalty program and location. However, these variables are not enough to have

a complete insight on the demographic of the segments. Internally, our team would like to obtain the
12
customers’ annual income, race and education level to have a more in-depth understanding of the customers.

Moreover, our team are interested in the company’s marketing research budget to further determine if our

strategies are actionable and practical. Externally, having the customer’s demographic, geographic,

psychographic and behavioural data and the annual report of the major competitors, such as Audi and

Mercedes Benz would help our team to generate a more critical segment analysis.

4 ACURA STRATEGY

4.1 Acquisition Strategy

According to Digital Australia Report (2018), over 85% of 16-25 youth in Australia are gamers. In order

to attract the young groups, BMW as an automobile company, can collaborate with gaming companies. For

example, in 2017, BMW partnered up with Arena of Valor, the most popular mobile gaming company with

more than 200 million registered users and 50 million daily active users. Together they integrated a stylish

character, Zhaoyun, into the game featuring BMW 1 series. In this case, the character Zhaoyun, is a famous

heroic historical character in China. Through this campaign, the webpage received over 13 million views

and the video created received over 24 million views in the span of three month. The BMW 1 series page

views also sharply increase by 1 million views in one month. (Jiguang Big Data, 2017). BMW and Arena

of Valor’s collaboration featuring Zhaoyun and 1 series left this demographic a lasting impression.

Therefore, by using innovative, creative, and younger elements to approach youth users can create a

communication and buzz towards this demographic segment. This successful cooperation can create a long-

term acquisition strategy. Similarly, BMW can get in touch with another gaming company: Riot – company

of League of Legends. Based on the information from Digital Australia Report (2018), in Australia, PC is

the most popular device used to play games which is 82% of users’ choice. Among all the PC games,

League of Legends had over 100 million users which is the most influential PC games in 2017. (eSports

Statista, 2017). Similarly, they can work together to design new characters and add BMW brand elements

to the game.

The cooperation with game companies caters to the preferences of young people that will be more

acceptable for young people. The continuous appearance of BMW elements in the game can easily leave a

13
deep impression on young people. Blythe (2013) stated in his report, “People would more likely to purchase

a product or from a brand they were familiar with”. The characters in the game can create an vivid and

attractive image for BMW vehicles.

4.2 Advocacy Strategy

Our strategy is to sponsor Electric Gardens which is held in Sydney, Melbourne, Perth, Adelaide and

Auckland in February. Deemed as a hot, wild, and successful festival, Electric Gardens attract thousands

of young people (Natalie Wolfe, 2019). We plan to put the images of BMW model1, model5 and

model5special on the big screen in between sets during the festival. Based on our data analysis, we have

chosen BMW model1, model5, and model5special because these three models have high buying power and

bring the highest profit for this demographic. We want to use hundreds of light spots to visualize the image

of these three models of BMW when the DJ changes from one song to another popular song, adding their

own signature engine sound as the car model is demonstrated in front of the audience. The engine sound

will only last for a second used as a sign to switch from one genre of music to another, and the image of

the car will disappear when next song comes. During this time, the DJ could interact with the audience to

pay attention to this switching scene such as give gestures to inform audience that the appearance of the

cars means that the music will be different. This combination will not only show the swanky aspect of the

cars without affecting the enjoyment of the audience, but also leave audience an impression of great driving

experience of BMW.

For the audience, this music festival is a place for hours of dancing and indulgence. It is not only

entertaining and positive, but also it induces a lot of amusement among audience. Our data analysis show

that people ranging between 18 to 25 have relatively higher NPS score, therefore, especially young people

are more likely to share attractive car scenes to their friends. For existing customers, this experience would

also make them feel good about their purchase, hence, they would be more willing to share the scene with

their friends.

After the event, we propose to send emails out to festival participants to ask them “How likely are you to

recommend the BMW to your friend or colleague”, and through collecting the feedback, we could measure

the Net Promoter Score (NPS). We can collect all the comments that are related to the BMW showed in the

14
festival and analyse how people respond to this cooperation. Meanwhile, we could measure the

effectiveness by analysing the change in the number of clicks on the website and the number of online or

telephone inquiries.

4.3 Retention Strategy

Empirical evidence shows that satisfaction and trust have strong positive effects on customer retention

(Ranaweera & Prabhu, Ranaweera, C., & Prabhu, J.2003). Our idea is to rebuild an efficient and effective

customer service relationship by creating a website geared for customers to directly outreach to BMW. This

website will have knowledgeable dealership staff, and professional car technicians ready to respond to

customers’ issues and complaints. This strategy is to ensure customers with a commitment that BMW will

respond to complaints efficiently and is always ready provide distinguished customer service. When

customers log onto BMW’s customer service website, they are greeted with fast response with sales staff,

feedback from engineers, and concrete appointment dates to fix issues regarding their vehicle. If a

customer’s car is reaching close to the warranty, customers do not need to worry about extra cost over the

warranty period.

Higher service recovery efforts effectively improve customer satisfaction in the case of product or service

failure (Maxham,1999.) By responding to customer complaints efficiently, customer complaint can be

significantly reduced, therefore increasing customer satisfaction. BMW can also post videos on their

websites featuring BMW experts answering customers’ most frequently asked questions and

demonstrations of procedural operations for when a customer comes in contact with an emergency. We will

also add a blog feature to the website where customers can upload their concern and a BMW expert would

be able to direct a solution. This blog will also allow customers to share their experiences and stories with

each other.

Moreover, if BMW recalls defective cars due to product failure, we suggest BMW to offer 12 months free

individual digital services for these customer and Uber taxi coupon or tax coupon for each customer to

reduce their inconvenience. Our findings suggest that justice dimensions restore consumer’s satisfaction

better and can later rebuild trust. Therefore, tangible compensation stated above could potentially win back

lost customers. BMW could also replace new cars for customers to decrease negative emotion of customers.

15
In addition, the website created by BMW can build customers’ trust with the believe that they have been

treated with honesty, justice and courtesy in their interactions with the firm, and the interactional justice

would make customer reconsider the company. (Maxham & Netemeyer, Maxham, J. G., III, & Netemeyer,

R. G. 2002).

For retention towards the younger customer, the company could also provide a different service or product.

For example, BMW could provide free pick up service at the airport using the specific model, or BMW

could provide existing customer the discount for renting BMW cars overseas. BMW could also provide

customized gift for their customer in their birthday according to their wants and needs such as a BMW

baby-seat or BMW golf sports packages.

4.4 Key Performance Indicators (KPIs) for CRM Activities

KPIs evaluate the success of a specific activity company engages. Many typical KPIs can be linked to

strategies proposed in this report. One of the most significant KPI for proposed activities is customer

satisfaction. Since the key to keep customer retention rate at a high level and make activities more attractive

to targeted segments is to improve customer satisfaction.

5 CONCLUSION

The CRM strategy proposed in this report can help to enhance the competitive advantages of BMW

Australian by conducting loyalty program, partnership with fashionable companies and sponsorship

activities. Generally speaking, following these three ACURA strategies will help to augment the customer

loyalty of target profitable customers and optimize profits for BMW in the future. Additionally, BMW

could combine with modern technology such as business intelligence（BI）and analytical tools when

proceeds market strategy, which will make customer segmentation more accurately and market strategy

execution more effectively. To sum up, how BMW use such advanced technology to turn data into insights

and action would be a footstone for them to survive and excel in today’s turbulent business context.

16
 6 REFERENCES

Australia Economic Snapshot - OECD. (2019). Retrieved from

http://www.oecd.org/eco/outlook/australia-economic-forecast-summary.htm

Allied Newspapers Ltd. (n.d.). BMW's premium brand strategy and CRM. Retrieved from
https://www.timesofmalta.com/articles/view/20040829/motoring/bmws-premium-brand-strategy-
and-crm.113864
Blythe, J. (2013). Consumer behaviour (2nd ed.). London: SAGE.
Brand, J. E., & Todhunter, S. (2015). Digital Australia Report. Interactive Games & Entertainment
Association.

BMW Group Australia Recalls. (n.d.). Retrieved from https://www.recall.bmw.com.au/

BMW Competitive Analysis. (2019). Retrieved from https://lawaspect.com/bmw-competitive-analysis/

Court, D., Elzinga, D., & Mulder, S. (June, 2009). The consumer decision journey. Retrieved from
https://www.mckinsey.com/business-functions/marketing-and-sales/our-insights/the-consumer-
decision-journey

Campbell, M. (March, 2017). Audi wary of 'youth focused' styling: Older buyers find it appealing too |
CarAdvice. Retrieved from https://www.caradvice.com.au/531079/audi-wary-of-youth-focused-
car-designs-because-older-buyers-find-it-appealing-too/

David, J. (2019). PESTEL analysis of Australia. Retrieved from https://www.howandwhat.net/pestel-

analysis-australia/

eSports Statista. (2019). Number of players of selected eSports games worldwide as of August 2017 (in
million). Retrieved from https://www.statista.com/statistics/506923/esports-games-number-
players-global/
Frue, K. (2019). PEST Analysis of Australia: A Brief Look into Politics, Economy, Society and
Technology. Retrieved from https://pestleanalysis.com/pest-analysis-of-australia/

Garbarino, E., Johnson, M.S. (1999). The Different Roles of Satisfaction, Trust, and Commitment in
Customer Relationships, Journal of Marketing, Vol. 63, No. 2 (Apr.), pp. 70-87.
Goedkoop, M., van Halen, C., te Riele, H., and Rommens, P. (1999). Product Service Systems,
Ecological and Economic Basics, Pre consultants.
Grant, J., & Barker, J. (2009). preferential treatment. Encyclopaedic Dictionary of International Law.
Oxford University Press. Retrieved from
http://www.oxfordreference.com/view/10.1093/acref/9780195389777.001.0001/acref-
9780195389777-e-1818
Haseeb (2017). Retrieved from http://marketingdawn.com/pestle-analysis-of-bmw/

Jiguang Big Data.(2017). King of glory data research report.Retrieve from

https://zhuanlan.zhihu.com/p/43163510
Kotler, P. (2000). Marketing Management, Millenium Edition (Page 94).

Lannuzzi, A. (2014, July). Market segmentation criteria - Five essential criteria. Retrieved from
https://www.linkedin.com/pulse/20140730082827-41390803-market-segmentation-criteria-five-
essential-criteria

17
Long, D. (June, 2018). BMW embraces its daring side with edgy strategy to target young drivers in
Australia. Retrieved from https://www.thedrum.com/news/2018/06/04/bmw-embraces-its-daring-
side-with-edgy-strategy-target- young-drivers-australia

Lardinois, F., & Lardinois, F. (2018, July 15). Why BMW needs to own its customer experience from
start to finish – TechCrunch. Retrieved from https://techcrunch.com/2018/07/15/why-bmw-needs-
to-own-its-customer-experience-from-start-to-finish/
Maxham, J. G., III, & Netemeyer, R. G. (2002). Modeling customer perceptions of complaint handling
over time: The effects of perceived justice on satisfaction and intent. Journal of Retailing,
78, 239–252.
Natalie Wolfe, (2019). NSW Health to tackle illicit drugs this Australia Day long weekend. Retrieved
from the news website: https://www.news.com.au/lifestyle/health/nsw-health-to-tackle-illicit-
drugs-this-australia-day-long-weekend/news-story/fe2934eca45075f9708a2ee1b7ecb62c
Ranaweera, C., & Prabhu, J. (2003). The influence of satisfaction, trust and switching barriers on
customer retention in a continuous purchasing setting. International Journal of Service Industry
Management, 14(4), 374–395.
Sohail, U. (2017). These Are The Differences Between BMW And Mercedes Benz. Retrieved from
https://wonderfulengineering.com/is-bmw-really-better-than-mercedes-benz/

Saxena, D. (January, 2019). Segmentation and Targeting Success story at BMW. Retrieved from
https://www.superheuristics.com/segmentation-targeting-bmw/

Signing into eresources, The University of Sydney Library. (2019). Retrieved from
http://www.portal.euromonitor.com.ezproxy1.library.usyd.edu.au/portal/Analysis/Tab

Solutions, L. (2019). Member Benefits Australia - Car Sourcing. Retrieved from

http://www.mbacarassist.com.au/latestoffers

Streets Ahead: Case Study of BMW's CRM successes. (2019, February 25). Retrieved from
https://www.expertmarket.co.uk/crm-systems/bmw-crm-case-study

18