The launch of the ID.3 has triggered the go-ahead for the agency model for private and small commercial customers, a model which has been successful in the fleet business for many years.
Redefining our Distribution Model (4)
The launch of the ID.3 has triggered the go-ahead for the agency model for private and small commercial customers, a model which has been successful in the fleet business for many years. All of the dealerships in Germany and Austria have signed the agency contracts, without exception. Currently, the agency model only applies to these markets. If it’s successful, other markets will follow soon after. The aim of the agency model is to promote the customer experience to a completely new level and make it easier to purchase vehicles. This requires a foundation of lean processes and tailor-made systems.
The benefits for customers:
- Omnichannel choice – the customer can switch between online and offline channels and order directly from Volkswagen, whilst the dealership of their choice remains their local contact.
- You prefer information, an initial online configuration, a consultation and a test-drive at our Volkswagen partner before finalising your purchase from the comfort of your own home? No problem! Online bookings and orders are the flavour of the day – but face-to-face consultations are still available for customers who prefer it that way.
- Direct contractual relationship with the OEM – all the benefits of the new approach (i.e. fast-track models for quicker delivery, visibility and choice of stock available in their country as well as models currently in production, better integration of the processes for selecting the vehicle online and the subsequent purchase thereof, combined experience means that customers benefit from a simpler and more focused line-up and configuration)
- No price negotiation – everyone gets the same price, lower distribution cost overall makes cars more affordable for everyone thanks to attractive pricing and financing/leasing options
The key to this omnichannel experience is uniform pricing both online and offline at all dealerships. Hence, there is no longer a need for time-consuming research into prices – the price is the same everywhere.
This means there is a lower cost for carrying inventory and demo cars as well as a greater focus on customer service as the customer selects their preferred partner – the dealer who then gets the commission. The dealership remains the main point of contact for the customer in its role as agent, as its tasks include arranging ID. Family sales. To be more precise, it is responsible for acquisition, consultations, test drives, finalising contracts, and deliveries, in collaboration with Volkswagen AG.
Provided customers give their consent, personalised data regarding their person and vehicle enables consistent communication with them across all channels.
To this end, the new IT system Thunder was developed and launched as the new sales system to coincide with the introduction of the ID.3. The objective is to make buying a car a seamless and straightforward process. In addition, a new ordering system called NADIN has been introduced. This will facilitate modern and secure order processing, which, most importantly of all, is intuitive for the user. Thunder and NADIN represent the sales and order processing of the future.
(The agency model gives customers the freedom to decide how they would like to buy the ID.3)
Strategy and customer value creation
The Volkswagen brand is in direct contact with customers, and creating long-term customer value will increasingly become their primary focus. Distribution efficiency will mainly be achieved through digitalization and cross-brand synergies in processes and systems, while branding will continue to be differentiated.
New formats such as the scaled full-function dealer, a City Store as well as a Service Factory provide new opportunities for investors in a market area to offer customers a service which is tailored to their needs while also improving cost efficiencies. The Service Factory concept, for example, has already been designed to be compatible with several brands. The idea is to consolidate specialised services on a large scale, ideally outside expensive city centres. The site strategy therefore depends on flexibility, whilst at the same time we are also supporting multi-brand investors.
Success as a team
Volkswagen AG and the agents thus share responsibility for customer contact and vehicle group sales. This, in turn, will allow us to meet changing customer expectations and thus achieve success in marketing our products.
I would like to take this opportunity to thank our sales team and dealerships for their involvement in creating our new sales model and for supporting and implementing this strategy.