M-B dealers get $2,500 to coddle S-class buyers

LOS ANGELES -- Mercedes-Benz USA is providing dealers as much as $2,500 to please each buyer of the redesigned S class.

Dealers have marching orders to quickly fix car problems, no matter how minor, without factory preapproval, said Steve Cannon, CEO of Mercedes-Benz USA. The money also can be used on perks, such as free dinners.

The new program, called MB Select, was launched when the redesigned 2014 S-class sedan went on sale in September in the United States. Mercedes wants to bolster its reputation for customer care.

Mercedes has extended the program to the new CLA, which went on sale in October, giving dealers as much as $1,000 per buyer of the front-wheel-drive sedan. Cannon said Mercedes will add other models to MB Select but was not specific.

Mercedes has lagged its competition in customer service. It ranked ninth of 11 luxury brands in the 2013 J.D. Power and Associates Customer Service Index Study, which measures satisfaction with dealership service operations.

The company told dealers to spend the money as they see fit, with "no questions asked."

For instance, the check engine light came on as the owner of a new S class drove out of a Virginia dealership. The problem was solved with a simple software flash. But the dealer apologized and bought the customer a gift card for the best restaurant in town.

"The problem was fixed immediately, but we said that does not happen with the S class, the best car in the world. Dinner is on us," Cannon said during an interview last month at the Los Angeles Auto Show. "That customer was so thrilled he came in the next day and bought an SL off the showroom floor."

Another customer complained to his dealer that the compartment over the visor that holds sunglasses wasn't big enough for his designer shades. "So we bought him a pair of Ray-Ban sunglasses that fit because of their shape," Cannon said.

It cost the dealership $150, "and he was so delighted," Cannon said.

If a customer gets a couple of dings in his S class from a cart in the grocery store parking lot, a dealership could take them out for free, he said.

Cannon said the program is the result of a challenge he posed six months ago to the brand's customer service organization. "If we are communicating this is the best car in the world, what do we do if something goes wrong? It could be warranty or not."

In addition, there is a daily meeting with customer service and product management to discuss calls made to the customer call center.

Employees also monitor social media for discussions about S-class problems and contact owners to offer resolutions, he said.

The MB Select program will cost the company several million dollars, Cannon said, without being specific. In 2012, Mercedes sold 11,794 S-class units in the United States. If Mercedes had paid $2,500 on each of those cars, the tab would have been $29.5 million. But Mercedes does not expect to pay the full MB Select allotment on each vehicle.

The base price of a 2014 S550 is $93,825, including shipping.

The CLA, the brand's new entry, starts at $30,825, including shipping. About 80 percent of buyers are conquests and the biggest number came from BMW, followed by Toyota, Honda and Volkswagen, Cannon said.

If these customers get a level of care at the dealership they are not used to, "then we are going to cement them for life," he said.

Cannon added that some top Mercedes dealers have decided to offer similar good will on other vehicles, and "they are starting to do that out of their own pocket."

Joseph Agresta, owner of Benzel-Busch Motor Car Corp. in Englewood, N.J., and chairman of the Mercedes-Benz Dealer Board, applauded the program.

He said, "This was Mercedes-Benz putting their money where their mouth is about customer service and empowering people at the front line both at their organization and the dealer network to make quick decisions and to try to help customers out in difficult situations with a new car."