Ritz-Carlton Vs. Mercedes: My Lessons From Testing Customer Experience Experts
I read two Joseph A. Michelli books for my research last year: Driven To Delight: Delivering World-Class Customer Experience the Mercedes-Benz Way and The New Gold Standard: 5 Leadership Principles for Creating a Legendary Customer Experience Courtesy of the Ritz-Carlton Hotel Company. I wanted to read these well-known books on customer service and customer experience excellence with an eye toward operations. How did these companies pivot the way they worked in order to put the customer at the center of everything? Answering this question was my primary objective in two of my own reports: “Operating A Customer-Obsessed Enterprise” and “How To Build Your Company’s Customer Obsession Strategy” (going live this week). Both books had excellent best practices from “sharing wow stories” in daily standup meetings across the enterprise at Ritz-Carlton to “modeling out the value of employee engagement on car sales” at Mercedes-Benz.
Of course, I wanted to see what actual customer value came from the efforts these books described. So I did a little secret shopping! Last year was my parents’ 50th wedding anniversary, so I set up some really nice gifts (if I do say so myself) for them that would test the experiences of Ritz-Carlton and Mercedes without my research-analyst skew interfering. Here are my conclusions:
*Ritz-Carlton lived up to its gold standard. When I reserved a place at the Lake Tahoe Ritz for my parents, the reservations agent asked me one time if they were celebrating a special occasion. Upon arrival, they were greeted by name, with a champagne toast for their anniversary and chocolates in their room. They got a room upgrade and had dinner and events booked for them both inside and outside of the hotel based on interests they shared at check-in (golf, shopping, seafood). Staff let me know when my folks arrived and departed so that I knew they were safe and enjoying themselves. In the end, my parents had such a good time that they started talking about buying a Ritz apartment so that they could have the “Ritz experience” over and over again.
*Mercedes dropped the ball. The bigger anniversary gift was a three-year lease of a GLA, the small SUV from M-B. I negotiated a screaming deal on this car with a dealership near my parents and then followed their guidance about how to lease the car as a gift. We spent 7.5 hours (!!) at the dealership while they worked through our paperwork. They offered only potato chips to eat, and that was after I asked for food (we had not eaten lunch and were afraid to leave for supper to miss our “window”). They goofed spellings and phone numbers on the paperwork, which delayed the process. They dismissed my blatant requests to “delight us.” And maybe the biggest gaffe: They never seemed to empathize with our hunger, fatigue, and disappointment. Our salesman even said, “Well, this is my day off. I’m here just for you, and I’m tired, too.” When we finally finished and were ready to drive off in the new car, the salesman that I had worked with on the deal SHOOK MY DAD’S HAND, even though I was his customer.
My intention here isn’t to shame Mercedes-Benz (although it does feel liberating to share this difficult experience!). I know that customer obsession is hard work: Just 15% of enterprise firms are customer-obsessed today. My goal was to see if the promise of these excellent customer experiences was real and to see if I could identify the factors that made or broke them. My take:
- Expectations matter. In both cases here, my expectations were set by books showcasing these companies as exemplary. But M-B could have reset my expectations and helped its case at any time by helping me know what to expect when I arrived at the dealership, telling me to bring my own sandwich, and offering a gauge of how much time to plan for so that we all planned accordingly. Ideally, you CAN be exemplary. But if you can’t, help customers be comfortable within the constraints that you can manage well. Before Delta Air Lines had mastered its luggage tracking app and alert system, it deliberately put luggage in carousels far away from its gates. It found that people hated waiting at the carousel. A long walk to the carousel gave the time it needed to get the luggage out without making people feel like they were standing around delayed.
- Consistency derails. I’ve no doubt that customer obsession matters to M-B at the corporate level. And I believe in all the surprise and delight stories featured in Michelli’s book. But for some reason, that experience of delight just didn’t happen at my dealership on the afternoon that I was there. Jim and Pete Nordstrom would say the way to create long-term, consistent customer obsession is to establish values and hire people who share them, rather than trying to metric people against rules or practices.
- Misaligned value for customer will disappoint. With both the Ritz and the M-B gifts, I was buying the thrill of the gift. I *wanted* the gasps and hugs and jumping up and down that you see on the TV commercials when a big gift is well received. I cared more about experiential value than functional. (Check out my research with Maxie Schmidt on this.) And when I told both companies to delight my parents, I wanted to feel that they were. In the end, from M-B, we got a great-quality car that is safe and handles great in the snow — but only after being frustrated, uncomfortable, and a little offended. This M-B dealership delivered the wrong type of value to me. It banked on functional value being enough to make me feel I was getting my money’s worth when what I cared about was experiential value. Penske’s research figured this out for its customers and invested in the rental experience and truck pickup instead of just adding features to its trucks.
What have been the make-or-breaks for your business as you work to mature with customer obsession? What have you seen other firms do to manage expectations, create consistency, and align what they offer with what their customers value?