Mercedes-Benz USA is pushing its U.S. dealers to improve their service departments. The automaker is correct to remedy a weakness in the overall experience of its U.S. customers by asking more from its dealerships and helping them achieve it.
The latest effort was triggered by the J.D. Power 2014 U.S. Customer Service Index Study. Mercedes was ranked eighth, below average among 12 luxury brands. The accompanying three-star notation that Power defines as "about average" service is out of step for a brand that topped U.S. luxury auto sales last year.
So Mercedes kept its carrot -- $40 million in service performance bonuses shared by about 70 percent of its 340 dealerships -- but added a bit of stick. Most dealerships must pay for an annual visit by a team of consultants to help them improve. But dealerships in the bottom half of the company's internal customer service survey must finance a second visit.
Mercedes recognizes that customers' experiences shape how they feel about the brand. It is right to engage and incentivize its dealers to step up their game. High standards pay off. So does rewarding dealerships that meet those standards.