Moving from product to customer centricity, the Mercedes Benz USA story – Interview with Joseph Michelli

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Today’s interview is with Joseph A. Michelli, Chief Experience Officer at The Michelli Experience, an internationally sought-after speaker, best-selling author, and organizational consultant. Joseph joins me today to talk about his new book: Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way, what Mercedes Benz USA did to transform their customer experience, how long it took them and what lessons others can draw from their experience.

This interview follows on from my recent interview – Insights from neuroscience and making change programmes more effective – Interview with Hilary Scarlett – and is number 172 in the series of interviews with authors and business leaders that are doing great things, helping businesses innovate and delivering great service and experience to their customers.

Highlights of my interview with Joseph:

• Joseph has written a number of books about how different brands have tackled becoming more customer centric and his latest is Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way.
• What makes Joseph’s new book interesting is that it is about Mercedes Benz USA, who traditionally have been a very product oriented company and have not been know for delivering a very engaging experience. In fact, before they began their transformation they were ranked 22nd on the JD Power list of customer leaders, just above Mazda.
• Many companies fail in their transformation efforts because they only attempt ‘initiatives’ that don’t ‘yoke’ together. They don’t go all in on their transformation efforts.
• The CEO of Mercedes Benz USA stated publicly that this transformation would be his legacy.
• At the onset of the programme, it was estimated that it would take 4 years to complete the transformation.
• The initiating CEO moved on to a new assignment after 3 years but the incoming CEO decided to leave the programme unchanged.
• When people start seeing programmes that take 4 years to fully implement many start to think that those sort of programmes will cost a lot of money.
• However, Mercedes Benz USA (MBUSA) also committed to make their programme budget neutral. That meant they had to carve out and stop doing things that were not adding value to customers but also to completely rethink the brand from the customer’s perspective rather than taking a more incremental approach.
• In terms of the relationship between Mercedes Benz USA and the global business, Mercedes Benz global has their own initiatives but the level of interest in customer experience varies across geographies. Thus, the US effort, given it is such a mature market, is very much a stand-alone but also leading effort.
• MBUSA’s transformation programme was further complicated by the fact that they moved their corporate headquarters from New York, New Jersey to Atlanta, Georgia mid way through their programme. That resulted in a massive talent hit.
• To manage that and the natural churn that normally takes place in corporate environments they invested in a brand immersion centre and comprehensive leadership development programme to make sure that their programme stayed on track and that they stay focused on their objectives.
• MBUSA’s discipline was that throughout their programme they didn’t get distracted but they stayed focused on the ‘music’.
• Forrester recently released a report that says that 92% of all leadership teams have customer experience as a centrepiece of their strategic planning. The question, however, is how many of these teams maintain that priority with their behaviour.
• Despite a huge number of customer centricity transformation programmes in the US at the moment, the US customer satisfaction index is at a 9-year low.
• The way that MBUSA managed the change in incentive structures between the franchisor and franchisees (dealerships) was that they first worked really hard on selling the vision up-front.
• However, the dealerships were able to negotiate that head office would underwrite a lot of their risk during the transfer from purely sales driven metrics to more customer facing performance metrics.
• The high-level stages of MBUSA’s programme were:
  1. The articulation of why they needed to do this.
  2. Customer journey mapping across the whole customer lifecycle.
  3. Identify metrics that accurately capture the voice of the customer in meaningful ways at all of their high value touch-points.
  4. Finally, the discussion of how they could link performance at those core touch-points via their new customer metrics to a little bit more variable margin.
• Once all of these elements were in place the transformation really took hold.
• MBUSA headquarters were able to take the fear and risk of change away from the dealerships such that they could boldly do what they needed to do without the risk of losing out.
• MBUSA is now tackling two big new issues on their transformation journey:
  1. Traditionally, the automative industry has always centred around VIN numbers i.e. the unique identifier numbers for cars. Now, MBUSA is changing their systems so that rather than focusing on cars they are taking a more customer based approach where their record keeping and focus is focused on the customer and the cars that they own and not on the cars and who owns it.
  2. The connected car, data analytics and proactive messaging about the car or any other area of customer interest.
• Here’s Joseph’s top tips for getting started on your own transformation:
  1. Do a SWOT analysis of where you are at in your customer experience today and what the opportunities look like.
  2. Think big about what your objectives should be, what are the KPIs that support that and how is all of that going to make things better for your customers and your people.
  3. Socialise this throughout the organisation.
  4. Seek out a ‘sherpa’ to help guide you along the way (the RoI involved is very attractive).

About Joseph (taken from his bio on the Michelli Experience)

Joseph A. Michelli, Ph.D., C.S.P., is an internationally sought-after speaker, author, and organizational consultant who transfers his knowledge of exceptional business practices in ways that develop joyful and productive workplaces with a focus on the total customer experience. His insights encourage leaders and frontline workers to grow and invest passionately in all aspects of their lives.

Dr. Michelli is a Wall Street Journal, USA Today, Publishers Weekly, Nielson Bookscan and New York Times #1 bestselling author. His latest book is Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way. Joseph’s other titles include Leading The Starbucks Way: 5 Principles for Connecting with Your Customer, Your Products, and Your People, The Zappos Experience: 5 Principles to Inspire Engage and WOW, Prescription for Excellence: Leadership Lessons for Creating a World-Class Customer Experience from UCLA Health System, The Starbucks Experience: 5 Principles for Turning Ordinary into Extraordinary, The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of The Ritz-Carlton Hotel Company, and When Fish Fly: Lessons for Creating a Vital and Energized Workplace which was co-authored with the owner of the “World Famous” Pike Place Fish Market in Seattle.

Joseph holds the Certified Speaking Professional designation from the National Speakers Association (NSA) and is a member of the Authors Guild. He received his Masters and Doctorate from the University of Southern California. Joseph has won the Asian Brand Excellence Award, is an editorial board member for the Beryl Institute’s Patient Experience Journal (PXJ), and is on the founders council of CustomerExperienceOne. He was named as one of the Top 10 thought leaders in Customer Service by Global Gurus.

Having journeyed with a close family member through a six year battle with breast cancer, Dr. Michelli is committed to social causes associated with curing cancer as well as abating world hunger.

Grab a copy of Joseph’s new book (Driven to Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way), check out The Michelli Experience, connect with Joseph on LinkedIn and say Hi on Twitter @josephmichelli.

Photo Credit: Teymur Visuals via Compfight cc