Why Toyota is Winning

I’ve had a busy week for interactions with the service industry. Three different cars spent time in the shop, and a beloved family pet spent his final days in a pair of vet clinics. I’ve had far too many chances to see what makes these businesses tick.

Last things first, late Tuesday night we rushed my son’s pet rat, a remarkably cute, friendly, and lovable guy, to the vet emergency room for his final bout with chronic lung disease. The emergency room, although quite a drive away, was a beautiful facility, with consummately professional people. It was breathtakingly expensive, but the care was great as they stabilized him.

The next morning I rushed him to his regular vet for what turned out to be his last time. That vet’s office is more what you envision, a tired little building with worn fixtures and plenty of old pictures of patients everywhere. The people, however, were just amazing, and they offered the best possible experience for us in this amazingly difficult time. Two very different experiences, but with similar results — great service from people who really cared. Although I wish the latter clinic was as nice and up to date as the specialty center, clearly the people didn’t let that effect their attitude in the least.

With the cars, however, it was a very different story, offering stark contrasts. The three cars are literally from around the world: a German sport sedan (BMW), a Japanese small SUV (Lexus), and an American monster SUV (GMC). A pretty interesting cross section of the car business, and this week, it offered me a great chance to see their customer service experience in close-up.

The BMW was in for service a week or two ago, but it needed to return on Monday. It needed new tires (after all of 20,000 miles) so I went to Discount Tire, and was in an out at a respectable price in just over an hour. Not bad. The car however, was nagging about “service due”. It had just been in for service. As I was near, I stopped in to ask the dealer for assistance. The dealership is being completely reconstructed from the ground up, and it is a mess. The service department is in portable buildings. There is construction activity and confusion everywhere. But the service guy promptly looked it up, turns out one of the many “resets” that should’ve been done on my last service wasn’t, and it was handled cheerily and in less than 10 minutes.

The dealership is being completely reconstructed and it is a mess.

But the original service episode was a different story. These new cars don’t go in on a regular basis, every 5,000 miles would be too easy. No, they tell you when to bring it in. So one day, it started saying “service due”. Great, I promptly called for an appointment — which they could only do three weeks out. When I arrived I received a minor chastising for being overdue on my service… After I defended myself they explained that the dealership overhaul was largely to expand the service department and this would no longer be an issue.

The GMC experience was from a different planet. I have always maintained that car well, and now that it is getting long in the tooth (~100k miles) I wanted to get it fully up to shape. Over the last couple of months I have thrown plenty of good money at this car: thousands for extensive bodywork and paint (to make up for years of abuse by teenagers), and at least four trips and $7,000 to the dealer for a variety of ills. They didn’t get one fixed the last time, so I was in again on Thursday for another shot at that issue.

A crew of employees who seemed to want to be anywhere but there.

The dealer is an old-fashioned car dealer, on the row of car dealers that so many towns have. It is a cramped, ugly, and tired building with carpet that is five years past “worn”, fixtures that were outdated from day one, and a crew of employees who seemed to want to be anywhere but there. My service rep is a fine young man who tries exceptionally hard to make due in these surroundings and tried hard to make the experience as painless as the fourth trip in a month to a car repair facility could be. But the promised rental car was not there (I was stuck) and nothing much softens the blow of a second try at fixing the same problem — out of warranty. I arranged a pick-up and was glad to be gone.

Then, today, the Lexus went in for it’s 60,000 mile checkup. The service facility is a mile or so from the dealership, a temporary measure as they build the Taj Ma-Dealership, an almost unbelievable structure being built on the site of the former city hall. And yet the service facility isn’t temporary buildings, no, it’s a beautiful, fully Lexus-branded edifice. It has tile floors, great lighting, and a row of clean, windowed offices facing the service drive. I was greeted promptly by a pair of smiling young men, one to take the car, and one to help me. We decided on the service regimen in his private office, where he genteelly tried to upsell me to over $1000 in service. I declined, but he took it well, and I was promptly off and being whisked away in a private shuttle for me — back to the GMC dealer to pick up the truck.

The clean, efficient, and service-heavy Lexus dealership

It was then that the contrast was so clear. The broken down GMC dealership with last year’s Buick Rainier (small SUV) sporting a $5000 mark down sticker on display, a crew beaten into submission by their environment, and customers who seemed just as depressed vs. the clean, efficient, and service-heavy Lexus dealership nearly beating customers away with a stick.

People in the car business (an industry I’m quite familiar with) say time and again it’s about the products. But it’s not that simple. For the money the GMC is a fine product, I’d buy another and be pleased with the cost-value equation. No, it’s about investment, organizational culture, and attention to detail.

No, it’s about investment, organizational culture, and attention to detail.

Toyota (the Lexus parent company) makes these investments, hones the culture, and sweats the details. BMW wants to do the same, but never seems to measure up. And GM just further calcifies. For me this contrast was drawn ever so vividly this past week Never was it so clear why Toyota is taking the world by storm and Rick Wagoner of GM is trying to keep his job and that of 325,000+ of his employees.