Customer Relationship Management

– Case Study [Mercedes Benz]

Introduction
 Mercedes-Benz is one of the world’s most successful premium
brands. It’s technical perfection, innovative design features
and numerous car legends have made the Mercedes star one
of the world’s best-known trademarks today.
 Customer relationship management (CRM) is an approach to
manage a company's interaction with current and
potential customers. It uses data analysis about customers'
history with a company to improve business relationships with
customers, specifically focusing on customer retention and
ultimately driving sales growth.
Company Background
 By 2000 major changes in the competitive structure of the
European car market were under way. After long history of
reigning over a sellers’ market, Mercedes-Benz experiences
increase competition.
 Historically, Mercedes-Benz cars had been sold in the UK
through a franchised network of some 138 dealerships. Each of
these was autonomous, with the exception of three dealerships
owned by the distributor Daimler Chrsyler UK (DCUK)
 Mercedes-Benz UK (M-B UK) had relatively little control over the
relationships with these dealers and their customers. Dealers
managed their own relationships, including customer research,
data base management, acquisition and retention processes.
Statement of the Problem

 LOW QUALITY OF SERVICE: Although the technical

quality of the product was highly regarded, customers
complained that the service that they received was not of
the same high standard. The translated into declining
customer satisfaction and increased defection
 COMMUNICATION-DELIVERY INCONSISTENCY:
Customers reported that there was an inconsistency
between the communication that they received and the
service that was delivered.
 ISOLATED DATABASE: At this time, a uniform problem
across dealerships of most car marques in the UK was that
each dealership operated its own database.
 Alternative Solutions
1. Developing a new approach for the entire chain relationships
Advantages ▪ Data integration will reduce the likelihood of missing or
duplicating customer information enabling the
company to serve the customers more efficiently than
before.
▪ Setting up a CRM software will improve client
relationships.
▪ The control of M-B UK over the franchises will increase
despite of them being autonomous.
Disadvantages ▪ The change may not be welcomed by distributors and
other dealers.
▪ Single database may pose security threats and data
loss.
▪ The development of a new approach requires high
costs.
 Alternative Solutions
2. Establishing a new department in M-B UK that focuses in
customer relations
Advantages ▪ All customer services will be centralized.
▪ Customer services will be consistent and uniform.
▪ Communication delivery and customer relations
will improve.
Disadvantages ▪ The new department may find it difficult to handle
different and large data especially in the long run
▪ Additional skilled staff that specializes in
customer relations will be needed.
▪ Problems may be encountered due to varied
processes being practiced by the different
autonomous dealerships.
 Alternative Solutions
3. Training of current and strict hiring requirements in
prospective employees and staf
Advantages ▪ It is not costly compared to the other alternative
solutions.
▪ It is easy to implement.
▪ It will make the employees more reliable and
skillful.
Disadvantages ▪ The effectiveness and compliance of the
employees is not certain.
▪ Increase in employee turnover may be
anticipated.
▪ Difficulty in hiring new employees and staff may
occur due to strict hiring requirements.
 Alternative Solutions
4. Creating a Customer Service Handbook
Advantages ▪ It is not costly compared to the other
alternative solutions.
▪ It is easy to implement.
▪ Customer services will be consistent and
uniform.
Disadvantages ▪ It is not guaranteed that handbook will be used
or followed.
▪ Since the handbook is just a framework,
variations in specific procedures may pose
problems to the company.
 Alternative Solutions
5. Giving incentives to employees based on customer feedback
Advantages ▪ Employees and staff will be motivated to
their best in serving the customers.
▪ It will increase customer relations and
satisfaction.

Disadvantages ▪ The measure used in giving incentives may

not be reliable and appears to be subjective.
▪ It is susceptible to fraud.
Recommendation
 The group has chosen the alternative solution number
one – Developing a new approach for the entire chain
relationships. This recommended solution seeks to
improve customer satisfaction and customer services
by improving the root problem which is the poor
communication delivery and data handling systems.
Although the development of a new approach
requires high costs due to the involvement of
significant changes, this recommended solution is
actually a cost savings approach in a long run.
 Implementation
Activities Persons Involved Task Timeline
1. Adoption of a new Top management, Re-organize the market into Indefinite
distribution model Sales department 35 new, larger geographical
areas and invite existing
dealerships to new retailer
agreements

2. Research on CRM Project management Identify the key CRM 2 months

processes team (managers in processes and determine
marketing and how each process would be
operations) implemented throughout the
new retail structure.

3. Benchmark Research team Benchmark Mercedes Benz 3 months

against other leading
marques as well as other
best-in-class organizations.
 Implementation
Activities Persons Involved Task Timeline
4. Setting up a single Top management, IT Implementation of a single 1 month
database department database across all
‘Marketing Areas’ (MAs) and
M-B UK

5. Employee Training Human Resource, Employee training as how to 2 weeks

Customer support, accurately record important
Sales personnel customer information
improving the quality of data

6. Communication of Review Committee Communicating results to every 3 months

results other MAs for them to adopt
CRM