Last year Mercedes-Benz dangled a big carrot: more money payable in early 2014 if dealers upped their customer service.
Most have responded because the top performing 70 percent will get a bonus payment, said Joseph Agresta Jr., president of Benzel-Busch Motor Car Corp. in Englewood, N.J., and chairman of the Mercedes-Benz Dealer Board.
The new customer experience leadership bonus "was intended to get dealers to focus throughout the sale and service, through every touch point, and to get dealers to improve processes and training rather than think about the score," Agresta said.
Mercedes-Benz USA will spend $50 million annually to reward dealers who achieve the highest scores in a new customer satisfaction survey. Dealerships that rank in the top 70 percent of the survey will receive a bonus that could push their profit margin from the former maximum of 13.5 percent to 14.1 percent, adding about $300 for each vehicle sold.
Mercedes-Benz looked at other luxury businesses, including retail and travel, and took tips from the best in tailoring its program, he said. The initial results show improvement. The American Customer Satisfaction Index produced at the University of Michigan rank-ed Mercedes-Benz No. 1 in the industry, the highest score ever for the brand and up from No. 9 a year earlier, he said.
Dealers who score in the lower 30 percent won't get a bonus, but they won't lose money either, Agresta said. Like all of Mercedes' other U.S. dealers, they benefited from the brand's 13 percent increase in U.S. sales last year, he said.
But, Agresta added, "I think everybody is trying to get into that bonus structure and to stay there."
Dealers also benefited from the launch of new vehicles in 2013, including the new CLA, priced at just under $30,000 before shipping, and the redesigned S-class flagship. The S class has so much new semi-autonomous and safety equipment, Agresta said, that some dealerships -- including his -- are offering to "go out to their home and office to explain some of the features."