About a year ago, I wrote a consumer-focused piece on why I personally chose a Jaguar F-Type over a Tesla S after considering both cars. One Tesla owner in particular gave me tons of grief, arguing that there was no comparison. The Tesla car was far better. This week, I got a little revenge as Tesla’s repair record was shared, and it isn’t pretty. I also know Tesla’s loyalty scores are much higher than Jaguar’s, though. These numbers reiterate what I once learned about Dell and showcase the power of applied analytics. Let me explain. First, I’ll set the stage.
F-Type vs. Tesla S
While these are very different cars, both are the flagship products from their respective companies, and in Tesla’s case it’s the only product. Both are near ground-up new designs, but the Jaguar is a traditional gas-engine, rear-drive sports car and the Tesla S is a twin-engine electric sedan. The F-Type represents the cutting edge of automotive design. It comes from highly automated factories, but for an all-aluminum car it is a tad overweight. The Tesla is more like an iPad with wheels and is highly modular, which represents a blend of automotive and technology engineering. The Jaguar is where the auto market is; the Tesla is closer to where it is likely going.
When you look at the fan base, Jaguar owners go back decades and a number of us have weathered some pretty bad years (i.e., the 70s and 80s). Tesla owners are new, but very Apple-like in both their loyalty and their willingness to engage in battle to protect their brand. Jaguar is being ranked with some of the best cars today, but Tesla, for the most part, is almost in a class by itself.
What makes the difference, I think, is that the Tesla drivers are more connected to Tesla as a company than Jaguar drivers are to Tata, the firm that now owns Jaguar. At the core of this connection is analytics, and it is this connection that has helped prevent Tesla from following Fisker into the big car company graveyard in the sky.
Dell and Customer Satisfaction
I’m going to take a side step now and share something I learned in the 1990s. I was working for a large analyst firm and I was fascinated by the customer loyalty scores between Sony and Dell. Sony had by far the higher quality product, but Dell customers were far more loyal. If you looked beneath the numbers, this was because while Dell’s products failed far more than Sony’s PCs did, Dell took terrific care of its customers and the customers loved the company for it. Sony’s products didn’t break as often, but its care sucked. Because of this, loyalty to the Sony PC brand was very poor. It is interesting to note that Sony Electronics at that time scored very well (and likely propped up the PC business), but this was because solid-state electronics almost never failed, while PCs had far more issues. So the Sony service experience didn’t hurt its electronics business.
In the end, we concluded that it was better to have an unreliable product with great service than to produce a more reliable product with poor service. We also concluded that high customer touch, like what Apple does in the Apple stores, can make a huge positive difference with customer retention. Now you can automate that touch, and this is where Tesla comes back in with analytics.
Connected Cars and Analytics
What really makes Tesla different from the standpoint of customer care is that every car is connected back to Tesla for its entire lifetime. Tesla often knows about a problem before the driver does, and if your Tesla car breaks down, help will generally be routed to you immediately. No looking for your AAA card or trying to figure out where you placed the Concierge card. (I’ve bought a number of cars with Concierge service, generally outsourced, and I’ve never used this service once.) Like Apple, Tesla takes ownership of your experience and insures that it goes smoothly. So, if you have a problem, it becomes an opportunity for Tesla to re-engage.
Calls to Tesla are monitored, its cars are monitored, and through analytics, engineering is aware of any trending problems and often fixes are prepared and applied before the user/driver is even aware there was a problem. With cars like the Jaguar, problems are brought to the company’s attention through a variety of ways, and the firm seems to do its level best to pretend they don’t exist. For instance, Jaguar actually forgot to put the locking gas cap door on all of the U.S. cars. Elon Musk at Tesla likely would have personally kicked some butt and that problem would have been fully addressed shortly after it was identified. However, Jaguar’s response after months of complaining was basically, “Oops.” The new cars coming in still don’t have a locking gas cap, and I’ll bet it is because Jaguar doesn’t want existing owners to make a bigger fuss.
With the analytics and customer contact, Tesla’s management can see the tradeoffs in customer loyalty and cost and make balanced decisions that favor loyalty. Jaguar doesn’t capture data on the loyalty impact and thus sees only the cost for the fix and decides against it because it doesn’t have access to the same level of customer information that Tesla enjoys.
Wrapping Up: All Else Being Equal, I’d Buy from Tesla
This is the choice you want your customers to make and the why behind analytics. When that next purchase decision comes up, you want there to be one choice in favor of your company. But if you aren’t capturing and reporting what is going on in the customer’s head, critical product and service decisions will be made based on saving money in your company and not on preserving customer loyalty. The result is that the costs surrounding customer churn will be excessive.
One of the reasons I favor EMC is that it does more work to understand its customers than any other firm I follow, and to me this is the most important part of a customer relationship. This means the vendor is listening and doing something with what it learned. A vendor that focuses only on containing costs will eventually bite me in the butt, which is an experience I’d just as soon avoid.
This Tesla vs. Jaguar example showcases the why behind analytics—at least with respect to customers. It allows you to make decisions that assure that customers stay with you even if you have product problems and helps insure that at the first indication of a major problem, the customer isn’t going someplace else. I think this is at the core of why Tesla scares the other car makers so much: As a company, it engages the customer where the other firms can’t, and as a result, even a progressive firm like Tata can’t compete. This showcases that analytics is the one weapon you really need to have working for you to keep your customers from looking for greener pastures with your competitor.
Rob Enderle is President and Principal Analyst of the Enderle Group, a forward-looking emerging technology advisory firm. With over 30 years’ experience in emerging technologies, he has provided regional and global companies with guidance in how to better target customer needs; create new business opportunities; anticipate technology changes; select vendors and products; and present their products in the best possible light. Rob covers the technology industry broadly. Before founding the Enderle Group, Rob was the Senior Research Fellow for Forrester Research and the Giga Information Group, and held senior positions at IBM and ROLM. Follow Rob on Twitter @enderle, on Facebook and on Google+