In 1992, the Ritz-Carlton chain won the Baldrige Quality Award for its excellence in customer service. Their idea was to write all customer preferences down, to feed them in a database and to henceforth deliver as expected.
Twenty years ago, I pointed this out to Volkswagen. I was VW’s customer service guru at the time and thought it was a swell idea. Volkswagen enthusiastically adopted the program. It was a failure, what do you expect from a company that retains me as a guru. Also, VW did not want to spend the money on a database. Instead, the Ritz-Carlton ended up running the hotel at Volkswagen’s Autostadt, and giving the occasional seminar to car dealers who still roll their eyes over the “gottverdammte Unsinn.”
Twenty years later, “Ford draws on luxury hotel experience for Lincoln overhaul,” writes Reuters, reporting that “in the plan to overhaul its luxury Lincoln brand, Ford Motor Co is embarking on a new approach, leaving behind the routine ideas of the auto industry and instead taking cues from the likes of high-end boutique hotels.”
Before that happens, Ford is reducing its dealer network to boutique size. Ford announced that it had reduced dealerships of its Lincoln luxury lineup to 325 from about 500.in the top 130 markets. That’s not all dealers, mind you. NASDAQ reminds us:
“Ford began to expand its luxury Lincoln line-up at the cost of its Mercury line-up from late 2010. The company has suspended production of its Mercury branded vehicles in the fourth quarter of 2010 and started diverting resources from the brand towards its core Ford brand besides enhancing the Lincoln brand.
At that time, Ford had announced to eliminate a third of its 1,200 Lincoln dealers in the U.S., mostly in urban areas. The company has 700 dealerships in rural areas.
The automaker has asked the Lincoln dealers to upgrade their showrooms and services in order to meet the rigorous competitive standards. Dealers have revealed that the renovations would cost about $2 million per showroom.”
Actually, at that time Ford believed that only some 300 Lincoln dealers have a fighting chance. Reuters reported in October of 2010:
“Only about a quarter of Ford’s 1,187 Lincoln dealers now have the kinds of facilities that the automaker believes it needs to compete with luxury-market competitors.”
The call to investments met with lukewarm success. “More than half of all Lincoln dealers in the top 130 U.S. markets have committed to upgrade their facilities, creating a new sales and service experience for future Lincoln owners,” Ford announces today in a press release.
Careful, we are talking about the top markets again. Nobody even mentions the hordes of Lincoln dealers in the sticks anymore. They appear to be written off.
Also, out of the “more than half of all Lincoln dealers in the top 130 U.S. markets” only “seventy-five dealers in cities including New York, Los Angeles, Dallas, Philadelphia, Atlanta and Chicago already have completed new facilities or major facility renovations” says the press release. We are finally approaching manageable numbers.
From my days as a guru I remember what happens to dealers who don’t follow a manufacturer’s call to pour concrete according to the latest Corporate Identity guidelines: Their bonus payments dry up, the bank wants to see cash, car haulers dump duds on the lots and bring the sellers to the other guy. Sooner or later, all dealers will be up to standard – those who balked, died.
In the meantime, Ford is contemplating how to bring that high-end boutique hotel style to its surviving Lincoln dealers. The first ideas appear a bit pedestrian. Reuters says:
“Ford is considering creating four or five standard “rituals” that can be employed by Lincoln dealers throughout the country. One example might be to ask each salesperson to provide potential customers with their personal cell phone number.”
Wow. Just wow.