My preference, too!
Apparently there were a number of concepts that were supposed to have been brought to market alongside the Lightning? In any case, someone probably thought there was a significant enough overlap between “people who like electric conveyances” and “people who aren’t interested in our traditional motorcycles.”
I remember one time a coworker was looking to get a motorcycle and I went with him to dealerships as he shopped around. We went to a Harley dealership and he was talking to a salesman about their bikes. At one point he asked about mileage compared to other motorcycles, and the guy basically said that the philosophy of a Harley is to toss as much gas down the biggest pipe as fast as you can. Basically it was all aesthetics, there wasn’t really much to it beyond the image of being on a Harley.
Maybe that was just a bad salesman but it really turned him off. He ended up getting a BMW bike that he loved.
I heard somewhere that Harley-Davidson is making and selling more three-wheeled motorcycles, because its target audience is aging and not as capable of handling a big two-wheeler. I think I even saw some with the dual wheels in front.
Quality is not easy, It’s not just about quality on the assembly line - everything from training to supply chain management to dealer involvement has an effect.
Everyone pays lip service to quality, but in large hierarchical organizations it only takes one bean counter with authority to derail quality projects.
The same is true for innovation. One of the major reasons that start-ups innovate more than big legacy companies or governments is that startups are often run by people who have huge amounts of authority to bypass the hierarchy.
Take Apple, for example. While Steve Jobs was running Apple he could do things like decide he had to spend millions to re-engineer the CPU to get rid of a few wait states that would occasionally cause a jitter when scrolling through pages. Another time he cancelled the white iPhone because the white he was promised turned out a loo beigey for his taste. Only a Steve Jobs could get away with that.
Other companies have good product people as well, but only a guy like Jobs could actually make such decisions and ram them through corporate management.
Every company says that quality is #1. But actually following through on that in a realm of tight budgets and deadlines with responsibility spread over many people is actually a recipe for mediocrity.
Elon Musk was once asked what the most important thing was for an engineer to be able to innovate. His response: “Always be willing to push back on the constraints you were given if you think of a better way.” His example was the engineer who came to him and said that stainless steel was a better choice than carbon fiber for Starship. Musk looked at the engineer’s report, saw that he was right, and subsequently retooled the entire production, including scrapping huge multi-million dollar mandrels for spinning carbon fiber.
The thing is, most engineers in large companies simply can’t do that, as their work is always given to them with narrow constraints, and any pushback against previous decisions will get you, “That’s above your pay grade, and that ship has sailed anyway”, or “Nice idea, but we’re already committed to this path. Let it go.” By the time the project makes its way down to the engineering floor, too many careers are invested in it to tolerate major changes from lower levels just to improve quality a bit or make the product more usable.
So while Elon was right, it usually takes an Elon Musk or Steve Jobs to be able to actually do it.
I think a lot of executives only look at the next quarter. if their cost shaving mechanisms destroy the company 5-10 years from now they expect to have left and be working for a different company by then.
Stages of management’s goal:
- make product
- make a profit by making product
- make a profit, whatever it takes
- increase stock value, by being profitable
- increase stock value, for its own sake, whatever it takes
Very well said.
Two pithy things come to mind:
- I like Jay Leno’s Garage. He, not infrequently, sings the praises of automotive companies started or run by the engineers (, and not the bean counters). Same reasons;
- I don’t remember who first said it, but the basic premise is "quality must be designed in, not tested out.’
Particularly the latter: maybe bumper-sticker wisdom in its brevity, but it’s maybe the single most important idea in putting out a high quality product.
I was a corporate VP in a company that dealt with perishable products that were shipped all over the country. Perishable is tough. You’re subject to an endless number of extrinsic variables.
But one thing I always said was, “We may not have control over every single aspect of the product that we deliver, but we do have absolute control over how we respond to problems that arise.”
Others have made this point: always try to deliver a better product, but definitely stand by your product, rectify your mistakes, and take good care of your customers.
Long digression made short:
I advocated for liberal customer service policies. Our CEO and President pushed back hard.
I had a report run that looked at:
- customers who had no apparent problem with their purchase
- customers who did have a problem that resulted in either a refund or replacement – liberal treatment
- customers who did have a problem that resulted in either a refund or replacement – tight-fisted treatment
And evaluated their buying habits over the following year.
And my hunch was correct: the group that had a problem, and that had the problem addressed by our Customer Service department, armed with liberal policies, made significantly more purchases and spent more per purchase in the subsequent period than those who didn’t report a problem.
And they made even more purchases and spent more money than those with whom we were not as generous.
[People who didn’t feel that their complaint was well handled spent less money in the subsequent period than even the apparently happy/satisfied customers with no problem with their order. They felt that they’d been failed twice]
The CEO asked what the wisdom was, here – “So, we should screw up every order ?”
No. We should do our best to hit every order out of the park, but we should ensure that our customers know that, if there is a problem, we’ll move heaven and earth to make it right. We should use Customer Service as a strategic part of our company, not just the gravediggers who come in when all else fails.
Turns out, customers actually value that 
The payback from our liberal refund/replacement policies happened well within that subsequent year. After that, it was just profit for as long as we retained those customers. Similarly, those who felt poorly treated never came back up to baseline spending.
Part of this is understanding LTV – lifetime value – of a customer. We/Corporate America – particularly publicly-traded companies – can be SO damned myopic.
But for understandable, if not admirable, reasons.
Your CEO sounds like a moron.
Your informal survey matches a study I read about decades ago. And the results were the same as yours. Happy customers were happy. Unhappy customers were unhappy. But if you made an unhappy customer happy, they were ecstatic.
My dad only bought Japanese vehicles. Odd, considering he fought against them in WWII. I asked him why he preferred Japanese, and he said he got to see first hand how superior their aircraft was to American-made. I eventually learned why. He was stationed in Australia and had to man a machine gun turret on a freighter running supplies to General MacArthur’s base in the Philippines (and back). They were only 1 of 3 successful runs. The Japanese Zeros bombed all the rest.
All that time fearing for his life was the selling point.
And he was wrong anyway. The Japanese lost their fighter superiority early in the war with the advent of planes like the Hellcat, the P-38 and the Corsair. The superiority of these planes, plus the declining quality of Japanese pilots, led to kill ratios against Zeros as high as 20-1.
Since it’s the only data point you have, I understand how you’d draw that conclusion.
But he wasn’t a moron at all.
I don’t know that it’s intuitive that throwing money at a customer will either make them happy or pay for itself. IIRC, it was Nordstrom whose customer service policy was “Make the customer happy.”
Full stop.
But it’s easy to say that – at their likely margins – that’s a luxury that they can afford that others probably can’t.
I also know that in dot-com and/or IPO mode, $0.50 today is worth more than $2.00 (or, often, $10.00) next year.
So, while I clearly take your point, it’s really more about perspective and time horizon.
The CEO was a shockingly bright guy, actually, who never ceased to surprise the rest of us with exactly how much he knew about the operations of the business – stuff you’d figure was well below his pay grade.
He wasn’t bogged down in the details, but he had a better grasp of them than most would have guessed.
Word.
Which also gave rise to the great business maxim that one happy customer will get you two, but one unhappy customer will cost you 20.
Expectations for goods and services tend to run fairly high, and tend to escalate with price points. But expectations for service have been pummeled down for many with time and experience.
Thus, it’s relatively easy to disappoint a customer with your product or service, and relatively easy to dazzle (and retain) them with outstanding customer service.
Like I said, he was convinced of their superiority because he feared for his life.
I’m an Amazon customer. I buy a lot from them. They’ve screwed things up multiple times over the years but they’ve made it right every time and don’t make a fuss out of it. That’s why I’m still a customer.
Realizing that so much is manufactured overseas and especially in China anyway, I’ve come to my own sort of policy. If it’s really cheap crap that I need for a single use (especially something like a one-off tool), I’ll buy the cheap crap which is almost always badly made in China. If I find that I need it a lot more, then it’s worth spending more on a high quality replacement. Ideally that will be American made if possible, friendly/allied democratic countries second, and China third. The specifics of the precise manufacturer don’t matter as much and again, when all supply lines and production seems to run through China there’s only so much you can do. And yes, the decision will be made in part based on previous experience as well as customer support.
The best e-readers, IMHO, are made by a Chinese company. The Onyx Boox line of e-readers have Kindles and Nooks beat in most departments. The only problem with them is that you can’t directly access the Kindle store, Google store, Barnes and Noble store, and so on with the native reader. Instead you have to download the Kindle app. Battery life, however, is much better on my Onyx Note 2 than my Kindle Oasis. The former will last a good month or so, even using the light. The Kindle Oasis battery will last 3 days if I’m lucky.
It wasn’t that he didn’t grasp this concept. Lots of CEOs don’t make the connection between spending a bit to earn back a little more.
It was specifically your quote of his response to your analysis, that instead of considering the facts and figures and adjusting his assumptions, he leaped to a sarcastic and/or deeply stupid dismissive mis-statement of your thesis, that the way to make customers profitable was to make them unhappy so you can make them happy again. That’s a moron thing to say, full stop.
Oh, yeah. No: no argument there. It was not his finest moment.