May 27, 2008

The Car Purchase: Recovering From Bad Service

Your most unhappy customers are your greatest source of learning. --- Bill Gates

Statistics suggest that when customers complain, business owners and managers ought to get excited about it. The complaining customer represents a huge opportunity for more business. --- Zig Ziglar

We can reduce mistakes but not prevent them. Since perfection is unattainable, quick recovery is the best strategy. This can increase your revenue thanks to reciprocity, the first universal principal of influence.

Here's an example with a happy ending: buying a car. Things when bad on the delivery day
  • delivery 5.5 hours late
  • obvious paperwork errors
  • extra 750km on the odometer
I kept being told the car would be ready in 15 minutes. In total, I waited in the dealership over 4 hours.

What Happened
The promised delivery time was 2pm. I arrived around 3:45pm, just after returning my leased BMW nearby. My new car, a Mercedes E-Class, was not ready. Neither was the paperwork, even though I'd answered the only outstanding question the day before to save time.

I was told the car and paperwork would be ready in 15-30 minutes. While waiting, I could enjoy a cappuccino. That sounded fine. But delay followed delay. Each time I was told the delay would only be 15-30 minutes. I left at 7:53pm, which ruined our evening plans --- a dinner to celebrate our son's report card.

The Guilty Parties
There were three guilty parties

The car was not ready on time. The waxing was underway 4.5 hours after the promised delivery time. The paperwork was not ready and needed three sets of revisions.

Why the delay? The dealership was very busy and staff were working 12 hour days. They were trying to do their best. So what? Customers don't care.
Yoda: Try not. Do ... or do not. There is no try.
The advisor
  • didn't mention the extra 750km on the odometer (2,500 km instead of 1,750 km) or reduce the price accordingly (I buy demonstrators when possible)
  • didn't give a proper estimate of the revised delivery time or advance notification of the delay
  • didn't check the paperwork for errors which would have slipped in if I didn't notice
  • didn't explain the features (try using a navigation system or tuning the radio these days) even though I asked several times while waiting
  • left me to service other customers
  • gave me the keys in a dimly lit garage :(
My biggest fear was reliability, which has been a problem for Mercedes. A friend with an earlier E-Class had various shocking problems including squeaky brakes and lights burning out. In Canada, sales have only rebounded recently after 3 years of declines. In contrast, BMW sales have grown for 17 consecutive years. Lexus sales doubled since 2002.

So I was very sensitive to flaws. The next day, I inserted my first CD and it got stuck and needed to be pushed in with another CD. The parking guidance system beeps to signal obstructions that aren't there. The navigation system gives poor directions compared to my 2006 TomTom with 2007 maps (perhaps the DVD --- dated 2006 --- is outdated).

Corrective Action
The advisor did followup with me --- which no previous advisor did. However, nothing happened.
Our relationship with you is of the utmost importance to us
--- covering letter, Mercedes-Benz Purchase Experience Survey
I got action after completing a satisfaction survey which was to "be reviewed carefully and acted upon". I specifically wrote that I no longer wanted to deal with that advisor or dealership. Guess who called? The manager of that dealership. I reiterated my desire to deal with someone else. The regional vice president called and we spoke for an hour on a range of issues. This made me feel much better because he listened and made me feel I was being listened to and that my concerns had some validity. I felt appreciated. This was more important than I expected. Immediately afterwards, I started feeling much better about the car since the Mercedes commitment to client satisfaction is more than words.

I was encouraged to follow protocol by returning to the original dealership. Since dealing with corporate-owned stores had been a major selling point I asked to go to another location. I was advised to go to the downtown Toronto location, their Canadian flagship (once renovations finish this summer). I agreed.

Here's what's to happen
  • discount to compensate for the extra kilometres
  • servicing the identified concerns
  • redelivery of the vehicle, including 1-2 hours to explain the features in details
I've since spoken to the downtown service manager who is coordinating and anticipate an excellent experience. That's why I'm posting now before the actual outcome.

The Wasted Hours
I got an apology for the hours lost waiting for delivery. Is that "fair"? Perhaps. They are doing rework to erase the bad day. That seems reasonable.

Lessons Learned
Bad news spreads fast and leaves a deeper impression. I'd rather be what Zig Ziglar calls a "good finder". To be fair to Mercedes-Benz, I didn't tell anyone about this unpleasant experience. I'm sharing it now because of the favourable outcome. Here are three lessons
  1. Keep your promises.
  2. If you break rule 1, give realistic estimates.
  3. Find someone who cares and the rest will work out
To err is human. To recover is divine.


May 21, 2008

Zig Ziglar's Inspire Podcast: Motivating Messages

You can get everything in life you want if you will just help enough other people get what they want.

When you are tough on yourself, life is going to be infinitely easier on you.

When you do what you ought to do, when you ought to do it, the day will come when you will be able to do what you want to do when you want to do it.

The depth of your sincerity is more important than the height of your knowledge.

Many marriages would be better if the husband and the wife clearly understood that they are on the same side.

These quotes are from Zig Ziglar who now has free podcasts at Listen online or download them.

Who Is Zig?
Zig is arguably the funniest motivational speaker with meaningful content. Plenty on selling. He communicates with humour in a style like Bill Cosby --- which also means the whole family can listen. He has a unique accent. Zig, who is now over 80, makes his messages memorable. There's a brief biography on Wikipedia.

The Content
You'll hear excerpts from various recordings Zig made over the decades. The clips run three to ten minutes long, which makes them long enough to be useful. Here are two examples of sales techniques
Zig's religious beliefs might get in the way of the message. Listen anyway. You don't have to agree with everything to benefit.
People often say that motivation doesn't last. Well, neither does bathing … that's why we recommend it daily. — Zig Ziglar
Thanks to podcasts, you can get motivated whenever you want. I'm glad I stumbled over them. Now it's your turn.


May 13, 2008

Can We Tell Who Buys What?

Tip: read getting what we want by distorting our spending on Riscario Insider, which describes research into the new consumer as described in Treasure Hunt by Michael Silverstein of the Boston Consulting Group. Today's consumer trades up in a few categories (can't buy better) and trades down in many (can't buy cheaper). The middle market is toughest: you aren't the best and you aren't the cheapest.

Our clients are unique in what they're willing to spend their money on. They spend more in some categories and less in others. Here are examples:
  • movies: some go to movie theatres, some buy movies on DVD or Blu-Ray, some rent, some watch for free on commercial tv
  • dining out: some love this while others think what the same food would cost at home (e.g., $15 can buy pizza for one person at a restaurant but for a whole family --- assuming no teenagers --- at home)
  • vacations: some go on extravagant vacations while others relax at home
  • food: some pay extra for organic while others buy the cheapest
  • family: (grand)parents may spend extra on their (grand)children and save on themselves
More Variety
Business gets tougher when we can't tell what a client wants. An owner of a Mr. Sub franchise reminded me that in the beginning there was only one type of bread and four types of subs. Now there's much more choice due to competition. Order a cream cheese bagel at Tim Horton's and slow down the line while you select the type of bagel and type of cream cheese.

More than choice, consumers want value. No one wants to overpay for anything, but that doesn't mean the cheapest price for those trading up. When reducing a client's financial risks, intangible factors matter. Your expertise matters but few charge separately for wisdom.

If choice can overwhelm when ordering a submarine sandwich, what of products like life insurance? There's probably too much choice already. Our fact finding helps narrow down the solutions but then our biases can get in the way of what we offer the client. For example, a leveraging strategy could be inside the client's comfort zone but not presented because it falls outside yours.


May 4, 2008

CALU 2008 - Sharing The Wisdom

70% of CALU members (Conference for Advanced Life Underwriting) attended the 17th annual event in Ottawa from April 27-30, 2008. The chair, Graham Carter, selected the theme of Sharing The Wisdom. We did. And more.

They're There
I still can't believe the calibre of government officials who chose to address us
  • Monday morning: Deputy Liberal Leader Michael Ignatieff, who spoke impromptu and took questions
  • Monday lunch: Governor of the Bank of Canada Mark Carney, who flew in after a morning meeting with bankers in Toronto, and also took questions
  • Monday afternoon: Prime Minister Stephen Harper, who rearranged his schedule to speak at 2pm
  • Tuesday morning: Finance Minister Jim Flaherty, who also attended the evening reception for Senators and Members of Parliament
In addition, a senior CRA official attended a roundtable discussion. He jokingly thanked CALU for keeping his department in business by asking ongoing questions. We also saw saw live recordings of the Senate hearings on Creditor Protection in which CALU representatives were thanked for helping Canadians with their constructive input.

Stephen Harper
Stephen Harper started his address with "My friends at CALU" and explained why he used those words. He's addressed CALU six times, the last three as Prime Minister. He called CALU unique because of political involvement and civic benefits.

Here are the parts of the conference which stood out:
  • best answers to audience questions: Michael Ignatieff
  • most entertaining: Mike Mandel on the power of words
  • most actuarial: Moshe Milevski, who spoke about longevity risk, the peril of outliving your savings
  • most thought-provoking: Dan Hill (not the Canadian singer) on recent research into the role of emotions in selling
  • most elusive goal: figuring out a fair price for buying/selling a block of business
Since so much takes place over the four days, the conference becomes a blur. You remember how good you felt, the people you met and a few tidbits of wisdom. I took notes which I'll turn into text with Dragon speech recognition for future posts.