I was thinking how do I begin the story of a customer centric organisation and then I came across an article in a book by Chris Denove and James D Power IV titled "Satisfaction". Let me run through the story that I think embodies a Customer Centric organisation
Lexus has been winning one or the other JD Power Automotive Satisfaction Study since 1989 and that was not by accident. In 1983 the then Toyota chairman decided to get into the luxury market with the mission "It is time to build a car that is better than the best in the world". Toyota till then manufactured low-cost vehicles and it was but obvious that their mission statement was met with a lot of sniggers from the then luxury car makers in Europe. However, since it launched its first model the LS 400, it has outsold every luxury brand including BMW and Mercedes-Benz to become the best-selling luxury auto maker in US history. The key to the success of the Lexus is the visceral understanding of the critical relationship between manufacturer, dealership and the customer.
Toyota defined luxury as "Total Ownership Experience" that included a defect free vehicle and great dealer service. The following example exemplifies this belief - the LS 400 (launched in 1989) sold well though at about half the price of competing European luxury brands. A couple of months into the programme, Lexus faced a problem they were dreading and competition was hoping would happen. Two customer complaints about a faulty cruise control glitch left Lexus in a quandary - do they just fix these 2 cars and wait to see whether others surface with a similar problem or issue a recall and let the world know that Lexus engineers were human after all. The decision was simple and they set an example that is still talked about among automotive insiders today.
Lexus recalled every one of the 400 vehicles it sold. While they knew their decision would be a PR nightmare what with competition ready to pounce on every miscue, Lexus realised that this recall provided them with an opportunity to show the world that they were dealing with an entirely new kind of car company, a company that didn't just talk customer satisfaction, but lived it. Lexus owners did not just receive a recall notice, but were also advised that their dealer would pick up the cars from their homes and leave them a loaner car free of charge while the repairs were being made. Every car was returned to the owner washed, detailed and with a full tank of gas. There was also a gift sitting on the driver's seat as thanks for their patience.
This was actually the day Lexus was born and not when it sold its first car.
That to me embodies an organisation that "walks the talk" and eschews inexpensive short-term solutions to a problem in favour of a more costly but permanent fix.
Lexus has been winning one or the other JD Power Automotive Satisfaction Study since 1989 and that was not by accident. In 1983 the then Toyota chairman decided to get into the luxury market with the mission "It is time to build a car that is better than the best in the world". Toyota till then manufactured low-cost vehicles and it was but obvious that their mission statement was met with a lot of sniggers from the then luxury car makers in Europe. However, since it launched its first model the LS 400, it has outsold every luxury brand including BMW and Mercedes-Benz to become the best-selling luxury auto maker in US history. The key to the success of the Lexus is the visceral understanding of the critical relationship between manufacturer, dealership and the customer.
Toyota defined luxury as "Total Ownership Experience" that included a defect free vehicle and great dealer service. The following example exemplifies this belief - the LS 400 (launched in 1989) sold well though at about half the price of competing European luxury brands. A couple of months into the programme, Lexus faced a problem they were dreading and competition was hoping would happen. Two customer complaints about a faulty cruise control glitch left Lexus in a quandary - do they just fix these 2 cars and wait to see whether others surface with a similar problem or issue a recall and let the world know that Lexus engineers were human after all. The decision was simple and they set an example that is still talked about among automotive insiders today.
Lexus recalled every one of the 400 vehicles it sold. While they knew their decision would be a PR nightmare what with competition ready to pounce on every miscue, Lexus realised that this recall provided them with an opportunity to show the world that they were dealing with an entirely new kind of car company, a company that didn't just talk customer satisfaction, but lived it. Lexus owners did not just receive a recall notice, but were also advised that their dealer would pick up the cars from their homes and leave them a loaner car free of charge while the repairs were being made. Every car was returned to the owner washed, detailed and with a full tank of gas. There was also a gift sitting on the driver's seat as thanks for their patience.
This was actually the day Lexus was born and not when it sold its first car.
That to me embodies an organisation that "walks the talk" and eschews inexpensive short-term solutions to a problem in favour of a more costly but permanent fix.
The first interesting thing Toyota did was to take a decision to develop the luxury car from scratch, instead of buying, for example, a BMW. This was in line with the Toyota way of "learning by doing". Next, the chief engineer heading the Lexus was not able to understand how a car can be used as a fashion accessory! On learning about the luxury segment, which was indeed driven by aspirational brands, he decided to build a car which will be better looking than a Benz and still will excel all luxury cars in all basic operational parameters. So when Lexus was out - it exceeded all the other luxury cars in all specifications - like mileage, sturdiness, life etc. Of course it had to be a success…
very apt and enlightening.
Nice post, Ajay.
Take a look at:
How to control the middle of the market
From a customer centric organization, to a market-centric organization..
Cutomer is ALWAYS RIGHT,
View problem with cutomer Centric View point..and you have solution of everything!!
This is a real story that happened between the customer of General Motors and its Customer-Care Executive. Please read on ......in case you have'nt been across with this story.
A complaint was received by the Pontiac Division of General Motors:
‘This is the second time I have written to you, and I don’t blame you for not answering me, because I sounded crazy, but it is a fact that we have a tradition in our family of Ice-Cream for dessert after dinner each night, but the kind of ice cream varies so, every night, after we’ve eaten, the whole family votes on which kind of ice cream we should have and I drive down to the store to get it. It’s also a fact that I recently purchased a new Pontiac and since then my trips to the store have created a problem….
You see, every time I buy a vanilla ice-cream, when I start back from the store my car won’t start. If I get any other kind of ice cream, the car starts just fine. I want you to know I’m serious about this question, no matter how silly it sounds “What is there about a Pontiac that makes it not start when I get vanilla ice cream, and easy to start whenever I get any other kind?” The Pontiac President was understandably skeptical about the letter, but sent an Engineer to check it out anyway.
The latter was surprised to be greeted by a successful, obviously well educated man in a fine neighborhood. He had arranged to meet the man just after dinner time, so the two hopped into the car and drove to the ice cream store. It was vanilla ice cream that night and, sure enough, after they came back to the car, it wouldn’t start.
The Engineer returned for three more nights. The first night, they got chocolate. The car started. The second night, he got strawberry. The car started. The third night he ordered vanilla. The car failed to start.
Now the engineer, being a logical man, refused to believe that this man’s car was allergic to vanilla ice cream. He arranged, therefore, to continue his visits for as long as it took to solve the problem. And toward this end he began to take notes: He jotted down all sorts of data: time of day, type of gas uses, time to drive back and forth etc.
In a short time, he had a clue: the man took less time to buy vanilla than any other flavor. Why? The answer was in the layout of the store. Vanilla, being the most popular flavor, was in a separate case at the front of the store for quick pickup. All the other flavors were kept in the back of the store at a different counter where it took considerably longer to check out the flavor.
Now, the question for the Engineer was why the car wouldn’t start when it took less time. Eureka - Time was now the problem - not the vanilla ice cream!!!! The engineer quickly came up with the answer: “vapor lock”.
It was happening every night; but the extra time taken to get the other flavors allowed the engine to cool down sufficiently to start. When the man got vanilla, the engine was still too hot for the vapor lock to dissipate.
Even crazy looking problems are sometimes real and all problems seem to be simple only when we find the solution, with cool thinking.