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FAILED EFFORT NEARLY STALLED PORSCHE DEALERS LEFT OUT OF ILL-FATED PROGRAM; PROSPECTS PROVE HARD TO TARGET AMID SOARING PRICES

By Published on .

The case of Porsche Cars North America could have been labeled as perfect relationship marketing.

With a repeat buyer ratio of 73%, and 80% on its 911 line alone, Porsche wooed customers through personal, high-prestige programs. Tactics included bringing on-the-fence prospects to racetracks to zip around in gleaming new 911s and sending a direct mail package featuring a front-view Porsche poster with the addressee's name on the license plate.

But Porsche's big stab at relationship marketing, the Porsche 300,000 campaign (named for the size of the database), stalled before it hit full speed. The program was killed in 1991, one year after its formation.

Although the program through Rapp Collins Worldwide, Dallas, failed for various reasons, most of these causes have one thing in common: they failed to strengthen the relationships between the carmaker, the dealer and the consumer.

"The goal has to be to coordinate the marketing activities of dealer, sales arm and manufacturer so the relationship is seamless and makes sense to the customer," says Jeremy Anwyl, president of consulting firm Marketec Systems.

One glaring omission from the program was the lack of dealer involvement. For example, Porsche was considering giving a free 24-hour test drive of a 911 to prospects. However, Porsche forgot to ask the dealers until it was almost too late.

The dealers axed the proposal, due to obvious depreciation and insurance concerns.

"What we forgot was that the dealer is our customer. Our marketing efforts were all factory-to-customer, rather than factory-to-dealer and dealer-to-customer," says Richard Ford, Porsche VP of vehicle sales and marketing.

Then there was the problem of making the direct marketing stand out from clutter-a key component for any marketer trying to reinforce relationships with its customers.

"Our buyers are in such a high demographic category that they are on everybody's mailing list," Mr. Ford says. "The Porsche logo got them to open the mailer and read it, but we didn't see a high rate of sales results. It showed we had other problems."

Those problems included trying to retain a buyer who couldn't keep pace with dramatic price hikes spawned by a soaring deutschemark.

A 944 buyer could hardly be expected to jump up to a 911 the next time around when he couldn't even afford to purchase another 944. When the 944 debuted in April 1982, it stickered at $19,000. Four years later, the cost of the '87 models had roughly doubled. In contrast, the consumer price index rose 13.6% between 1982 and 1986, according to the Bureau of Labor Statistics.

Meanwhile, Nissan Motor Corp. USA's 300ZX, Mitsubishi Motor Sales of America's 3000GT and Mazda Motor of America's RX-7 were recognized as lower-cost alternatives to high-priced sports cars.

Consequently, Porsche's pricing strategy defied the mission of relationship marketing.

"Even if you have a good relationship with a customer, he wants to make sure he gets the best value and best deal, so it's a tough sell," says Charlie Burton, owner of Carlsen Motor Cars in Palo Alto, Calif. "People don't want to pay more for a four-cylinder 944 when the competition has sixes and eights and multi-valve jobs."

Plus, Porsche's buyer profile has three intrinsic weaknesses in bringing repeat business, says Mark Rhode, VP-marketing for Rapp Collins who supervised the Porsche 300,000 campaign:

There isn't a real correlation between a Porsche prospect and a typical demographic attribute like household income.

"Determining the propensity to buy a sports car, and a Porsche at that, is not easy to do. The real challenge is, once finding the right income cluster, finding out when someone gets a big bonus and is willing to acquire a Porsche," Mr. Ford acknowledges.

Compared to other luxury makes, the buying cycle for Porsches is more extended and unpredictable. For instance, a typical owner of a Legend from American Honda Motor Co.'s Acura division may be looking at a three-or-four-year buying cycle, but a Porsche owner might hang on to his car for 20 years, Mr. Rhode says. "There are fewer people you can rely on to make a purchase every X years."

The Porsche prospect will be suspicious of marketing efforts, so any identifiable program will have to be more clever or individualized to work-hence more expensive per unit. The payout will be harder to measure and take longer than one for a Lexus or Buick, Mr. Rhode says. This observation makes these programs harder to sell to the corporate financial executives.

With the debut of the 1995 911 (code-named 993), Porsche is dabbling in relationship marketing once again. It has mailed 25,000 videotapes to owners of the 911 and competitive nameplates in hopes of drawing them to a Porsche showroom.

But that's pretty much it for the 993's relationship marketing plans.

Company executives say they're more concerned with making consumers see Porsche as an acceptable purchase in the value-oriented '90s.

To debunk the haughty image of Porsche and its owners, the marketer approved a $20 million TV ad campaign, from Goodby, Berlin & Silverstein, San Francisco.

"We need to get in the front of mind to buyers, as well as those not even in the market but still thinking good thoughts about Porsche," Mr. Ford says.

"We're not leaving relationship marketing behind. But whereas we once saw it as a primary means of reaching our core buyers, it's now just an important ingredient."

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