How to sell more at a higher price

The journey that Audi are now taking shoppers on started almost a decade ago. While much of the scene-setting I’m providing is supposition, it will be accurate enough to help us understand why we can now walk around a magnificent showroom to buy beautiful cars that are now more expensive than they ever were, and sold in greater numbers than ever before. Basically, Audi have increased their pricing and sold more cars.

Briefly and simply, two companies, VW Audi and Porsche, have always had a very close relationship. Herr Porsche designed the VW Beetle, and left to design sports cars under his own name. In brand terms VW was at the bottom of the German market and Porsche at the top. Mercedes, BMW and Audi were the filling in the sandwich. VW and Audi got together to create VW Audi, and Porsche owned part of the company. I said this would be simple.

Porsche lost their way in the 80s and a saviour took over as CEO and made them profitable, no, hugely profitable, through the nineties and noughties. The Porsche saviour looked at VW Audi and asked why, if VW was so successful at the bottom of the market and Porsche so successful at the top of the market, was Audi viewed as being inferior to and priced less than BMW. He then endeavoured to “punch above his weight” and mounted a failed takeover of VW Audi by the smaller Porsche.

This CEO is now gone but his views and observations, as quite possibly the best motor industry marketer in the last two decades, were heeded and applied.

Remember, great shopper experience is about the right product in the right environment. In order to move Audi cars up the price list to line up alongside BMW, much work was needed to match the already great product with a corresponding great retailing environment.

Audi needed to make no real changes to the product. It has great quality and design, a logical and easy to understand range and some good USPs in all wheel drive and in very fast sequential shift gearboxes.

Technically, they should fit comfortably alongside BMWs in the shopper consideration set. But when you walk into a BMW showroom and then into an Audi showroom, the look and feel of the showroom are as different as night and day.

Please don’t mistake this. The old Audi showrooms were adequate if the shopper was looking buy an expensive VW, but if the shopper was considering buying an Audi or a BMW, at around the same price point, then the Audi showroom was woefully inadequate.

The BMW showroom overhaul that took place in the early noughties aligned the experience with the quality and price of its showpiece – the car. Audi showrooms have not followed suit – until now.

If the right product is in the wrong retail environment, shoppers get confused. And confused shoppers don’t buy $400 mobile devices let alone a $90,000 car!

Take a walk or, if you love Audis, take a pilgrimage to the new “lighthouse”. Commuting by road or even by air, it is hard to miss the huge eight storey 12,000sqm architectural beauty on South Dowling Street in the southern Sydney city suburb of Rosebery. I would humbly suggest that it’s a great building in its own right, even though the French do say “one should never discuss taste or colour”.

Inside, the base model, pre-owned A3 for $35,000 sits comfortably alongside the new V10 Audi R8 at $401,000 in a showroom that does justice to both the shopper and the cars. Audi are planning new sites like it across the country with Melbourne, Canberra and Brisbane due for major new sites in late ‘09 and ‘10, while at the same time they overhaul all existing showrooms in its network.

This new Audi lighthouse in Rosebery alone is designed to help Audi move 1,000 of the overall 15,000 cars they plan to sell in Australia by 2015.

Based upon my own experience of the showroom and that of an Audi owning colleague, I would guess that Audi have moved a long way towards creating the right shopper experience to sell more cars at a higher price via a great shopper experience. “Vorsprung Durch Technik“, as they say in Germany, which surely means “shop ‘til you drop”.

In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.

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