What Can Your Business Learn from Mercedes-Benz USA?

Five Unexpected Truths about Customer Service

February 2016

When Mercedes-Benz USA realized it wasn’t delighting its customers, it dialed up an overhaul. A new book by consultant Joseph Michelli shares its journey—and reveals some surprising insights on what today’s customer wants and needs from companies like yours.

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.
    
Consultant Joseph Michelli, who worked with MBUSA on its journey, says 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,” says Michelli, best-selling author of “Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way.” “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 two years, the company catapulted customer sales satisfaction from an unenviable #6 spot to the No. 1 position on the J.D. Power SSI survey.
    
Michelli’s book shares details on what MBUSA did to elevate its customers’ pre-sales, sales and service journey. In this article, Michelli identifies just a few of the “business lessons” every leader 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,” says Michelli. “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 1980s, 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,” reflects Michelli. “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,’” explains Michelli. “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 Michelli feels it’s mostly because it allows for worry-free driving.
    
“Customers will pay to avoid being annoyed and inconvenienced,” he says. “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.” (Would you considered “free change orders” for up to a certain amount of money?)
    
Saying yes when customers expect a no goes a long way. Michelli’s book 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,” notes Michelli. “It’s gotten so that people expect to hear ‘no’ from companies. If you can say ‘yes,’ you’re ahead of the game.”

Joseph A. Michelli, Ph.D., 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. Learn more at www.josephmichelli.com.

“Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way” (McGraw-Hill; December 2015; ISBN: 978-0-07-180630-5; $27) is available at bookstores nationwide and from major online booksellers.