Read the full interview HERE
We recently interviewed the CEO of Ferrari China on how the company curates the buying experience and what it means to join the exclusive Ferrari club.
In the full interview we explore:
- Difference between Chinese and Western consumer behavior and psychology
- How Ferrari curated the buying experience from showroom to vehicle delivery
- The Ferrari philosophy and brand equity management
- The advantage of leveraging F1 for commercial products
- Challenges and complexities of operating in China
What part of the process do you think drives the most exclusivity? Do you think it’s that club part, at the end, where they get accepted into the club?
It’s definitely the product. The product is the generator of exclusivity. When you drive a Ferrari, you drive a Ferrari. Full stop. It’s where everything starts from. All the rest, of course, are many bricks that will build the overall experience. But everything starts from the product. To drive a Ferrari is a unique experience. In fact, honestly, for us, the main difficulties in finding new clients, is to identify people and let them sit in the car. Let’s say, if we put 10 people sitting in and driving the car – the right people, of course – you can be sure that between three and five will buy the car. The experience related to driving this car is very unique. I think, truly, everything starts with the car and from the product and experience. The exclusivity comes from there. A Ferrari is an exclusive product, by definition.
Other brands choose a different way of doing things. They decide to reduce the entry level and they leverage a lot on the brand. Some German cars, for example. They used to be very exclusive, in the past and then, step by step, with the introduction of more affordable models, they leveraged the brand to sell a lot of cars. This is not for us. We believe that when you buy a Ferrari, you will be in an exclusive position for the rest of the life of the car. The protection of the residual value of the car is one of our missions. When somebody buys a Ferrari, they should be reassured that this car will never become a piece of metal, ever.
The protection of the residual value, the pre-owned market, for us, is a priority. As the founder of the company always said – and I want to repeat it, because it very clearly explains the philosophy of the company – we should always sell one car less than the demand; we will never sell one car more than the demand. You will never find a Ferrari dealer or a Ferrari manager, like myself, pushing. We never push. Ever. For us, the most important thing is to always have the correct amount of cars in the market. Even if we can sell more, we refrain from selling, because we have to protect the exclusivity of our clients, whether they buy a new Ferrari or a pre-owned Ferrari. This is a key element of the business model. But it’s a philosophy more than a business model. It becomes a business model, later on, because the people look to our philosophy and transform it into a so-called business model. But the philosophy, the passion behind it is, the car is unique. When you buy it, you make an investment for life. This is important.
How do you deal with the challenge of finding new customers and putting those 10 people in the seat of the car? What approaches do you have, for finding those people?
Let’s say, that having such a powerful product, when we launch a new model, I would say that between 30% and 50% of clients are repeaters. Normally, those who purchased the car in the past will purchase again and again and again. Sometimes, keeping them all and sometimes, simply selling the old one and buying a new one. The relative number of repeaters is very high. This protects us against big surprises.
Then, of course, especially launching and opening our brand to new segments, when we entered the GT segment, more than 10 years ago, like it used to be 50 or 60 years ago, in Ferrari. Ferrari produced GT since the beginning, but then became famous for sports car. With the launch of California that was the return of Ferrari to the GT market, of course, we enlarged the number of potential clients. There were a lot of new Ferrari clients. How do we get them? There are several marketing ways to collect prospective clients but, at the end of the day, the key issue is to have people sitting in the car and have a test drive. This is the real selling point. No matter how beautiful the car is, no matter the level of personalization and color, the real difference is always the driving. The driving experience is what makes a Ferrari completely unique.
I also, aesthetically, love the cars. Some more, some less. With competitors, you can also choose the colors. They have hundreds of colors and they also have personalization. There are not too many competitors in our segment but, at the end of the day, we have five, six, seven that we see as our competitors. They are all very good cars. But our car is unique in the driving experience. There was one of my previous CEO who said that, when you buy a German car, you buy, most probably, a perfect car. But it’s like buying a perfect refrigerator. It’s perfect, fantastic, but it’s cold. When you buy a Ferrari, maybe sometimes, we are not perfect. As I said before, maybe sometimes we have small problems or we have some very little issues, but you are buying a passion. You are buying something where you sit in the car and you feel the difference in the engine, in the soundtrack, in many things.
When we design and we build engines, we are not only thinking about power and rate of 1-100mph. They are the parameters, of course, and are used as the selling points. But for us, the soundtrack is absolutely important. One of the engineers once told me, the engine was perfect, but it didn’t have the right sound. So sorry, we don’t want it. They have to redesign the engine, because it didn’t have the right sound. The sound of the car is an integral part of the experience, when you drive. When you sit in the car and, overall, you have the driving experience, including the soundtrack, you fall in love with it. I think we have one of the highest conversion rates in the industry. You drive it, you want it.
Read the full interview HERE