Brand awareness isn't a challenge for a company like Mercedes-Benz, but even a brand that's associated with luxury and quality must do more to stay ahead of the competition. As the automotive space undergoes massive digital disruptions, traditional car makers are pressured to keep pace with changing customer expectations.
Joseph Michelli has scrutinized the business strategies of disruptors like Starbucks and Zappos and now turns his attention to Mercedes-Benz. In his latest book, Driven to Delight, Michelli tracks Mercedes-Benz USA's journey in transforming its customer experience in an increasingly digital-first world.
1to1 Media: How did Mercedes-Benz create an emotional connection with new customers without alienating its loyal customers?
Joseph Michelli: First and foremost, the vehicle was the anchor point. If you don't get the product right first, you can't move on. Mercedes-Benz has a craveable product that enabled it to build an existing market while serving the entry-level customer who is interested in dipping his or her toe in.
In terms of the actual differentiating experiences, Mercedes-Benz has spent a lot of time in the technology space adding value and convenience to its product and that really resonated with the existing customer base as well as up and coming customers. Mercedes-Benz has done a good job in removing pain points with technology. The company also doubled down on getting employees to understand the value of customer experiences.
Can you give me an example of how Mercedes helped employees understand the value of the customer experience?
JM: It's important for employees to understand what the customer is experiencing and why they should care. That was hard at first because not everyone who works at Mercedes-Benz necessarily owns a Mercedes. So the company introduces things like the brand immersion program [a two-day program that includes a factory tour, classroom training, and test driving the vehicles]. It's about making sure Mercedes can enrich the experience of their employee so they can understand the customer's experience.
Employees were challenged to answer the question, "What can you do to add value to the customers' lives?" First the employees have to understand what customers want and feel. Then, they need to see the elements that works to improve their lives. Finally, they have to make that happen. That's what I've seen happen throughout the Mercedes-Benz brand.
Who is Mercedes-Benz's biggest competitor?
JM: In terms of sales, it's BMW, but in terms of experiences, I think the bigger threats are companies like Google and Apple. All brands had better think about maximizing technology wherever they can. [Starbucks CEO] Howard Schultz said it knew it had to become a technology company. The same is true with dealerships. Dealerships have been devoid of technology for a long time. And so, disruptors like Tesla are changing the sales experience inside of a retail space.
Mercedes-Benz understands the importance of evolving with its customers and is a leader in the use of technology to create seamless experiences, such as with connected cars. However, the challenge for all brands is how to take all their data and turn it into knowledge and how to help people go from online to offline experiences.
What should other business leaders, including those who aren't in the automotive industry, keep in mind when trying to re-invent their customer experience?
JM: They should ask themselves what they want customers to come away with after visiting their businesses. They should define their brand promises experientially and create an image of what that experience looks like. What do they want customers to say about them? Why is the experience worthwhile?
At some level they also have to get their arms around what the experience looks like from the customer's vantage point. Are the changes perceptible to the customer? Also, they should make sure their employees have the journey map in their line of sight. Employees should be able to appreciate the role they play in helping customers and be able to empathize with the customer. It's not enough to just chase after ratings and CSAT indexes. Companies have to go deeper than developing a superficial operational strategy. It's about answering the question, "Why do we care to elevate the experience in our space?"