To drive a Mercedes-Benz is to say, “I’ve arrived.” It’s hard to argue that point. MBUSA is known the world over for its superb engineering and the quality of its luxury automobiles. Yet despite a brand synonymous with “the best,” it wasn’t long ago that MBUSA’s customer experience was falling short of expectations. That’s why a few years back it launched a company-wide transformation to instill a “true customer obsession” in employees and dealer partners alike.
I worked with MBUSA on its journey, and say its story reveals and reinforces some surprising truths about the nature of service.
Everything about how customers make decisions, and what they expect from the buying experience, has changed. We simply live and work in a different service universe now — and we ignore its principles at our own peril.
MBUSA’s efforts to create a seismic culture shift — which involved a complex and aggressive deployment of people, process, and technology strategies — were incredibly successful. In the space of 2 years, the company catapulted customer sales satisfaction from an unenviable #6 spot to the #1 position on the J.D. Power SSI survey.
My book Driven to Delight shares a wealth of details on what MBUSA did to elevate its customers’ pre-sales, sales, and service journey. It offers readers the tools they need to craft a compelling leadership vision, actionable guidelines to tactically effect transformational change, and inspiration for creating experiences that produce customer loyalty and a willingness to refer others to their business.
Here I identify just a few of the “business lessons” every leader (especially those representing high-end luxury brands) can learn from the Mercedes-Benz story:
Even Mercedes-level product quality can’t overcome mediocre service.
Thanks to the endless options spawned by the global economy and the world of information just a mouse click away, customers now demand world-class service. This truth was brought home to MBUSA when competitors started making inroads in the marketplace with high-quality luxury automobiles and the ability to provide a better dealership experience.
Bottom line: Customers want the best car in the world and the best service in the world. And you’d better figure out how to give it to them.
Older, well-established companies are at a distinct DISadvantage.
It’s easier to come in after a shift in consumer behavior and tailor your company to meet the new needs than to reinvent yourself. Brands like Lexus, which entered the marketplace in the late ’80s, could design an optimal customer experience from the outset. MBUSA, on the other hand, had to transform the mindset and behavior of longstanding dealers beyond an established product-centric perspective entrenched through generations of dealer ownership.
In many ways, market ownership is a burden. If you’re not careful, it can make you complacent and slow.
Customers now have a say in employee pay.
This trend cuts across a wide swath of industries, public and private. Thanks to the Affordable Care Act, hospitals now have a portion of their reimbursement linked to results on a standardized patient experience survey. In the last few years, MBUSA has made a similar shift: President and CEO Steve Cannon worked with his dealer partners to make customer-centric changes to their dealer compensation structures.
Basically MBUSA is saying, “We’re linking part of your guaranteed margin to your performance in our customer experience initiative.” While this is scary for dealers, it’s the best way to engage them to make the needed changes and hold them accountable for doing so.
Prepaid is better than “free”.
When Mercedes-Benz launched its prepaid maintenance program, it got better satisfaction scores than with so-called “free” alternatives offered by competitors. This may be partly because customers realize that “free” maintenance programs are really paid for in the vehicle purchase price and because they’re aware that many exclusions exist — but I feel it’s mostly because it allows for worry-free driving.
Customers will pay to avoid being annoyed and inconvenienced. They’re still paying — but they’re getting it over with now so they don’t have to deal with it again and again later. It’s like Amazon Prime where you pay upfront for “free” shipping, or the fast passes at amusement parks where you pay more to avoid long lines. It’s a more honest way of doing business, and customers appreciate it.
Saying yes when customers expect a no goes a long way.
Driven to Delight tells the story of a Mercedes-Benz owner who left some fur earmuffs in the back seat when she took her car in for service. When she picked it up, the earmuffs were gone. The customer asked the dealership if the earmuffs could have fallen out. She didn’t really expect to hear from them — but to her surprise and delight, she received a check for the lost item soon thereafter.
It’s so important to train and empower your partners and employees to surprise customers this way. It’s gotten so that people expect to hear no from companies. If you can say yes, you’re ahead of the game.
I’ve written books on some of the world’s most customer-centric brands, so I know how hard it has been for Mercedes and its dealer base to orchestrate such a dramatic culture change. They made an amazing turnaround in just a few years. All businesses can learn from them — and I don’t just mean the steps they took, but the desire and determination to continue on the path until they reached their goal.
About the Author: Joseph A. Michelli, PhD, CSP, is an internationally sought-after speaker, organizational consultant, and New York Times number-one best-selling author. He is a globally recognized thought leader in customer experience design. For more information, please visit www.josephmichelli.com.