M-B gets tough over customer service scores

Lower-ranking dealers must host consultants to improve

Cannon: Focus on consumer experience

Mercedes-Benz USA is taking a hard line with dealers after the brand made little progress in the latest J.D. Power and Associates Customer Service Index.

Despite several dealer training programs in recent years, Mercedes moved up only one spot -- to No. 8 -- in the 2014 Power CSI survey released this month.

"I was disappointed," said Mercedes-Benz USA CEO Steve Cannon. "But we are undeterred. Consumer experience is the No. 1 focus of this organization."

The survey measures customer satisfaction with maintenance and repairs among owners and lessees of 1- to 5-year-old vehicles. Shortly after the results were released, Cannon flew in six of the brand's largest dealers to discuss the issue. They brainstormed a series of programs aimed at improving stores with lower customer experience scores.

The first initiative requires the 170 stores that rank in the bottom half of the company's internal customer service survey to pay for a consulting team to come in for three days, twice a year, to audit processes and determine weaknesses.

Stores in the top half of the internal results -- but not in the top quarter -- will be required to pay for one consulting session.

"We are not going to let people stay average, and we will be very aggressive at asking them to do things," Cannon said. "If you're good, you have nothing to worry about."

Cannon said each session with consultants will cost several thousand dollars but will help dealerships fix their processes.

"When it comes to the customer experience, we mean business, and we will not accept mediocrity," he said.

Cannon said Mercedes-Benz will announce further programs as they are developed.

Mercedes-Benz says it has invested $40 million in 10 programs to improve the customer experience in recent years. Those include a training program attended by 11,000 dealership employees who face customers.

Mercedes-Benz revamped its dealer bonus program last year in an effort to improve customer service. On April 15, it paid out $40 million in bonuses to the top 70 percent of dealerships in its internal customer service measurement. Dealers' performance is measured quarterly, and they do not have to be in the top 70 percent each quarter to earn a bonus.

About 70 of Mercedes' 340 dealerships did not earn bonus money.

"They were out of the money every quarter," Cannon said. "I am OK with that. They will up their game, and it will be financially lucrative for them to pay attention to the customer."

Cannon said the dealerships that earned bonuses included "a nice spread and an almost equal distribution of small, medium and large dealerships."

He said: "We're hoping it would not favor one class over the other, and it hasn't."

You can reach Diana T. Kurylko at dkurylko@autonews.com -- Follow Diana T. on Twitter: @dianakurylko

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