This article is reprinted from the Autocarweekly public account
Author: Boss Wang
I remember a few days ago I asked my boss this question: “Why do some automakers spend a lot of money pleasing customers? Won’t they lose money?”
The boss answered very straightforwardly: “If you treat your customers well, how can they bear to leave you? Naturally, it will attract more users to join you, and this is the only way for user-based companies to survive.”
Traditional companies consider customers as the endpoint of transactions, but for true user-based companies, transactions are only the beginning of serving customers. Improving user stickiness and realizing user operations is the key to the survival of user-based companies.
Therefore, more and more users will give up purchasing products from traditional BBA companies and turn to emerging car brands with less routines and better services. Not to mention how well their cars are made, at least their services are in place. It’s not just about serving coffee when opening an order, but about realizing true user operations in the entire chain from car viewing, selecting, purchasing, and using.
It is very difficult to break through the inherent pattern, because the interest chain is deeply rooted. Only new brands or sales systems dare to call for a new era.
The first one to figure out this problem is the new partner of the Audi brand in China, SAIC Audi.
You may ask, do SAIC Audi and FAW Audi have overlapping product lines? Will there be malicious competition between the two sides?
I think this is a question that must be answered before discussing SAIC Audi.
The task of SAIC Audi is to develop new segmented markets and complement FAW Audi, with a very clear target group, which is those customers who are still young at heart.
Take the upcoming Audi A7L as an example. It perfectly fills the market gap between A6L and A8L. In fact, many users still have some concerns when buying A6L, such as whether driving this car will make them look like a driver. This car is already everywhere, and driving it is not unique, and so on. The A7L solves users’ pain points very well. Its shape is young and sporty, giving a sense of New Money.
For me, I don’t think I can ever accept driving a “greasy car”. No matter how old I am, I will always love driving. The feeling of unity between people and cars really makes me forget all my troubles.
But the difference in product lines between SAIC Audi and FAW Audi is far from enough in the current situation. The transformation of the operating model is the primary issue that a new company must consider.
The first step in changing the operating model is to change the business model.# SAIC Audi’s New User Operation Model: Entity E-commerce Eco-experience
SAIC Audi wants to create an efficient, direct-to-user operation model that covers the entire user lifecycle. These three words have never appeared in the traditional luxury brand sales system and are known as the Entity E-commerce Eco-experience by SAIC Audi.
The ultimate goal is to achieve a win-win situation for consumers, sales channels, and the automotive industry.
Connecting online channels is almost necessary. At the e-commerce level, SAIC Audi strives to create a digital service ecosystem, using big data to collect user information from multiple points, maximizing the closeness between the brand and users, and quickly and efficiently responding to user needs.
This reminds me of the saying, “If the people need it, XX will create it.” It has become a well-known principle for major automakers when considering how to serve users.
Having only online channels is not enough. To truly experience a car’s product strength, you have to sit in it and drive it. No one dares to buy a car using just a keyboard.
This is where offline channels become particularly important. Still calling them 4S stores? Still located in the suburbs? That’s out of date. Nowadays, automakers who want to stand out know they need to integrate deeper into users’ lives. Don’t rush to build a complete service system; start by establishing “experience stores” in city centers. These stores are just exhibition halls where users can browse around while waiting for a table at a restaurant, take a break during a walk at noon and experience luxury and technology, or enjoy some time with their children over the weekend.
The atmosphere and vibe inside the store must match that of the surrounding commercial area. When the test drive car comes out of the nearby parking garage, its posture must be elegant and dignified. Gone are the days when the car was pushed to the limit by flooring the accelerator right away, which is just tacky.
Well, SAIC Audi announced that it will build three types of offline spaces: urban experience stores, experience centers, and brand centers. They plan to build 200 different-sized experience centers in 80 cities in the initial stage. As the main headquarters in the magic city, the first flagship brand center of SAIC Audi is located in the heart of Shanghai, and is expected to become a city landmark.
These brand centers and urban experience stores located in the city’s mainstream commercial areas ensure high-density and continuous passenger flow, providing a steady stream of natural foot traffic. That is to say, there won’t be any lonely stores.
So, the OMO (Online Mix Offline) model of online and offline channels has been connected. How should cars be sold now?
SAIC Audi proposes a new agency model.According to the statement made several years ago, the sales channels need to borrow part of the existing sales system of FAW Audi, but this does not mean that SAIC Audi has completely lost the initiative. SAIC Audi has the right to select partners to cooperate with in the existing Audi Investor network to build a sales channel experience center.
At the beginning of the company’s IPO, SAIC Audi strangled various pain points of traditional 4S shops and adopted a sales model that connects brands and users directly. The prices are unified and transparent, and users sign car purchase agreements directly with the brand without allowing intermediaries to make price differences.
Just this alone makes people feel much more comfortable.
The vicious competition among dealers before was due to the pressure of inventory. Dealers had to engage in price wars to accelerate inventory clearance and reduce the pressure of call cars we often mention.
This time, SAIC Audi decided to eliminate this malpractice. Agent partners only need to pay a certain amount of deposit to SAIC Audi, and the vehicles will be transported from the factory and stored in SAIC Audi’s front warehouse, without considering inventory problems.
That is to say, the dealer’s store will not have any inventory in the future (even if they are in the business district, they cannot afford it). Users should also go to a certain delivery center to pick up the car. It may lack some cake, flowers, wine, and firecracker ceremonies, but who cares about those things? Users who purchase luxury brands have long been worldly-wise and know the truth.
So how do dealers make money without making price differences?
The essence is still in a service.
Nowadays, dealers no longer have to think about how to grab more wool from users, but instead, they have to think about how to let users grab wool on themselves, making obvious losses and hidden gains. This is the ultimate idea of selling cars in the new era.
SAIC Audi’s agent partners only need to focus on thinking about how to serve users well, provide high-quality and high-value service experience, help users understand products, assist transactions, provide test drive services, and get high service scores. The main factory will pay commissions and rewards to its partners accordingly.
That is to say, whether users finally buy or not is not what you should be thinking about. You just need to focus on “Service” rather than “Sale”. Once you serve my customers well, you will earn money. Whether you sign the deal or not is not your concern.
Then the question arises, how do we proceed with after-sales service after the car is purchased?This is something that SAIC Audi has been very clear about. The existing after-sales system of FAW Audi is already very perfect and the service has been well received. Therefore, it will be used as is, and all existing FAW Audi 4S stores can apply to provide after-sales service for SAIC Audi’s products. In addition, if a FAW Audi dealer participates in the construction of SAIC Audi’s experience center, then FAW Audi must provide after-sales service for SAIC Audi’s products. This avoids the problem of only selling without being responsible for repairing.
Through this seemingly decoupled business model, it actually breaks down the information barriers in various links such as marketing, sales, after-sales, and services, providing consumers with more customized and precise high-quality services.
This is also the core thinking of SAIC Audi’s innovative business model.
Now, someone may ask, is there any service when I use the car?
Taking the SAIC Audi A7L as an example, we can take a look at what application services will be available in the car.
In addition to the information services provided by Audi Connect in the past, such as navigation, route planning, intelligent voice assistants, Audi service inquiries, remote control, stolen vehicle tracking, emergency calls, and road rescue calls, Audi has also introduced popular applications such as Kuwo Music and Himalaya into the car through an open Android application platform named Asterix.
It is also worth mentioning the cooperation between SAIC Audi’s Audi Connect service and Tencent Auto Intelligence (TAI).
Nowadays, I bet that everyone will hold their phone and look at WeChat while driving, even though it is illegal, unless they don’t use WeChat.
Finally, if you have an accident and don’t know who to blame, you can only blame yourself.
Instead of letting you use WeChat illegally, why not install a set of in-car WeChat for you, allowing you to chat with others legally and safely while driving?
With the advantage of being a latecomer, the SAIC Audi A7L has become the first Audi model to achieve in-car WeChat. In addition to WeChat, Tencent’s eco-services such as QQ Music, Tencent Scenes, and Tencent Maps are all provided to car owners.
While other automakers are promoting E-Call as a highlight service, SAIC Audi has already thought clearly about the Internet of Vehicles.
According to the agreement, the SAIC Audi A7L pre-production version can only be delivered to customers on January 1, 2022. Let’s boldly predict its price range now.According to the official website of FAW-Audi, the current imported Audi A7 Sportback with a 2.0T EA888 four-cylinder engine costs over 700,000 yuan, while the top-of-the-line A6L 3.0T V6 version costs no more than 650,000 yuan.
As the saying goes, horsepower is justice. When driving a 2.0T A7 on the highway and getting overtaken by an A6L, I would certainly feel uncomfortable.
So, it’s time to switch cars. As a young person, I cannot compromise on my passion. I could give up the coupe, but I cannot handle the grease. Although the entry-level price of the A8L is only 840,000 yuan, it’s ultimately a car for passengers and not suitable for me.
The A7L from SAIC-Audi is a good alternative, with a stylish exterior design and a 3.0T Porsche Macan S V6 engine. The price is likely to be higher than the imported 2.0T A7, but it should be more expensive than the A6L. After all, “7” should be more advanced than “6”; thus, it should start at 700,000 yuan. However, it cannot compete with the big brother A8L; otherwise, it would be accused of copying. Therefore, it should be cheaper than 840,000 yuan.
In conclusion, the official guide price of the A7L should be between 700,000 to 800,000 yuan. For users who desire high-displacement V6 models, this price is very attractive. After all, in today’s trend, the glory days of fuel-powered cars are getting shorter, and high-displacement engines will inevitably become financial products.
Finally, I seem to understand how SAIC-Audi intends to sell its cars. It no longer wants to be called a “traditional automaker.” Tradition means being conservative and facing elimination. Instead, SAIC-Audi wants to innovate and minimize or even eliminate the difference between itself and new carmakers. It wants to think about how to create a core value of service and achieve mutual benefits between consumers, dealers, and automakers under the current trend.
In other words, SAIC-Audi’s goal is to become a real user enterprise.
It seems that SAIC-Audi can now realize this dream, and I wish them good luck.
This article is a translation by ChatGPT of a Chinese report from 42HOW. If you have any questions about it, please email bd@42how.com.