Tony Davis
 

Meet Ferrari's Dr No

Enrico Galliera is the man who often has to deliver 'bad news' to Ferrari's richest customers

Ferrari chief marketing and commercial officier Enrico Galliera Photo: Giorgio Benvenuti
 

Meet Ferrari's Dr No

Tony Davis

Enrico Galliera is the man who often has to deliver 'bad news' to Ferrari's richest customers

Enrico Galliera is the man billionaires lobby when there is a new limited edition Ferrari. As the company's chief marketing and commercial officer, it falls on him to decide who gets a car, and often it falls on him to deal with those who don't.

"The most difficult part of my job is to say no," he confirmed with a wry laugh, adding that the pressure from some buyers can be "extreme".

"We have much higher demand than the availability. So what we do is identify criteria that is rewarding good customers. The limited edition cars we consider a gift to our best customers."

The idea of a $1.8 million-plus car being a gift may sound arrogant, and may well be arrogant, but there is a logic to it. After drawing up his list for the most recent "special", the LaFerrari Aperta convertible, Galliera posted to 200 prospects a little box containing a Ferrari key and a note asking if they wanted to buy the forthcoming droptop, sight unseen.

LaFerrari Aperta, Salone di Parigi 2016

The Ferrari LaFerrari Aperta was in high demand. Photo: Ferrari

In a response that must infuriate everyone else trying to sell things by mail, every single recipient said yes. That accounted for the entire 200 vehicle production run in one mail-out. Mind you, the key recipients would have been mad to say no even if they didn't need, or want, a new hybrid powered hypercar costing €1.2 million plus tax. The LaFerrari coupe has tripled in price since its launch just four years ago and the convertible will likely follow.

"At the very beginning you receive applications from people who do not deserve, they simply have the money. 'I am the king of something, so I deserve the car,'" said Galliera. "I say 'Yes, but you are not a Ferrari client.'"

"That's the easy part. Then you have someone who is still a very good customer but is not in the top 200, and I cannot offer him the car. Normally most of them understand … some of them that are not used to hearing 'no' keep asking. The most difficult part of my job is when I join an event and the person is there, and he becomes hard headed, and he locks onto me and keeps asking and asking."

Earlier this year American watch and jewellery magnate David Lee had a multimedia dummy spit. Ferrari wouldn't sell him an Aperta even though his $50 million car collection included a dozen from the Prancing Horse brand, and he had apparently just ordered four new Ferraris to improve his rating with the factory.

Galliera concedes that not everything he does is as easy as creating demand for limited edition models that will almost certainly go up in value. The main task is selling the regular production models under Ferrari's rules of no company-supported advertising, no special offers and no discounting. He insists even the Ferrari Formula One drivers pay full freight for their cars; indeed they are the only employees who are normally allowed to buy a new Ferrari.

"The philosophy is that with such limited production and clients waiting so long to get their car, it's not nice if the car is delivered to employees. It is clients first," he said.

MONTE-CARLO, MONACO - MAY 27: Sebastian Vettel of Germany driving the (5) Scuderia Ferrari SF70H on track during final practice for the Monaco Formula One Grand Prix at Circuit de Monaco on May 27, 2017 in Monte-Carlo, Monaco. (Photo by Shaun Botterill/Getty Images)

F1 is key to Ferrari's image but sales remain strong win or lose. Photo: Getty Images.

The main marketing tools are word of mouth, events and the involvement of clients in activities. Although he says the DNA of Ferrari is racing, "How much is it impacting our sales performance? Relatively little." Sales have climbed markedly in recent years despite comparatively lean times in Formula One.

Galliera, 51, was born 60km from the Ferrari factory but finished his formal education at the London Business School. His previous job couldn't have been further away from high performance cars. He was a senior executive at Barilla, best known for its pasta. "I went from selling a product that cost 50 cents per pack, to a product that is costing not less than €200,000."

Ferrari wanted to tap into something Galliera had achieved for Barilla: standardised global processes. "The company was growing as they opened new markets," he said of the time he joined Ferrari in 2010, "but the customer experience and the treatment of the brand in each country was different. There was no global coordination."

He throws in an amazing statistic: Ferrari, which now operates in 62 countries, sells just three per cent of its production in Italy. That means a new Ferrari is a more common sight in Australia than its homeland. Last year, of the 24.5 million Australians 188 new Ferraris found new homes, while in Italy, with 61 million, people there was about 240 new Ferrari sales.

The company produced 8000 cars in 2016, an all-time record. Increasing the output is one of the most controversial topics among Ferrari aficionados, some of whom believe it will devalue the brand and its products. Long time former CEO Luca De Montezemolo reputedly left in 2014 because his new group boss, Sergio Marchionne, demanded he shift more metal.

Galliera argues that Ferraris are more exclusive now than 10 years ago when the company sold 4000 a year, because they are sold in many more markets, and there are far more people around the world with the means to buy high level luxury goods. "What is important is the ratio between the demand and the level of cars we deliver in the marketplace," he argued, pointing out the waitlist for the latest model, the 812 Superfast coupe, blew out to three years before anyone had even driven it.

2017 Ferrari 812 Superfast.

There is a three-year waiting list for the Ferrari 812 Superfast. Photo: Ferrari

"Clients and dealers are complaining about too long waiting lists. We cannot tell a client that he has to wait three years to get the car… We need to define what to do, and it is under discussion."

Is 10,000 a year possible? "I'm not prepared to answer a volume question but, with the level of demand that we have, we could go up."

The company is involved in various activities such as customer racing, track days and road rallies, plus customisation and restoration services that "give us an opportunity to grow as a company without only pushing on the volume side." The customisation program reaches its zenith with the most exclusive Ferraris of all: the one-offs. Galliera said each year they deliver two or three bespoke bodied cars, at about €3 million each.

"This is considered to be the pinnacle of the experience in Ferrari, the most exclusive product. We select the customers, they should be in our top, top list, and then they enter in the process… they become part of the development team. They have to commit to come here [to the factory] frequently.

"From a revenue perspective it is very small, from an image perspective it is very important."

Buyers of all limited edition Ferraris must now sign a contract committing not to resell within 18 months – except to Ferrari at the price paid. Galliera says they have bought only one car back: a Swiss customer decided he wanted a historic Ferrari F1 racing car instead.

 
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