Wednesday, February 11, 2015

Luxury Owners; No, They Just Seem To Be Difficult
by David P. Carlisle

We conduct a lot of owner survey research where people tell us about themselves by checking certain boxes. “How satisfied are you with Brand-X’s dealer experience?” They check one of five boxes, ranging from “Very Dissatisfied” to “Very Satisfied.” “Why are you dissatisfied?” They check one to three things off a list. We tabulate the results and profile cluster of dealers. But, still we wonder. Toyota teaches the “Five Why’s” as part of their Lean training. Ask “why” five times and you will usually get at what’s really going on. You can’t do that in a static survey. That’s why we have a focus group facility in our offices.


I recently moderated two very different customer groups. One was a group of typical Volvo owners. The other group was from BMW, Mercedes-Benz, Lexus, and Audi. Day and night. The Volvo group was composed of people who had made fairly clear lifestyle choices with safety as their core value.
  1. Why do you own a Volvo? I like it.
  2. Why do you like it? It drives well.
  3. What about it “drives well"? You know, it is the whole experience.
  4. Is there any part of the experience that sets Volvo apart? Sure.
  5. What is it? It is the safest car on the road and I value myself and my family.
Ok, it doesn’t come out exactly like that. But, you always will get to “safety” within the Five Why’s.


With “safety” as a unique core value, Volvo owners are pretty much OK with what’s offered up in the ownership experience. Do they mind waiting for service in the waiting room? No problem. Do they expect a loaner car or alternative transportation? Well, that stuff would be nice (and they do receive it), but they don’t sit and stew over it if it isn’t perfect. They chose Volvo. They get pretty much everything other luxury vehicle owners get, but they do not have the same feeling of entitlement or value dissonance.


That was “day.”


Time Out

Well, the Volvo Focus Group looked pretty good, … but it did not foot to the numbers. We expected higher-than-normal levels of customer retention from Volvo, based on what we heard in the Focus Groups. So, we decided to listen to a different “luxury” owner group that just consisted of BMW, Mercedes, and Audi owners.


Now to “night.”


I sat down with the other “luxury” owner group and frankly expected more from them. Each had spent a lot of money for their brand choice, and brand statement. They were entitled, and nobody’s fools. The following isn’t a direct transcription, but it captures the essence of this group.
  1. What are your expectations for alternative transportation? Just get me out of there as fast as possible. I am too busy to hang around the waiting room of my dealer.
  2. What are your expectations for the waiting room at the dealer? I don’t care about it; I never want to be stuck there.
  3. What do you think about going to your dealer for service outside warranty? You think I’m nuts? I never go back because their charges are exorbitant. I take my car to “my guy” in my town and I trust him.
  4. Why do you think the costs are exorbitant? Just look all around you at one of those ‘palaces.’ You know who’s paying for it? Me! Well, not “me” because I would never consider using them outside warranty.
  5. But, what if you were treated differently? What if the service advisor was also the technician and there was no handoff? I don’t care about that. Hmm. OK, it would be better. But, I’m not going to pay for those palaces!
Time Out

What’s the logic that connects happy Volvo owners with lower service retention to unhappy upper-luxury owners with higher service retention? I suspect that the logic tether that connects all this together is affordability. Volvo owners might stretch more to purchase their vehicles, justifying the stretch not as a brand statement, but as a precious investment in safety. Money is precious to this group and they tend to shop more outside the dealer to stretch their service dollar. Upper-luxury owners, especially those where the volume is at the bottom of the brand chain, love to talk about how much they pay for service, how it is simply outrageous, and how they won’t stand for it after warranty. Those at the top of the brand-chain simply don’t talk much about this sort of stuff … and are not likely candidates for a focus group. But, for all of them, time is more valuable than money. So, they tend to go back more often to their dealer for service simply because it is easiest and quickest.


Bottom Line


If one had struggled to create a beautiful architectural service solution, struggled to hire professional staff, struggled to have a perfect waiting area, and struggled to offer brilliant alternative transportation, … maybe even struggled to go beyond what you expect is expected … and all you heard was this whining … what would you conclude? You might conclude that these customers were difficult. Brats. And, you would be wrong. They just don’t value much the stuff you think they value, and are offering. For them, increasing service retention takes a different kind of currency. For Volvo customers, the “currency” for this barter arrangement seems to be perceived “affordability.” For the upper-luxury customer the realm’s coin seems to be “time.” It might just be that simple.


One Last Thought


I do not think it is uncommon to build a world that customers don’t want to live in. Ex-K-Mart shoppers don’t think much about all the work that went into their K-Mart shopping experience. They just don’t value it or like it. So, they go to Wal-Mart or Target where they get what they value. Lesson? Understand what your customers value and give it to them. Don’t dress up what you value and think it represents a fundamental truth.


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