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December 10, 2015

Jack Covert Selects: Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way

By: Dylan Schleicher @ 12:30 PM – Filed under: Innovation & Creativity, Leadership & Strategy, Management & Workplace Culture, Marketing & Sales

Drivendelight

Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way by Joseph A. Michelli, McGraw-Hill, 304 pages, $27.00, Hardcover, December 2015, ISBN 9780071806305

We’ve all been told time and again how important customer experience is. But nobody digs into exactly what that means and how the best companies deliver that experience quite like Joseph Michelli. He previous books include The Starbucks Experience, The Zappos Experience, and The New Gold Standard (about Ritz-Carlton), among others.

His new book is an interesting turnaround story, because it is a turnaround of an already successful company. It doesn’t involve the nuts and bolts of manufacturing processes, product quality, the minutiae of accounting, or the ousting a poorly performing CEO, but rather focuses on the experience it offers to customers. It is the story of Mercedes-Benz, which is known for quality and engineering. After all, Mercedes-Benz has been an engineering pioneer since it began in 1886:

In fact, Karl Benz invented the automobile itself (Benz Patent Motorwagen) and invented the first commercial vehicle. Since then Daimler vehicles have contributed to breakthroughs well beyond the internal combustion engine. A few of the areas on which Daimler has either introduced or advanced technological innovation include the first drop chassis, the original passenger car powered by a diesel engine, the creation of direct fuel injection, introduction of the first generation of anti-lock braking systems, the development of airbags, innovation of an electronic stability program, active lane keeping assist enhancements, and most recently the first autonomous vehicle.

 

That storied history is all a part of the experience the company offers its customers. Its engineering excellence is what has always attracted customers and kept them coming back, and has helped Mercedes become one of the most iconic brands in the world. It is a brand, thanks to its extraordinary marketing on top of its other competencies, that is synonymous with luxury and safety.

What it was still lacking when Steve Cannon took over in 2012 was a consistently excellent experience at the over 370 independently owned and operated dealerships that sold those engineering marvels. Cannon knew that this was becoming a huge hit to the brand—and potentially to sales. As new luxury brands entered the picture over the last three decades, they were getting beat at that point-of-sale experience. As a GM of a dealership in Virginia realized:

When I started in 1984 … whatever Daimler sent us, we sold. That was the luxury market. That clearly was an era where you were privileged to get a Mercedes-Benz. However, as the age of consumerism, competition, and technology advanced at warp speed, we became vulnerable if all we offered was a great product.

 

When Lexus entered the luxury market, they were very selective about who they allowed to sell their cars, and made each dealer sign an “covenant” that stated “Lexus will treat each customer as we would a guest in our home.” That (combined with other competitors like Acura and Infiniti) shifted everything. At Mercedes, as one customer states in the book, you were given the impression that you “should feel grateful that [you were] allowed to purchase their product.” At Lexus, it seemed that it was the dealer that felt privileged to be able to sell such a quality product. When Steve Cannon took over as CEO, he was committed to changing that, and began engineering a process to improve the customer experience at Mercedes dealers. This long-term change process had to span both Mercedes Benz USA (MBUSA) and the companies financing arm—Mercedes Benz Financial Services, which combined employs over 29,000 people in the US alone and was spread out across the independent dealerships. Among the other strengths it had to work with, the company had also become a leader in employee engagement. After its failed merger with Chrysler, MBUSA General Managers embarked on a mission to improve workplace morale and elevate their employees’ engagement and experience, which has landed them on Fortune Magazine’s 100 Best Companies to Work For regularly since 2010. As Michelli explains, this was a great foundation for the customer experience work he was embarking on:

The same steadfast leadership that resulted in these enviable employee-centered recognitions served as the bedrock for achieving the lofty customer-experience goals outlined in this book. Leaders at Mercedes-Benz USA are committed to providing a work environment for their people that allows them to serve the dealership community, so that those dealers can in turn serve Mercedes-Benz customers and prospective customers.

 

That seems like such a simple concept, but it takes more than lip service or admonitions to “do a better job.” It requires having a vision of exactly where you want to be combined with a wide-eyed, realistic assessment of exactly where you are today relative to that goal, and then coming up with a executable action plan to bridge the gap. And it will most likely not be a quick process, so you must be patient, focused, and committed over the long term, yet make the case for urgent action and change throughout that process. It may need to be, as is was at MBUSA, a “multi-year, multi-phase action plan.” You must make sure proper resources are committed, and will almost certainly have to have staff dedicated solely to it, to be “change agents” and market the changes internally, commit others to action, and engage all levels of leadership along the way.

In the case of Mercedes-Benz, they devoted 14 people to a Customer Experience team, directly overseen by the General Manager, who reported directly to the CEO Steve Cannon, to analyze and study what other companies were doing and bring disparate metrics and customer information together in one place. What they came up with was what they called “The Standard,” which the CEO himself shared directly with all the dealers. His commitment was that “Every touchpoint in the brand will be examined and refined.” That sounds simple, but it’s a massive undertaking, one that required “Every department would be mobilized” and “Every employee at every dealership would be trained and equipped.” They identified and selected frontline employees, “Customer Service Champions” they called them, to champion the cause of the customer and effect change across their dealer network in a way that tied back into the key performance metrics identified by the core Customer Experience team. It was a process as engineered and quality controlled as the cars they churn out, and details how Mercedes has built on a successful, quality obsessed and innovative engineering base to become a “customer obsessed culture and provider of innovative customer experiences.”

In telling the story, Joseph Michelli shows you how to make sure that your customers aren’t simply satisfied with the product or service you’re selling, but emotionally engaged in the process and leave delighted.


About Dylan Schleicher


Dylan Schleicher has been a part of the 800-CEO-READ claque since 2003. Even though he's stayed on at the company, he has not stayed put. After beginning in shipping & receiving, he joined customer service and accounting before moving into his current, highly elliptical orbit of duties overseeing the ChangeThis and In the Books websites, the company's annual review of books and in-house design. He lives with his wife and two children in the Washington Heights neighborhood on Milwaukee's West Side.