I stumbled on this image while looking for something appropriate for a previous post, and it was simply too good not to post. As for the story behind the photo, it comes from a 2005 Customer Service program run out of Lexus UK:

Lexus aftersales consultants are being given a taste of the luxury living enjoyed by their customers. All in the name of good business development, staff from Lexus Centres across the country are being pampered at top class hotels as part of a programme to raise customer care to an even higher level: experiencing for themselves the kind of quality and service their clients enjoy and expect, will help them hone their own customer care skills.

The hotel visits are not just about the high-life, however, as the training sessions include “trust” scenarios, for example where one person is talked through the procedure for shaving a blindfolded colleague with what they believe to be a cutthroat razor. This relates to the way in which new customers need to be introduced step-by-step to the aftersales procedure, without, of course, any risk of blood-letting.

For a company already renowned for its customer service, Lexus knows better than to rest on its previous success, and what better way to improve than to have sales consultants cutting at each other’s throats?

[Source: Lexus UK]

The Wall Street Journal has an article up about the increasingly lavish Lexus dealerships that are popping up all over the United States. It’s an in-depth and enjoyable article, detailing not only the amenities but explaining the logistics behind such large investments:

The Lexus of Palm Beach dealership moved from a much smaller, older facility a few miles away to a building that cost $35 million to construct, about four times what dealers typically spent on upscale showrooms 10 to 15 years ago…In November, the first full month of operation, the store sold 335 new vehicles, making it the fifth-largest Lexus dealer in the U.S. A year ago, it sold 199 and ranked 25th.

For the past few years, Lexus has offered deals under which it will allocate more cars to dealers that upgrade their facilities. For the $35 million investment in its new showroom, AutoNation’s Palm Beach can order 2,000 cars on top of its normal allocation over the next 18 months or so. That leaves room for a lot of growth. Last year, the store sold 2,710 new cars.

Well, it takes money to make money.

A great article, to be sure.

(The photo above is Lexus of Santa Monica, California.)

[Source: Wall Street Journal]

Nancy Fein, Lexus’ Vice-President of Customer Services, recently gave a talk at the Source Media Customer Engagement Symposium, where she discussed how Lexus reacts when things go wrong. Bill Taylor, co-founder of Fast Company and business author, was at the event and recapped the presentation:

…what happens when big dreams get mugged by reality? That’s what Nancy Fein addressed in her talk. As soon as the first Lexus 400 sedans hit the market, she said, the company learned that there were three minor technical problems with the car.

So more than 300 Lexus officials organized into small groups and traveled to all parts of the country. They visited the affected customers at home, brought them a gift, apologized for the glitches in person, and, of course, brought along a technician who fixed the problems. On the spot. In their driveways.

A familiar story, but I was very interested to read about a more current event:

Last year, another small problem developed with a Lexus model—this time, the new ES 350 sedan. Something about the transmission skipping second gear and slipping from first to third. (Don’t ask for more details, I’m not a car guy.) The problem affected about 700 cars before the Lexus factories fixed it. This time, rather than visit customers at their homes, Lexus did ask them to visit their dealer. But instead of just fixing the problem, Lexus gave all the affected customers a brand new car. No questions asked.

Being as how a faulty transmission is a fairly significant repair, having dealers swap the cars with new ones has to be the most effective response that I can think of. With no time lost by the owner, there’s no bad feelings, no backlash. Even better, Lexus can repair the affected vehicles and then resell them at a slight discount.

Very smart.

[Source: Havard Business Online]

Rather than the mass-media marketing campaign expected with the release of a new vehicle, the Lexus IS-F will be promoted in a different fashion — letting potential customers test drive the car on race tracks across the United States:

Lexus will try and lure in buyers at the track, said Brian Bolain, Lexus’ national manager of interactive marketing and automotive events.

“The typical Lexus buyer is not going to be persuaded into an IS-F,” Bolain said. “It’s for someone who wants power and control. We are going to focus heavily on driving opportunities.”

Bolain said that Lexus’ performance credentials have fallen short of its European rivals and that many luxury car buyers see Lexus cars as quality vehicles but don’t rate it as a high-performance enthusiast car.

“We have a lot of ground to make up,” Bolain said.

This is a smart move, every IS-F review written so far has heaped accolades onto its track performance, and letting performance enthusiasts experience that themselves is bound to create some real interest.

These test driving events will happen at five race tracks, including the oft-mentioned Laguna Seca Raceway, with some additional street driving events thrown in for good measure.

[Via: EGMCarTech]

After years of selling through independent importers, Lexus is now setting up dealerships in Indonesia, which look like an eccentric millionaire’s home on the outside and an art gallery inside.

The exterior, I think, may be too wild, though it’s hard to get a full impression from the pasted together image at the top of the post. The organic look at the left is particularly awkward, though the right side has just the right amount of character.

The interior, though, is what impresses the most:

Marketing strategist Hermawan Kartajaya, who worked on the project, has this to say:

From the insights that had been gathered, we came out with some suggestions and one of them was to build something more than a showroom. We suggested an artistic place and called it a ‘gallery’. What are the differences actually? There are a lot of differences between a showroom and a gallery, but the main thing is: in a gallery there is a “customer flow”, just as when we visit a painting gallery or statue gallery. In art galleries there is a flow and story – the same concept applied in the Lexus Gallery.

(Another interesting point, Lexus’ slogan The Pursuit of Perfection was translated to Perfection of Personal Enjoyment for the Indonesian market.)

[Source: Hermawan Kartajaya]

Lexus has ranked second in JD Power’s 2007 Customer Retention Study, retaining 63% of its new car buyers. This was only topped by Toyota, Lexus’ parent company, with 64.6%. This doesn’t surprise me at all, reliability and customer service holds a lot of weight in the minds of most car buyers, and Lexus has excelled at both since its inception.

What does surprise me is this:

Customer retention may become even more important to automakers in the coming years, as new-vehicle sales between 2007 and 2014 are expected to increase by only 8 percent, or about 1.2 million units.

“Competition for a dwindling number of new-vehicle buyers will likely intensify in the next seven years, meaning that brands will need to retain more of their existing customers in order to increase, or even maintain, market share,” said Oddes. “In addition, it is approximately four times more costly to attain a new customer than it is to retain an existing one, so in the face of a very competitive new-vehicle market, a strong focus on customer retention becomes particularly important.”

I imagine this small industry increase of 8% is for the United States only, but there isn’t a lot of room for error in such a tight market. Retaining customers is going to be all the more important, and Lexus’ rate of return only speaks well for its continued success.

[Via: The Truth About Cars]