Required Reading: Mercedes-Benz Steers Toward Better Interactions

Transformation can be a frightening thing—especially for large companies that have traditionally done pretty well in most areas of business. For Mercedes-Benz, holder of one of the best reputations in the automobile industry, the challenge was to improve the customer experience surrounding sales and service interactions.

In his new book, Driven to Delight, author Joseph Michelli uses Mercedes-Benz's story as an example of why it's never too early for companies to start preparing for the future, and to use signs of change as their guideposts. Associate Editor Oren Smilansky recently caught up with Michelli to discuss the company's shift of gears.

CRM: In your previous books you profiled customer experience veterans Starbucks, the Ritz Carlton, and Zappos. Why did you write this book about Mercedes-Benz, a company that decided more recently to make a commitment to improving customer experience?

Joseph Michelli: As soon as Steve Cannon got catapulted to the CEO position, he made customer experience one of his key agenda items. I got called upon to bring in some voices from other businesses like Zappos and the Ritz Carlton, and have a discussion about what these leading brands were doing, because Mercedes had committed itself to be on the same journey.

I said, "If you're on this journey, I'll participate in places and I'll chronicle it in others, and we'll share the company's story of transformation, as opposed to elevating a great experience that already existed."

CRM: How was poor customer experience starting to hurt Mercedes?

Michelli: There was an uneven and inconsistent experience that wasn't in keeping with what luxury customers expect from luxury brands.

Overall, Mercedes has been pretty [immune to] the problems it might have had if its products weren't as strong as they are. Its customers are fairly loyal, and marketing is effective at bringing in new ones.

But my hunch is that they'd lost some customers because the sales experiences were not in keeping with what they were hoping for. They were starting to see that people might settle for [a product that was] comparable enough, if it meant they would get a better experience.

CRM: Why has it become especially important now that a car company focuses on improving customer experience?

Michelli: The technology is changing. The connected car allows for direct interactions between the consumer and the brand at a level that hasn't yet been possible.

In the past, drivers had infrequent relationships with a car brand. They normally might have a positive experience around purchase, because they were excited about their new cars. During post-purchase, customers were still in a pretty good place with the brand, but then they had to come back in for routine maintenance. But that's still a relatively infrequent [interaction].

In the future, when the car can interact with the dealership in real time, they're going to have to be much better at leveraging knowledge of the consumer's position. If you're sending messages to a car, you're going to have to be able to anticipate the driver's needs when the car is sending you messages about customers.

CRM: What stood out to you as impressive about Mercedes's transformation?

Michelli: There are several things. They did an excellent job of creating a compelling, powerful, and relevant "why" that will be a legacy for people in the business. [Customer experience] is something they control, and they were pretty middle-of-the-pack at it.

From a standpoint of processes Mercedes did a very good job of looking at the experience from the customer's perspective, along with all the different journeys, beginning to end, technology and not. They did a good job of mapping the journey and listening at key touch points to get the feedback looped to the humans who could fix individual problems and bigger processes.

They also established alignment within their dealer community by making financial impacts for not playing well in the space. So if you are a superstar, you not only get your margin, you get extra. If you're not, you lose some of your margins to the superstars. That's for every sale of every car.

And finally, I think they spent a lot of time and money coming up with the right technology to interface with [people] at the dealership. [They offer] a seamless experience in the service side of the house, for example, where they didn't have that before.

They did so much right that I think it warranted a book.