Boatguy
Well-known member
I was at a cocktail party last week when the discussion turned to customer support. The conversation eventually became a comparison of two very different products.
The first is a $700 consumer electronics product, the iPhone. The second was any luxury car, ranging in price from say $45,000 for an i3 to $75,000 for a larger BMW / Mercedes / Lexus. After a bit of conversation (and wine) the differences were quite startling. Consider that the gross margin on the iPhone is probably $300, maybe a little less. The gross margin on the car is at least $10,000, maybe $15,000. Now compare the support.
If you have a problem with your iPhone, you can schedule a call with the manufacturer from 4am - 8pm Pacific for a known time, 7 days a week, irrespective of where you purchased the iPhone. There is also a chat service during the same hours. Or if you prefer face to race contact you can make an appointment to talk through your problems at a local store. All of this for a product that has maybe $300 of gross margin and is enormously more complex in terms of user functionality (i.e., opportunity for customer error) than an automobile. We now take this for granted and expect this kind of support. That said, the warranty is only for 1yr unless you buy an extended warranty.
By contrast, the support for the $50K - $75K car with gross margin of $10K - $15K comes with a 4yr warranty, but the manufacturer will not, under any circumstances talk to you about the product. The dealer network has a huge variation in expertise with some service departments having considerable expertise and others only the bare minimum. My BMW service advisor actually asked me where his customers were getting so much information, because it obviously wasn't from him! In my case the dealer installed the latest software update to solve my non-operating air conditioning, but made no mention (and I think did not even realize) that they were also degrading the charger performance to protect the KLE. I've never received any communication about the KLE problems or the details of the most recent software update. Can you imagine if your phone manufacturer told you they had down graded your phone from 4G to 3G and didn't even tell you? And if they did tell you, they gave you no commitment to when or how they would provide a fix? There would be a class action lawsuit within weeks.
My experience with Mercedes over four cars has in general been better and Lexus was hard to tell because I essentially had no problems with that car in the two years I owned it. Porsche exceeded my experience with BMW. But none of these "luxury" manufacturers provides anything close to the support we expect for a $700 consumer electronics product.
But my point is not to complain about BMW, it's to point out how I believe we have been conditioned to expect very poor customer service for automobiles. There is simply no economic sense as a consumer why we should expect one level of support for a $700 product and a far worse level of support for a $50,000 product. But we do, and since we are willing to accept the lower level of support, the manufacturers have no reason to improve it.
I find it kind of odd and I suspect there is an opportunity for a manufacturer to shift the competitive landscape by providing better service.
The first is a $700 consumer electronics product, the iPhone. The second was any luxury car, ranging in price from say $45,000 for an i3 to $75,000 for a larger BMW / Mercedes / Lexus. After a bit of conversation (and wine) the differences were quite startling. Consider that the gross margin on the iPhone is probably $300, maybe a little less. The gross margin on the car is at least $10,000, maybe $15,000. Now compare the support.
If you have a problem with your iPhone, you can schedule a call with the manufacturer from 4am - 8pm Pacific for a known time, 7 days a week, irrespective of where you purchased the iPhone. There is also a chat service during the same hours. Or if you prefer face to race contact you can make an appointment to talk through your problems at a local store. All of this for a product that has maybe $300 of gross margin and is enormously more complex in terms of user functionality (i.e., opportunity for customer error) than an automobile. We now take this for granted and expect this kind of support. That said, the warranty is only for 1yr unless you buy an extended warranty.
By contrast, the support for the $50K - $75K car with gross margin of $10K - $15K comes with a 4yr warranty, but the manufacturer will not, under any circumstances talk to you about the product. The dealer network has a huge variation in expertise with some service departments having considerable expertise and others only the bare minimum. My BMW service advisor actually asked me where his customers were getting so much information, because it obviously wasn't from him! In my case the dealer installed the latest software update to solve my non-operating air conditioning, but made no mention (and I think did not even realize) that they were also degrading the charger performance to protect the KLE. I've never received any communication about the KLE problems or the details of the most recent software update. Can you imagine if your phone manufacturer told you they had down graded your phone from 4G to 3G and didn't even tell you? And if they did tell you, they gave you no commitment to when or how they would provide a fix? There would be a class action lawsuit within weeks.
My experience with Mercedes over four cars has in general been better and Lexus was hard to tell because I essentially had no problems with that car in the two years I owned it. Porsche exceeded my experience with BMW. But none of these "luxury" manufacturers provides anything close to the support we expect for a $700 consumer electronics product.
But my point is not to complain about BMW, it's to point out how I believe we have been conditioned to expect very poor customer service for automobiles. There is simply no economic sense as a consumer why we should expect one level of support for a $700 product and a far worse level of support for a $50,000 product. But we do, and since we are willing to accept the lower level of support, the manufacturers have no reason to improve it.
I find it kind of odd and I suspect there is an opportunity for a manufacturer to shift the competitive landscape by providing better service.
