Why a luxury London car dealership couldn’t sell a car!

When my friend, a successful engineer, turned up at a London luxury car dealership ready to part with £40,000, she expected to have a few questions answered and then to put a downpayment, after all she had already built the car online.

When asked to give precise explanation surrounding two features, the “sales” person’s response was, “don’t get this, you don’t need it!” and “this option is a waste of money!”. The truth is, the “sales” person in question was probably unequipped to answer all of her questions and being a woman (as she felt) he probably thought she didn’t need to understand every little detail, just the basic options and colours.

Frustrated and enraged, my friend complained to the head office who apologised and sent her to a dealership 20 miles away where a “specialist” would meet her. A “specialist” who is unavailable in all the branches of all the dealerships! When my friend sat two hours with the specialist, she ended up spending £2500 more than she had originally intended, out of which, she got reimbursed around £500 for a further mess up by the “specialist” who sold her an option incompatible with her iPhone.

Could this be the typical scenario of companies in pursuit of a lean machine, whereby cuts to staff are made in a bid to increase profits by increasing productivity? Maybe maybe not, however, the wave of European and American companies looking to skim the hierarchy whereby the replacement is not technology, but humans taking on more responsibility, is undoubtedly detrimental to luxury. It is hard to imagine a sudden increase in workload not eroding the luxury service once delivered by the same person.
Such pursuits by suppliers of the masses may be forgiven, but customisation in luxury is expected and customer deflection is inevitable if it is jeopardised. Once it occurs, customer deflection will raise the cost ratio of employee/output, hence reverting back to a higher cost whilst harming the brand’s image.

In economics, the relationship between productivity and customer satisfaction is generally viewed as negative, this is especially true when the pursuit for customer satisfaction is directly linked with personnel efforts. Some even argue, that for a firm to make both customer satisfaction and productivity a top priority is only setting out to achieve the impossible.

When considering short term gain, it is obvious that cutting costs will increase profits, however when factoring in customer deflection in the long term, surely, customer loyalty in the service industry is a more accurate measure of future profits than costs are?