MAY 2007

Vol. 41

Customer Relationship Management

Toyota Deutschland GmbH (TDG):

A Best Practice Case Study of Toyota Motor Europes (TME) CRM Strategy
For Internal use only

BESTL PRACTICE B U L E T I N
Sharing Best Practices Across Global Toyota
MAY 2007 Vol. 41

Brought to you by the Global Knowledge Center, the Best Practice Bulletin (BPB) features examples of innovative and successful practices from distributors and retailers around the world. our mission at BPB is to reflect and promote the toyota Way in sales and Marketing (tWsM), and inspire global knowledge sharing among members of the toyota family.

Customer Relationship Management

C o n t e n t s
loyalty Management in Mature Markets

TARGET.............................................. 1 PROCESS .......................................... 4

Questioning and teamwork Create solutions

lifecycle Management outcomes Toyota Deutschland GmbH

RESULTS.......................................... 10

established .......................................................................................................1970 start of operations .........................................................................................1970 toyota sales outlets .........................................................632 (as of april 2007) lexus sales outlets .............................................................40 (as of april 2007) Website ............................................................................................www.toyota.de

Indicates more information at www.toyotagkc.com

TARGET
Loyalty Management in Mature Markets
according to a time-honored German saying, order is half of life. Christian schmitz, Manager, Customer lifecycle Management, for toyota Motor europe (tMe), was faced with a challenge that required a healthy application of the toyota Way, which stresses the removal of waste, continuous improvement and a focus on processes with repeatable results. In the area of sales growth, european distributors were constantly searching for ways to improve their competitiveness. they operated in markets in which both conquest and loyalty efforts were important. We saw that we have many mature markets where we must focus on loyalty activities, notes schmitz. a key motto for schmitz: sell more cars for lower costs. More tightly focused marketing campaigns could be produced inexpensively, allowing a greater number of micro-campaigns on a national basis. Besides cost reductions, another advantage of loyalty management would be national coordination of campaign efforts. retailers lacked budgets and the strategic marketing resources available to distributors to create highquality campaign messages that were on-message with national efforts. loyalty management by national Marketing and sales Companies (nMsCs) could elevate the toyota brand image

Why Is Managing Repurchasing Important?

Why focus on owner loyalty activity as well as expanding efforts to attract new toyota customers? one reason is that loyalty management would channel marketing energies into the task of building sales growth among people who already own toyota products. Domestic european brands offered solid competition, and attracting new owners to toyota can be costly. targeting customers who were already enjoying toyotas class-leading quality and reliability

throughout europe. a final benefit of orderly loyalty management addresses a core value of the toyota Way in sales and Marketing (tWsM): customer satisfaction.
Toyota Germany Sales
(incuding Lexus)

could generate new business with fewer expenses.

Toyota Europe Sales

Total Europe Market 20,000,000

19,265,525

(incuding Lexus)

Total Germany Market 3,600,000

3,467,961

1,600,000

180,000

19,000,000
18,532,836

18,708,883

1,400,000

3,400,000
3,236,938 3,266,826

3,342,122 148,003 4.3% 134,771 4.0%

160,000

18,000,000
17,061,267
951,307 5.1% 999,512 5.3% 1,125,173 5.8%

1,200,000

3,200,000
127,036 3.9% 110,214 3.4%

140,000

17,000,000

1,000,000

3,000,000

120,000

857,344 5.0%

Units

2003

2004

2005

2006

Units

2003

2004

2005

2006

Figure 1

Figure 2

Toyota Motor Europe, Share of Market

toyota is holding a consistently increasing share of the european market.

Toyota Deutschland GmbH, Share of Market

toyota is experiencing steady growth in both unit-sales and market share in Germany, indicated by the results from 2003 through 2006.
1

TARGET
Irrelevant or confusing marketing messages can create a negative impression that affects the customers decision to repurchase. eliminating these potential problems exhibits greater respect for owners. in schmitz team identified one market which considerable progress For almost ten years, retailers had been required, as a part of their retail contract, to enroll new owners into a paperbased Customer Contact Program (CCP). ninety percent of all owners are logged in, and the existence of this data was producing some intriguing understandings about key triggers of repurchase behavior.

had been made with a consistent approach to Customer relationship

Management (CrM). toyota Deutschland GmbH (tDG), headquartered in Cologne, operates in a mature market in which solid competition existed from German makes. additionally, Germany had toyota operations in place since 1970, and strong growth in the 1980s and 1990s resulted in more than 1.3 million toyota units in operation. Germany represents one of europes largest toyota markets, and customer satisfaction among German toyota owners tops all competitors. Most important, tDG possesses an active loyalty management program.

Quest for Order

a study of european distributors revealed kaizen opportunities in the vital activity of retaining toyota owners. nearly every nMsC was doing something, but no two nMsCs were doing the same thing, schmitz reports. one distributor time had and invested funds into

considerable

sophisticated information technology. In other cases, no repurchase activity had taken place at all.

65 60 55 50 45 40 35 30 25 2003 2004 2005 2006

47 41 40 38 59 58

TOYOTA BMW FORD RENAULT VOLKSWAGEN PEUGEOT

Nearly every NMSC

was doing something, but no two NMSCs were doing the same thing.
Christian Schmitz

Figure 3

Customer Satisfaction, Toyota Deutschland GmbH (TDG)

2

In the German market, owner satisfaction with toyota retail visits tops all other brands.

BEST PRACTICE BULLETIN Vol. 41

The Challenges of CRM

What exactly is CrM? a summary of its components and implementation sets a perspective for the challenge faced by tMe. on the technology side, software giants such as Microsoft, oracle and aCt compete for a share of dealer and distributors funds with both generic and customtailored solutions. Web sites promise instant success utilizing high-tech tools. From the standpoint of marketing divisions, a priority is to utilize the toyota Way to guide nMsCs through the vast array of possibilities for CrM. By way of overview, there are a number of CrM functions: marketing, sales, after-sales and customer relations. Marketing CrM activity helps companies understand potential sources of sales and develop targeted repurchasing efforts, such as mailing campaigns. sales CrM allows retailers to pursue leads, streamline the sales process and follow up with the most likely prospects for purchase or lease. after-sales CrM systems include reminders for scheduled service, offers of aftersales products and services and proactive approaches to lifecycle management. Finally, customer-relations CrM utilizes systems to help manage the customer complaint process. three key learnings characterize tMes implementation of CrM throughout europe. First, the process should
REPURCHASE MANAGEMENT
Loyalty Comms

drive the selection of It tools, not the other way around. Developing CrM should begin with an assessment of lifecycle management needs and processes within the distributor, including opportunities for kaizen, before proceeding to the selection of It. a second imperative is to develop CrM organizational capability, including skills and communication. this should occur cross-functionally as well as vertically, creating stakeholders in the success of CrM at all levels: regional Headquarters, nMsC, retailer management and staff. Finally, participants must agree on CrM Key Performance Indicators (KPIs) and methods of measurement that allow management to gauge its success and set targets for kaizen. With 28 different nMsCs, a variety of legal requirements, a wide mix of sales approaches and diverse languages and cultures, implementing CrM throughout europe presents a challenge to the tMe group.
AFTER SALES
Service Reminders Welcome

CUSTOMER RELATIONS

Sales

Awareness

Consideration

Lead Management

ACQUISITION

CONQUEST (Lead Generation)

3

PROCESS
Questioning and Teamwork Create Solutions
Toyota Deutschland
schmitz and his staff at tMe were impressed by progress made by tDG in the area of repurchasing management. as mentioned, widespread use of the CCP was leading to solid understanding of customer retention. tDG Manager of Marketing operations Frank Grndler had begun to assess the CCP and determine opportunities for kaizen. He and his staff decided on the target of improving toyotas already high loyalty figure. additionally, tDG seeks to reduce the length of the trade cycle by 10 percent, generating sales increases due to the reduction. We took our time and performed a deeper analysis of our needs, Grndler says. We took genchi genbutsu visits with retailers as well as the It agency that ran the program. the conclusion was that CCP is a good start, but that a more flexible lifecycle management program was necessary. the current-generation CCP relies on fixed customer contacts. For example, a service contract offer letter is mailed after 12 months, and a repurchase offer reaches owners after 40 months. However, there are many variables in the decision to repurchase. adapting the mailings to the needs of individual owners better targets owners who are ready to purchase or who required vehicle service. additionally, tFs is not fully

integrated into the planning of loyalty campaigns. Customers who were financing

with tFs have a much higher rate of conversion and are far more loyal, Grndler continues. ensuring consistency of messages requires more ongoing communication with the financial arm of toyota. a third challenge is to optimize the cost effectiveness of communications by eradicating duplicate or conflicting messages. Consistent, high-quality

campaigns could add value to the consumers experience of the toyota brand.

Obtain necessary information quickly and easily Own the vehicle with condence

We took our time and

performed a deeper analysis of our needs
Frank Grndler

SEARCH OWN
Drop into the sales outlets with ease and pleasure

VISIT OBTAIN
Obtain the vehicle with ease of mind

PURCHASE
Understand the value of the purchased vehicle

Figure 4

Customer-Driven Sales Process

Managing loyalty the toyota Way keeps the customers expectations at the center of all customer retention activities throughout the sales and ownership process.

BEST PRACTICE BULLETIN Vol. 41

another area of improvement exists in the database structure. names are entered using a paper-based format, which could be cumbersome for retailers. an Internet-based system would eliminate this obstacle. Finally, the team is evaluating the cost and relevance of repurchasing campaigns. the group studied key results of the spring 2004 avensis national marketing campaign, an exercise that yielded KPIs for evaluating future successes: number of customers targeted amount of mailings number of vehicles sold Conversion rate (percentage of vehicles sold per mailing contact) Campaign costs and design time

Finding the Right Path

the quest to improve customer loyalty management systems led to valuable lessons about applying the concepts of CrM in the real world. Initially, the distributor attempted to put its entire emphasis on developing a technology solution. our first idea was to integrate all aspects of repurchasing into a single database, recalls Grndler. this would include lead management,

the team determined that this is an overly complex answer, especially when managing hundreds of thousands of new owners in the system. they discovered that a better approach is to examine business processes and customer information, then tailor a system including the Information technology to those needs. It is also important to identify key partners and build relationships that allow strategic development of CrM activity, such as service and sales marketing campaigns.

warranty information, financial services information, and so on.

Figure 5

Elevating the Toyota Brand

retailers benefit from high-quality loyalty marketing materials, such as this avensis national mailing. as a part of the CCP, they also receive toyota Magazine, which can be customized with the retailers name.

PROCESS

the team at tDG included, from left, Markus ames, Business analyst & Coordinator; Markus Burgmer, Product Manager; ulrike Humartus, Customer relationship Management; and Frank Grndler, Manager, Marketing operations.

Birth of a Solution
Constant questioning about the loyalty process has already begun to produce positive results for the German team. the availability of customer information through CCP allows them to check their findings with actual customer data. For example, the group is refining its understanding of what causes an existing toyota owner to purchase another toyota product. analysis of a toyota Corolla national campaign created important realizations. one of the major triggers we discovered was vehicle birthdays,

the team expanded its understanding into a complete model of repurchase behavior, the Propensity Model. the model is an important tool that can aid campaign design, owner followup, service messages and other forms of CrM. How does the Propensity Model benefit marketers who use it? Just as an archaeologist uses a sieve to pick out precious artifacts from sand, the model separates owners who are most likely to repurchase from those who are less likely to acquire another toyota product. Key factors such as vehicle age, financing options, previous repurchase behavior and customer satisfaction

By utilizing the model to target customers who are the hottest leads, the quantity of marketing materials needed to reach them can be reduced substantially. Muda is eliminated, a step that can increase the quality of each message or create a greater quantity of campaigns throughout the year. analyzing the results of a campaign revealed that the highest-ranked

customers also purchased a far greater number of vehicles than those at the bottom of the ranking. the top 30 percent of the customers bought more than 50 percent of the vehicles, notes ulrike Humartus of the tDG CrM team.

reports Grndler. the conversion rate to toyota products was much higher if we contacted a customer at the optimum purchase point in our market.
6

information are incorporated into a score that ranks the customer.

BEST PRACTICE BULLETIN Vol. 41

Power of the Team

effective teamwork, combined with a healthy respect for individual effort, are important pillars of the toyota Way of sales and Marketing. the German team discovered the importance of involving different business units in the development of loyalty management. one of the biggest challenges was to work cross-functionally with other departments, observes Grndler. We learned that we had to bring our efforts much closer together and synchronize our activities. For example, in past customer loyalty efforts, tDG might have spent considerable resources developing a campaign, then discovered that tFs

was readying its own, separate offering. tDG now holds coordinating meetings with tFs regularly, a process that builds allies both cross-functionally and at various levels of each organization.

the same period in the five largest european markets, this represented a substantial figure. a second objective for kaizen is to maintain an ongoing effort to improve customer satisfaction. this is critical because of the connection between loyalty and satisfaction. loyalty is 1.5 times higher when customers are completely satisfied, points out schmitz. statistical research from the 2006 new Car Buyers survey demonstrates that repurchasing soars from 40% to 60% when owners are completely satisfied with their purchase. Finally, tMe set out to enhance the perception of the toyota brand. By building a better relationship between the

Pan-European Kaizen
encouraged by its findings in Germany, tMe continues to pursue three overall goals for europe. First, the aim is to close a gap in sales by increasing the amount of toyota products sold to repeat customers. In 2006 the tMe loyalty Marketing team identified a gap in sales of nearly 47,000 units by 2010 that loyalty management programs could address. out of a total of 730,395 new-vehicle sales forecast for

Test Drive Service Information Finance Age of Car /Mileage Repurchase Behavior Current Model Car Congurator CCS Data

Constant questioning about the loyalty process began to produce positive results.

Figure 6

Propensity Model
Based on extensive analysis of campaign results, tDG developed a Propensity Model that identified the customers who were most likely to repurchase toyota products. this innovative approach allows distributors to target messages closely at the intended audience. Campaigns required smaller mailing quantities, increasing efficiency and adding value.

PROCESS
customers and the toyota organization retailers, toyota Financial services (tFs) and nMsCs the company could improve sales and further solidify its brand image in europe. Kaizen activity also included genchi genbutsu visits to other distributors with successful CrM programs. Based on advice from GKC Champion Jon Williams, schmitz included u.s.-based southeast toyota Distributors (set) in his research. set utilizes an advanced customer-centric database that logs a substantial amount of information about each new owner and his or her household. It is producing positive sales results and helping to reduce duplicate mailings. In october 2006, members of the tMe study team flew to Florida to see firsthand how set was putting CrM to work. Four months later, nMsC representatives from Germany, uK, France and norway attended a GKC CrM Forum, as did schmitz, who was also a presenter. the event included a presentation from set that added to both teams knowledge of loyalty management. success in Germany raised a question about the pan-european market. Can the experience of tDG be repeated in other countries where cultures, business practices and regulatory environments differ significantly?

Effective teamwork, combined with a healthy respect for individual effort, are important pillars of TWSM.

Christian schmitz (2nd from left) , Manager Customer lifecycle Management at toyota Motor europe (tMe) and his team (from left to right) sonia Hernando, leticia Hevia Bongiovanni, Jochem Beelen. Careful assessment of CrM activities in europe led to a plan to add consistency to loyalty management efforts.

BEST PRACTICE BULLETIN Vol. 41

Genchi Genbutsu
TMEs CRM Visit to Southeast Toyota
as a part of its CrM research, tMe visited southeast toyota Distributors (set), located in Deerfield Beach, Florida in the us. set complements its conquest-sales strategy with active efforts to target and retain existing owners of toyota products. set utilizes an advanced customer database as the basis of its CrM programs. While many systems track customers by activity, such as the VIn after a new-vehicle purchase or service repair orders, set has carefully developed, over the past decade, a customercentric system that allows individual owners to be tracked by a wider variety of variables. For example, by managing the customer information to remove hidden duplicate customers, set provides a more accurate base of prospective new business. this approach, in turn, allows set to classify customers by household and identify life-stage opportunities, such as birthdays, that drive many automobile sales. What are the benefits to individual retailers? a recent conquest direct-mail campaign for the subcompact toyota yaris was able to precisely target youthful, Gen y prospects. Hundreds of sales were tracked to the mailing, validating the approach. a second pillar of the set CrM effort is the distributors Connections service Marketing Program. Instead of basing service promotions simply on Model year of the customers vehicle, set is able to track customer activity. each service date is logged into the customers record, as is the mileage on the vehicle serviced. this enables service messages to be targeted more closely to the actual date of scheduled maintenance an approach set labels predictive logic. this approach also enables retailers to tier service pricing to individual customers. For example, the database can distinguish when a service customer has defected from the retail outlet and offer an attractive price to retain their service business. By reducing waste muda, in tWsM vernacular and applying kaizen principles to data collection, set has developed a smarter approach to marketing toyota sales and service.
tMe traveled to the u.s. for genchi genbutsu with southeast toyota Distributors, which utilizes a customer-centric CrM approach that helps retailers identify when customers are ready for a vehicle purchase. the approach increases the likelihood of a successful sale and helps reduce duplicate mailings.

RESULTS
Lifecycle Management Outcomes
Calculating the Benefits
schmitz and Grndler are interested in measuring the outcomes of the application of the Propensity Model. these results can help convince other european distributors to incorporate loyalty management into their business planning. one test is to compare campaigns that were developed prior to the Propensity Model with those that followed its use. Comparing the 2004 avensis and the 2005 mailing which used it, we saw a higher rate of conversion with much lower costs, reports Grndler. not only did the campaign create more sales, it reduced the amount of effort required to develop the campaign. In spring 2004 it was necessary to target the mailing at 61,500 potential customers. this figure was reduced to nearly one-third that size, or 20,800, in the 2005 campaign. additional savings occurred when comparing costs of the old campaign to the 2005 mailing. total costs in 2004 reached 220,000 euros, for a cost-per-sale of 100 euros. these figures were reduced dramatically in 2005 to 55,000 euros with a per-sale cost of 45 euros, less than half the previous figure. the team is also encouraged by a 58 percent improvement in the conversion rate, which increased from 3.63 percent to 5.72 percent. Clearer understanding of the target also reduced campaign time by 50 percent, from eight weeks to only four weeks. this would enable tDG to design smaller, highly targeted mailings throughout the year. the idea is to do a mailing three or four times per year for the same money and get a much higher conversion rate and vehicle volume sales, says Grndler. this also helps tDG build on the success of continually improved programs.

campaign without the Propensity Model

The idea is to do a mailing three or four times per

year for the same money and get a much higher conversion rate and vehicle volume sales.
Frank Grndler

2004

2005

Difference

Conversion Rate Cost Per Sale

Campaign Design Time Campaign Cost

3.63% 100
8 weeks 220,000

5.72% 46
4 weeks 55,000

+ 58% - 54%
- 50% - 75%

Figure 7

Avensis Campaign Analysis 2004 vs. 2005

10

toyota Deutschland headquarters in Cologne, Germany.

applying the Propensity Model in a 2005 avensis campaign produced numerous benefits: lower costs, shorter campaign development time and increased rates of conversion.

BEST PRACTICE BULLETIN Vol. 41

Satisfied Customers
Positive results are anticipated in the area of customer satisfaction. tDGs research showed that duplicate mailings can have a negative impact on customers. Besides exhibiting a 50 percent increase in loyalty, completely satisfied customers have even more value as a source of referrals among social networks, which include friends, coworkers and family members. Data show that completely satisfied customers are 4.75 times more likely to recommend toyota products to others. For retailers, this aids lead management programs and leads to faster, easier sales, among highly valued referral customers.
retailer Coaching on CrM processes and tools at tDG.

transformation from the previous push approach to a pull culture, in which the national distributors worked closely with tFs to recommend marketing solutions. By moving the decisions to the local level, customers could be better served with more highly targeted sales and service messages.

each of these benefits lower costs, more focused campaigns and pull business culture contributes to a better impression of the toyota brand among toyota customers. schmitz goal of more sales, more often creates higher-quality campaign messages that are beyond the budgets of individual retailers.

Changing Business Culture

another outcome is beginning to take place throughout the toyotas european operations. In the past, strategic directions and creative materials were developed at the top levels of the company and handed to the national distributors. tFs, for example, would work jointly with the distributors to develop attractive financing offers, and it was up to the individual nMsCs to design campaigns around the programs. More localized marketing helped

Not only did the Avensis campaign create more sales, it reduced the amount of effort required to develop the campaign.

reverse this direction and resulted in a

11

RESULTS
Sharing Positive Results
tDG is a case study in the value of loyalty management utilizing the Propensity Model. Can the results be applied elsewhere in europe? on the basis of the German project we developed, in conjunction with our consultant CaCI sophron, a Capability Audit, says schmitz. this will help us find out which areas are most important to develop in other countries. the approach allows staff to visit a country for five to 10 days and examine the activities in that individual market. the audit is comprehensive and includes a measurement of marketing activities, quality and accessibility of data as well as a wide range of other customer management issues. the aim is to develop a strategic understanding of good and best practices as they pertain to customer management. the audit was first applied to the Czech republic, where toyota Motor Czechoslovakia (tMCZ) is working to assess all aspects of its CrM processes and activities. these include lead and prospect management as well as Due to the very positive experience with this approach, tMe has recently begun an assessment of lead Generation in a total of eight nMsCs. the goal is to assess the processes, tools, skills and techniques that are already in place, followed by a recommendation to each nMsC for an ideal process. schmitz is looking forward to comparing 2007 auris launch loyalty management performance across europe based on a consistent set of Key Performance Indicators (KPIs). early indications are that the toyota (GB) PlC auris launch improved target campaign in the united Kingdom

repurchasing management, and tMCZ has undertaken a 12-month pilot program and implemented a three-year roadmap. the Capability audit can be conducted in any market around the world to provide a look at the countrys status quo and offer preliminary recommendations for implementing CrM. In Belgium,

identification has had extremely positive results in a recent raV4 customer mailing. Cost-per-sale was reduced by 23 percent, and retailers experienced

has yielded excellent improvements in conversion rates of due the to the

implementation propensity model.

described

substantially higher sales volume (+35 percent) and rates of conversion (+36 percent). Further implementation of the Propensity Model will be rapidly rolled out throughout europe.

We have developed a roadmap to loyalty and made sure they all have the same understanding, points out schmitz. We are looking forward to a great success.

Figure 8
12

toyota Motor Czechoslovakia (tMCZ) retailer CrM Coaching.

2007 Auris Campaign, United Kingdom

BEST PRACTICE BULLETIN Vol. 41

Key Learnings
Toyota Deutschland GmbH Customer Lifecycle Management
Toyota Deutschlands progress did not occur without challenges, and the solutions reflected key learnings about Customer Lifecycle Management that are transferable to other Toyota sales organizations. Start with clear, well-defined CRM processes. Information Technology is not a panacea. Take steps to promote organizational involvement both horizontally across business functions and vertically among Regional management, distributors and retailers. Establish Key Performance Indicators and stakeholder communications, and test before rollout. After-sales programs are an integral component of CRM. Using a Propensity Model helps correctly target the proper base of owners. Engaging retailers early in the program is critical to avoid resistance.
recent european ClM workshop in Copenhagen attended by 38 delegates from 16 distributors, tFs and tMe.

TWSM Terminology
Genchi Genbutsu
Go see the problem. this is the belief that practical experience is valued over theoretical knowledge. you must see the problem to know the problem.

Kaizen
a system of continuous improvement in which instances of muda (waste) are eliminated one-by-one at minimal cost. this is performed by all employees rather than by specialists.

Muda
non-value added. Muda is translated as waste. there are seven types of muda: overproduction, waiting, conveyance, processing, inventory, motion and correction.
13

Access and download PDF files of the Best Practice Bulletins below and supporting materials from the new GKC Knowledge Bank website: www.toyotagkc.com

1. logon to www.toyotagkc.com

2. Click Knowledge assets

3. Click Best Practices

AFTER SERVICE
Vol.28 raising the Benchmark (lexus) USA Vol.36 Improving Guest Delight SAUDI ARABIA

INFORMATION TECHNOLOGY
Vol.10 Customer Dialogue Centre NEW ZEALAND Vol.15 access toyota CANADA Vol.17 InCrMenter SPAIN Vol.33 e-CrB THAILAND

SALES STRATEGY
Vol.14 Customer First GUAM Vol.22 no. 1 By Far KUWAIT Vol.34 toyota Certified used Vehicles USA

BRANDING
Vol.23 Purdy People COSTA RICA Vol.24 Driving with Confidence PUERTO RICO

SUPPLY AND DEMAND LAUNCHING

Vol.1 art of revitalization SOUTH AFRICA Vol.3 Process re-engineering USA Vol.5 Customer-First (lexus) TAIWAN Vol.7 avensis launch EUROPE Vol.35 the new yaris launch in France FRANCE Vol.12 Cutting Costs in Customer supply Chain AUSTRALIA

DEALER NETWORK
Vol.4 Crisis Management at Work SAUDI ARABIA Vol.11 Building a successful Dealer organization USA Vol.19 Partnership for success POLAND Vol.37 Dealer network Development strategy MEXICO Vol.39 titaani: the toyota Certified Program FINLAND

TRAINING
Vol.9 toyota signature USA Vol.25 using tWsM at the Frontline PAKISTAN Vol.29 toyota retail system EUROPE Vol.31 Best retailer in town (Brit) GERMANY Vol.32 a Brand new training experience (lexus) JAPAN Vol.38 the toyota Way in retail sales AUSTRALIA Vol.40 sales Process Improvement BRAZIL & ARGENTINA Vol.18 special edition Vol.30 special edition: the Best Practice Bulletin reviewed

MARKETING
Vol.8 tWsM in action EGYPT Vol.20 oh . . . What a Feeling! AUSTRALIA Vol.21 Beyond ownership (lexus) SINGAPORE Vol.26 redefining the Customer experience (scion) USA Vol.41 Customer relationship Management GERMANY

FACILITIES
Vol.16 From Garages to real shops EUROPE

HUMAN RESOURCE MANAGEMENT

Vol.2 talking about Management Concepts JAPAN Vol.6 netz Dealer trial JAPAN Vol.13 Building on People SINGAPORE Vol.27 Mr. Hilux BRAZIL

Vol. 42
next, BPB looks at the obeya Concept - usa

To share a best practice, please contact the editorial team at gkc@toyota.com or at the address below.
ADDRESS
Global Knowledge Center toyota Motor sales Inc. u.s.a. 19001 s. Western ave. torrance, California 90501, u.s.a. Tel. +1.310.965.7260 Fax. +1.310.965.7190 E-Mail. gkc@toyota.com

EDITORIAL STAFF
EDITOR/WRITER Jim Piechocki MANAGING EDITOR Christopher Hayes EDITOR-IN-CHIEF Warwick Harvie VICE PRESIDENT, GKC John Kramer

EDITORIAL EXECUTIVE
naoya taniguchi, General Manager, GMD nobuhiko Joe, General Manager, GPD Kenichi takagi, national Manager, GKC rick taniguchi, national Manager, GKC ray lindland, national Manager, GKC ItP strategic, Copywriting / Design

Published by the Global Knowledge Center. Copyright 2007 by toyota Motor sales Inc. u.s.a. Contents may be reprinted by authorized distributors for internal use only. all rights reserved. Printed in usa

PrInteD WItH reCyCleD stoCK

CUSTOMER RELATIONSHIP MANAGEMENT A Best Practice Case Study of CRM Strategy

1. Clarify the Problem
Ultimate Goal
o offer customers a superior quality purchase and ownership experience through excellence in T Customer Relationship Management (CRM).

BEST PRACTICE BULLETIN Vol. 41

4. Process
ith TME and its Retailers, TDG W conducted a capability audit of its own CRM activities dentified loyalty management as I its primary focus and developed a strategy roadmap efined its CRM process and D established cross-functional teams for implementation sed the Propensity Model to U improve effectiveness of loyalty marketing campaigns and reduce costs nhanced Customer Contact E Program (CCP) to improved customer communications
FIGURE 1: CRM Lifecycle Management Process
REPURCHASE MANAGEMENT
Loyalty Comms

AFTER SALES
Service Reminders Welcome

Ideal Situation
ptimized Customer Relationship Management (CRM) management processes and practices across O Toyota Motor Europe (TME) and at the National Marketing and Sales Companies (NMSC) level.

CUSTOMER RELATIONS

Sales

Awareness

Consideration

Lead Management

ACQUISITION

GAP: Opportunity to enhance CRM management activities and initiatives throughout TME and at Toyota Deutschland GmbH (TDG).

CONQUEST (Lead Generation)

Test Drive Service Information Finance Age of Car /Mileage Repurchase Behavior Current Model Car Congurator CCS Data

Current Situation
ide variety of CRM management activity levels and processes across TME. Large variances in direct W marketing campaign results and cost effectiveness.

2. Break Down the Problem

TME identified six key areas: CRM processes and definition Organizational integration CRM activity levels Loyalty marketing campaigns ata collection and D measurement IT solutions and tools TDG identified three key areas: epurchase frequency and R trade cycle management ational marketing campaign N costs and effectiveness ustomer communications C strategy and timing Example: New Product Launch Loyalty Campaigns TME, 2006 NMSC TDG A B C D E F Channel Type DM E-mail Web Phone Content Invitation Special Offer TFS Partners

FIGURE 2: TDG Propensity Model

5. Results
Customer Improved ownership experience Better timed and relevant communications Retailer Access to high quality CCP marketing materials Increased sales and profits TDG Increased sales and reduced trade cycle time Increased owner loyalty and repurchase More cost effective marketing campaigns Greater organizational collaboration TME Increased incremental sales to existing owners Superior quality customer experience TMC Improved purchase and ownership experience Enhanced Toyota brand experience
2004 2005 Difference

Conversion Rate Cost Per Sale

Campaign Design Time Campaign Cost

3.63% 100
8 weeks 220,000

5.72% 46
4 weeks 55,000

+ 58% - 54%
- 50% - 75%

TABLE 1: TDG Avensis Campaign Analysis2004 vs. 2005

3. Target Setting
TME Achieve 47,000 incremental sales to existing owners by 2010. TDG ncrease customer loyalty and reduce trade cycle time by 10%. I

6. Next Steps
TME Rapid roll-out of the Propensity Model Greater utilization of the Capability Audit Development of lead management activities TDG Launch of next generation CCP reater cross functional collaboration with TFS G and After-Sales