Lexus, Ritz-Carlton and the Power of Customer Connections

Posted by Bill - November 27th, 2007

Next week I’ll be in Coconut Grove, Florida, hosting a symposium on how companies can make deeper and more enduring connections with their customers. One of the stars of the show will be John Fleming, a principal of Gallup, Inc. and chief scientist for the firm’s customer-engagement practice. John is also the coauthor of an important new book, called Human Sigma, that sets out Gallup’s in-depth research on companies and their relationships with customers.

My goal here is not to promote the symposium—although, with in-depth presentations from senior executives at Lexus, JetBlue, Ritz-Carlton, and Wachovia, it promises to be a fascinating event. My goal is to underscore the new logic of competition in a world defined by overcapacity, oversupply, and utter sensory overload. Success today, as John Fleming and others have documented, is not just about price, quality, and features—selling pure economic value. It is about passion, energy, identity—sharing your values with customers.

A case in point is Lexus, which continues to thrive in the hyper-competitive North American auto market. Of course Lexus makes handsome, reliable, high-performance cars. But the real genius of Lexus has been its capacity to enhance the luxury experience above and beyond the automobiles themselves.

How does Lexus make itself a more memorable car company? By searching for ideas far beyond the realm of automobiles. For example, Lexus was struck by the excitement generated in Apple’s retail stores by its Genius Bars—free hangouts where customers with all sorts of questions (some quite advanced, some downright dumb) could get answers from smart, friendly, highly engaged employees. So Lexus put a version of the Genius Bars in its dealer showrooms. Lexus also went to school on the luxury experience at the Ritz-Carlton, going so far as to send 500 dealers and general managers to spend three days at the hotel that has come to define luxury.

The result? As reported in the Wall Street Journal, all sorts of little touches that add up to a big impression—from fresh flowers in the showroom to marble floors in the bathrooms to bottled water and chocolates in the cupholders when customers pick up their cars from the service department. Lexus understands that it’s not just in the business of selling great cars. It’s in the business of making deep and enduring connections with customers who have come to expect greatness from Lexus.

What are you doing to make your company more memorable to do business with? How are you engaging with customers in ways that separate you from the crowd?

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