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Old 02-19-2007, 08:35 PM   #1
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Default Rolls-Royce works hard for its elite clientele

Rolls-Royce works hard for its elite clientele


Dinner parties, letters from the CEO and custom car features are among ways the brand pampers its customers

Premium car companies often like to talk about making every customer count. When Rolls-Royce Motor Cars Ltd. does so, it is difficult to doubt its sincerity.

The British super-luxury brand, owned by Germany's BMW, sells barely 800 cars a year. Retail prices for the company's Phantom cars start at $400,000, and models with many customized features can cost millions, making every sale made or forgone an event for the carmaker.

But Rolls-Royce's rarefied prices pose special marketing challenges. The company's target customers are people with liquid assets of at least $30 million, a group that automotive consultant Capgemini estimates at 85,000 worldwide.

"Conventional car companies tend to push cars down a pipeline and expect people to buy them," said Ian Robertson, Rolls-Royce's chairman and chief executive. "We are dealing in a very small niche right at the pinnacle."

Rolls-Royce, which does not report financial results independently of its German parent group, also does not disclose the size of its marketing budget, which Robertson described as "very small." However, the company recently spoke to the Financial Times about techniques for marketing to the super-rich.

If conventional marketing could be compared to a shotgun approach, one company executive said, Rolls-Royce's was more like a sniper rifle. "It's really about being intelligent about how we network," he said.

Although the brand does a limited amount of print advertising, people with enough money to buy a Rolls are difficult to address, Robertson said, and do not respond to conventional advertisements. They also tend to have lots of people around to protect them from unwanted sales pitches.

"For these people, drinks of vintage champagne are nothing special," he said. "You have to capture their imagination by offering them something they can't otherwise get."

The marque's main point of contact with existing and potential customers is through its 79 independently owned dealerships worldwide. It chooses dealers who "live in the same world, drive the same cars, have the same yachts and aircraft" as its customers, Robertson said.

The dealership in Berkeley Square in London's Mayfair, owned by luxury chain H.R. Owen, organizes "wonderful lunches" and dinners for "like-minded people" at hotels such as the Dorchester, said Rodney Turner, director of Rolls-Royce Motor Cars London.

"We're dealing with the children of parents who have had a link with our business for years," Turner said. "We like to make them feel very special."

People who attend Rolls-Royce's meals, he said, often transact millions of pounds' worth of business that has nothing to do with cars, but that gives the events added cachet. The dealership holds about four such events a year. "We don't over-egg the pudding," Turner said. "If you did too many, people wouldn't want to come."

Europe's other small top-end brands face similar challenges. Lamborghini, owned by Volkswagen's Audi premium car group, last year sold a record 2,087 cars, which retail in the range of 150,000 to 350,000 euros ($197,000 to $460,000).

Lamborghini teams up with strategic partners such as the Versace fashion house, which designed the interiors of its special-edition Murcielago roadster. The company also does a bit of nonpaid product placement by offering its cars for films ("Mission: Impossible III," "Batman Begins").

At the recent North American International Auto Show in Detroit, Lamborghini's exhibit attracted close attention from photographers, partly thanks to two young hostesses posed next to its cars.

Rolls-Royce opts for a distinctly less flashy approach, shunning co-branding in favor of word of mouth. In New York, the brand recently hosted a dinner party at a Fifth Avenue property normally closed to the public. Last year it flew in the designer of the Phantom to discuss his work over dinner at a Miami restaurant.

"Our customers like a degree of kudos. They can tell friends they had dinner with Rolls-Royce, or they met the designer of the Phantom," said Graeme Grieve, Rolls-Royce's sales and marketing director.

Because of the carmaker's small customer base, it can afford to stay in personal contact with buyers. Customer loyalty is high, especially in the U.S., where about 30% of business comes from repeat purchasers.

Last year Robertson personally signed letters to all of the brand's 2,700 customers of the most recent three years, and sent out a coffee-table album to previous buyers. The book features individual testimonials from customers such as Japanese fashion designer Nigo, now on his third Phantom.

The focus on individual "bespoke" features may also serve Rolls-Royce's interests. The brand recently sold a full-stretch Phantom to a customer in China one of the fastest-growing markets for luxury cars for $2.2 million. Another customer, who did not like the standard Phantom's furnishings, ordered a crystal ashtray, a refrigerator for champagne and space for two glass flutes at the door base.
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