BMW Customer Magazine Article
Feature article on customer service expert and author Karl Albrecht,
written for BMW Nucleus magazine by Richard Stewart.
Guru of Customer Service
Dr. Karl Albrecht is America's guru of customer service. His
best-selling book Service America! (1985, Dow Jones-Irwin) is
acclaimed as the shot that started a service revolution in the U.S.
business world. It's considered essential reading for anyone who
deals with customers and wants to develop a competitive
advantage in the marketplace. Chairman of the TQS :(Total
Quality Service) Group and author of 16 books, including Service
Within (1990) and At America's Service (1988), Karl has made a
career of consulting with businesses interested in improving
customer service quality. The automobile industry, he feels, could
benefit perhaps more than most by adopting a customer-oriented
focus. He shared his ideas on the subject with Nucleus recently at
his San Diego headquarters.
"Many people put off buying a car because of the psychological
trauma they expect to have to go through. Experience tells them
they'll probably be intimidated or treated as less than autonomous
— like someone is trying to control their behavior. They'll become
reactive. The psychological term for it is counter-dependent.
Children go through it. Rebellion. I don't want you pushing me
into deciding what car I'm going to live with for the next three,
four, five years.
"In the early stages of car shopping, people go through a sort of
research phase — gathering information, trying to make a decision.
It's a time when their thought processes and emotional state are
fragile. But the automobile industry has never respected that
fragility. The idea is that when the guy walks in the door, I want
to grab him and make sure he buys my car. So you start to do
battle. The customer either votes with his feet, by leaving, or ends
up duking it out over price. And he doesn't even want to get into
a price battle.
"Because of these experiences, it can be quite a while from the
time a person decides the old car's got to go until the time he
actually buys a new one. I wonder how much of a latent market
has been pushed downstream by three months or six months or
more because so many people find the dealership experience
unpleasant. And what's the dollar value of that delayed business
if it could be captured earlier?"
Avoid Pressuring Customer
to Make a Decision Now
"What does the customer want? He wants the respect of his
autonomy, a willingness to support his decision process without
undue duress so that he can come to a decision that's appropriate
for him. He wants patience and the willingness of the salesperson
to wait to sell him that car. He wants a relationship that's personal
and high-value, from the first contact all the way through. Every
bit of research that's ever been done can tell you that.
"So why don't all dealerships use this relationship-oriented
kind of selling? Very simply, they don't have the nerve to let the
customer walk out the door. Many dealers have give up hope of
any differentiation between their dealership and others. They feel
their only chances is to be like a spider: 'When some little insect
comes into our net, we'd better be on him and not let him get
out the door, because if he gets out, we'll never see him again.'
And why won't you see him again? Because he doesn't want to
be brutalized and pressured and intimidated. So it becomes self-
reinforcing. We become the architects of our own failure.
"The person who buys a BMW typically is educated, fairly
self-possessed, a reasonably aggressive person, not at all
indecisive in most cases — not a dim bulb. If he comes in
looking for solid information, give him just that. But many
salespeople won't accept the idea that the customer just wants
information. They assume he wants persuasion. If a customer
comes into the showroom and is indecisive, it's my job to give
him the options and push him toward a decision. That can
backfire. If we disrespect that person's need for information
and understanding during that fragile research stage and think
that we're going to make up his mind for him, we're approaching
that 'Moment of Truth' wrong. Instead, we need to become a
part of his car-education process, then pull back and give him
some room to make a decision."
Should Be High Quality
"A BMW is a lifestyle product, a physical symbol of one's
success and one's feelings about himself and his own life.
Shouldn't everything that customer experiences in buying that
car express the same thing? Imagine this scenario: A customer
walks through the showroom door but no salesperson has any
contact with him until he is introduced by a receptionist, a
young lady, non-threatening. She greets him and invites him
to spend as much time as he'd like browsing. She says that if
at any point he'd like to talk to somebody who can answer
his questions in depth, she'll arrange that. The salesperson
doesn't become involved until the customer is ready to talk.
This is a more appropriate approach to that 'Moment of
"We're not always thinking in terms of a whole of the
parts, but the customer is. Customers evaluate what happens
to them in totality. The product is not just the car or any
one thing that anyone in the dealership does, but the whole
sequence of Moments of Truth that the customer goes
through from end to end — what I call the 'Cycle of Service.'
There needs to be a shared sense of ownership of this cycle
by everyone in the dealership.
"Regular meetings to discuss how you're doing at improving
customer service quality and how you're perceived by customers
are useful. If a customer has been dissatisfied with something,
talk about it. The intent shouldn't be to punish anybody when
things go wrong, but to analyze what you have trouble with.
The salesperson is more likely than anybody else to be the
customer's advocate. He sort of owns the customer, so to
speak. Since he wants to sell him another car and get referrals
from him, he has a need to look after that customer's state of
mind. He could become a kind of de facto team leader to some
extent, the main contact with the customer."
Damage Control: Often
A Simple Apology Will Do
"Damage control or recovery is needed when somebody mucks
it up for a customer. One person who really treats the person
right at that Moment of Truth can begin to make amends to
some extent. But it's even better if the whole organization can
make some amends. It may be worthwhile for somebody in
management to make a personal apology. I'm convinced that
apologizing is a lost art in American business. If a hotel loses
your reservation, they'll find you a room. But that's it. Nobody
says, 'I'm sorry.' I think we've all been given the idea that when
you apologize to somebody, you're demeaning yourself and
that people don't want to see that.
"When you think about it, there's a way to apologize, equal
to equal, and it's seen as a highly mature act by the person
receiving the apology: 'I found out that we really messed you
around on this, and I want you to know that that's not the way
we want to treat our customers. I don't want you to feel that
you've been done wrong.' Nobody has to come crawling or
give away the company. Sometimes an apology is all a person
needs. There's something about apologizing that we don't do
"Also, when a person is wronged, he wants some sort of
added-value act of atonement. Go beyond making it the way
it should have been in the first place and say, 'Look, please
accept this or that as a gesture; the next time you come in
I'm going to personally look after your car.' It doesn't have
to be enormous, but something that adds value for a customer."
Comes By Adding Value
"How do you develop an advantage over the competition and
get a bigger piece of the other guy's pie — especially when the
product is the same or similar? If all dealerships are seen as
about equal in the customers' eyes, and if we can somehow
add value to that relationship, then over a period of time it's
going to work in our favor. Banks could benefit from this
approach. They don't very often get new customers by winning
them. Customers are driven into their arms by other banks that
aggravate them so much they take their business someplace else.
"If you concentrate on not alienating customers, you can
accumlate market share just by having the other guys drive
them to you. It's really a matter of managing the customers'
total experience. But the whole dealership has to function as a
team. Do customers have to go from one person to another
trying to get assistance? As small as a dealership is, it can still
get pretty bureaucratic, with little fiefdoms and people arguing
back and forth: 'That's not my responsibility. I'm not going to
take that on my cost center.' Ultimately, the customer sees it
as a pretty crappy operation. Teamwork and a real desire to
take care of that customer are needed.
"The objective is not to make the customer happy. It's to
win and keep his business. And you've got to make it a habit
to do everything with that in mind. Maybe you start thinking
about your systems and your methods and policies. Why do
we have that policy? Why do we refuse to do that when a
customer asks for it — when it turns out it won't cost us a
nickel, but it just doesn't seem right? And you begin to
review all the rules of the operation to become more
customer-focused. I have very little doubt but that that's
going to have an impact on sales. It will draw a market
share from other dealerships. And it will start to get people
thinking — and talking — differently about you and about