Chrysler Opens Online Post for Listening to Customers
May 06, 2008

By Dale Buss

As the auto industry headed into this downturn, Chrysler faced severe competitive disadvantages in crucial areas ranging from product breadth to financial wherewithal to management depth.

But there is at least one strategic arena where the privately held new Chrysler has demonstrated a determination to take a back seat to no competitor: listening and adjusting to what its customers want. Chrysler has just demonstrated that edge, for instance, by launching its gas-price "protection" plan, the first of a potential wave of similar incentives that was predicted last week by Edmunds.com.

Chrysler’s new online Customer Advisory Board (CAB) is the latest manifestation of the automaker’s decision to develop a greater capacity for gauging and then quickly responding to the expressed desires of its customers and prospective customers – one of the few potential industry-leading advantages that is immediately available to the beleaguered automaker.

Chrysler executives have continually mentioned their freedom to move quickly – without public-company constraints – as one of the benefits of going private after Chrysler’s acquisition by Cerberus Capital Management last year.

It was from an early poll of "CAB" members that Chrysler executives were encouraged to use gas prices as the basis of the new "Let's Refuel America" incentive program. When 76 percent of poll respondents indicated that rising fuel prices were their "top concern," it validated a tactical idea that emerged Monday as Chrysler's three-year guarantee of $2.99-a-gallon gasoline for purchasers of a handful of large or slow-moving models.

The CAB opened for business in late April with a couple of half-hour chat sessions, each conducted with a few dozen CAB members out of the more than 700 people who’ve signed on so far. They peppered the moderator with praises, questions, concerns and suggestions, ranging from why Chrysler put only drum brakes on its two-wheel drive Jeep Patriot to whether the company would consider introducing a compressed-natural-gas vehicle as a way to assert some innovative leadership in the fuel-economy sweepstakes.

The ranks of the CAB eventually may swell to as many as 5,000 people, or more than double Chrysler’s initially planned limit of 2,000 individuals. Marketing executives felt compelled to expand its potential size a few weeks ago to accommodate the enthusiasm of joiners. That’s a good sign to Deborah Meyer, Chrysler’s CMO, who conceptualized the CAB, a page ripped from the playbook at Lexus, where Meyer was employed before joining Chrysler last year.

“The coolest thing was all the people who want to make a difference in this transformation” of Chrysler, said Meyer after sitting in on the first CAB session. “There’s a lot of interest in our being partners – not just marketers – and not just speaking at people.”

Customer Focus

Justin Cooper, co-founder of Chrysler’s technological partner in the CAB, Think Passenger Inc., observed that the company “is really trying to be as close to the customer as they can. But it’s not just about listening – it’s also about being able to demonstrate back to those people that their input has made a difference. So it’s a challenge as well as an opportunity.”

Indeed, early on, Meyer challenged her colleagues across disciplines at Chrysler to engage the CAB by contributing personnel, topic ideas and questions for the online discussions -- as well as by being willing to consider meaningfully and respond quickly to feedback the company receives through it. The greater customer contact should “give us so much more urgency” across Chrysler, Meyer said. “Our level of motivation will be ramped up.”

The launch of the CAB adds to Chrysler’s other recent attempts to establish its credentials as the best listener among the OEMs. These include the “New Day” marketing campaign that the company launched several weeks ago, which has featured price breaks on option packages in response to customer requests and a TV advertisement which depicts a Chrysler vehicle literally taking shape as consumers express their own preferences.

This approach also includes Chrysler’s naming of the industry’s first Chief Customer Officer. Boosting Chrysler customer satisfaction is the self-described role of Doug Betts, a quality-assurance executive who came to Chrysler six months ago from Nissan and previously Toyota. While his initial focus is improving product quality and consumer perceptions of it, Betts also is laying out a broader role as a corporate listener. For example, he sent a letter to every Chrysler customer in November through January thanking them for their purchase and asking if there was anything he needed to know.

And just last week, the company instructed senior managers to call a customer a day, on average, to get their feedback about the company and its products, according to the Detroit Free Press. Chrysler executives also will be taking turns in the cokmpany’s call center and will be competing to see who can generate the most successful sales referrals, the newspaper said.

Of course, Chrysler also has created its CAB against the overall backdrop of the industry’s rapidly increasing engagement with online social media. Mercedes-Benz, according to Think Passenger’s Cooper, is considering establishing a similar mechanism. Nearly all OEMs have launched corporate blogs of various sorts, have begun listening in to and participating on independent enthusiast blog sites, and have experimented with myriad other ways of leveraging the internet to become more attuned with ever-scarcer customers. In the process, they also have managed to open up their inner workings to more public scrutiny – as well as input – than ever before.

General Motors, for example, designated a couple dozen of its executives around the world as “future leaders” of the company, as part of its GMnext corporate centennial celebration, and has had them host online chats with journalists and bloggers. And GM’s Saturn division just created a social-networking site, ImSaturn, which pulled in more than 1,200 members in its first three weeks.

Getting the Process in Gear

To kick off the CAB, Chrysler established the web site ChryslerListens.com and invited consumers to submit applications. The criteria: Participants must be at least 18 years old, a U.S. resident, and holder of a valid driver’s license. Chrysler has been processing the larger-than-expected number of applications at a deliberate pace, Meyer explained, partly so that it can strike a demographic balance in the ranks of those it welcomes as CAB members.

“We want to make sure we’ve got good representation from different groups of people,” she said, “such as truck enthusiasts, young women consumers, and older women. We have to do some recruiting in some of those areas to even things out.”

Ultimately, Meyer said, “We could form a bunch of different subcommittees around different interests.

For expertise in establishing on line listening posts, Chrysler recruited Think Passenger, a Los Angeles-based startup that previously had helped Walt Disney Co., Coca-Cola Co., Apple Inc. and other Fortune 500 companies do something similar.

“We help them have a dialog with people who care about their brand so they can keep their brand relevant,” explained Cooper, who also is chief innovation and marketing officer of the company he refers to simply as Passenger. “It’s the highest level of customer engagement.”

Initially, at least, Passenger moderators are actually conducting the chats – with Chrysler executives, including Meyer, literally and virtually hovering over their shoulders. (Chrysler also invited AutoObserver to participate in the first couple of chats.)

Talk Among Friends

The first two sessions of the Chrysler CAB were held on a Thursday at 3 p.m. Eastern Time and on a Monday evening at 9 o’clock Eastern Time. About 40 people participated in the first chat, which Meyer described as “a pretty good” participation rate. More folks, not surprisingly, were able to join in on Monday evening’s session.

Chrysler’s tack for this first pair of sessions was to introduce the concept, find out about CAB members’ expectations for the group, use participants as a sounding board for instant polls and showings of Chrysler TV commercials, and solicit ideas for next steps from those who had taken the trouble to log on for the pioneering exercise.

Among self-described participants in the first session were a machinist, an engineering sales executive, an information-technology director and an aircraft technician. The second session brought a sales manager in jet-aircraft engines, a toy-marketing executive, a college student from Texas and a semi-retired auto technician.

One respondent said it was about time “a car company really listened,” when the Passenger moderator asked why CAB members had joined. Another had just purchased a new Jeep; still another had owned three Neons and “missed” them. Chrysler was struggling, wrote another member who wanted “to give them a little insight.” One respondent wished to help Chrysler innovate. Another had purchased a Jeep last year and was “disappointed with the quality.”

On Monday, such answers included one respondent who “would hate to see them go under.” Another hoped for improvement in the Jeep Wrangler. Another wanted to “influence my future cars.”

How to Go Green

The moderator also asked both groups “what elements of Chrysler’s past should be included in the New Chrysler’s future?” Respondents heavily emphasized the company’s historical penchant for innovative products – such as the minivan category that it invented in 1984 – and intriguing styling. “Swagger” and “a little attitude” also were representative answers to this question.

One respondent yearned for “a really prestigious Chrysler flagship model,” while another was hoping again for “a small car with great quality like the Neon.”

Chrysler showed off the Passenger technology by streaming its latest TV commercial to participants and then asking for their reactions. And one of the most interesting moments of the initial sessions was a quick poll. Mentioning that Chrysler’s immediate focus is “safety and security, technology, quality and our impact on the environment,” the moderator asked participants, “Are you more influenced by the idea of a car being green or a car company being green?”

Thursday participants answered by 59 percent that they were more interested in the company being green. “That puts a different emphasis on this issue for the company,” Meyer remarked later. “It will help us get more motivated right away.”

Later in the sessions, Chrysler asked what participants would like to do in the future. Overwhelmingly, the answers were to give the CAB access to product engineers and designers. One respondent requested a chat with a representative of the United Auto Workers “to find out firsthand why unions are not willing to help the company.”

Cringe and Then Go On

But responses that made them wince are one thing that Meyer and her colleagues fully expected by opening themselves up with the CAB.

Some of the riffs created by respondents were merely annoying. For example, on Monday, one CAB participant got fixated on his own suggestion that Chrysler should consider working toward “a Hemi-powered Alfa Romeo” because it “would get my blood pumping.”

Other responses, however, exposed genuine sensitivities for Chrysler, some of which go to the heart of the existential issues that the company faces. Product and design decisions were one major such subject.

One respondent said he would want to ask Chrysler design chief Ralph Gilles why he went with round headlights in the Chrysler 300 sedan “instead of easy square ones.” Another opined that the Dodge Caliber compact “is too crossover-like,” seems too heavy, and is too thirsty. Still another asked Chrysler to consider a panel of “real” people to evaluate its product ideas – a device which, if in place a couple of years ago, “might have stopped the [Jeep] Compass.”

Commenting on Chrysler’s recent product partnerships with Nissan and Volkswagen, one respondent worried that the two competitors would be “eating your sales.” In a long complaint, another wondered why Chrysler had “conflicting priorities” that had caused it to reject “badge engineering” but that now requird it to be “badge engineering but then badge engineering a minivan for VW and a truck foi Nissan?”

Another CAB member on Thursday called for Chrysler to return to “what it was before Daimler tore it apart,” referring to the dynamic era before Chrysler was acquired by Daimler-Benz in 1998.

When asked by the moderator what kind of people CAB should feature in the future, one respondent said, “The guy who chose Plastech” -- which may have touched raw nerves at Chrysler over the company’s stressful recent dispute with the supplier firm.

However, still another CAB participant on Thursday typed that he had interacted with current Chrysler CEO Robert Nardelli when Nardelli was CEO of Home Depot, “and he truly listened to the customer.” That was an interesting take on concerns inside and outside of Chrysler about what Nardelli has brought to the table despite his previous lack of auto-industry experience.

Only a Start

By the end, some respondents were impatient with Chrysler’s limited objectives for the first two sessions and questioned their value. Much of it could have been done “in real time,” one wrote. Another critiqued the “canned” nature of the questions and polls. Another said that Chrysler could glean more valuable information by participating in reader forums on independent online sites.

Another respondent reminded Chrysler that “there is a lot of talk on the blogs saying this whole advisory board is just a feel good exercise.”

And by and large, respondents were eager to begin engaging actual Chrysler engineers, designers, executives and managers in the sessions rather than have to run through a Passenger monitor.

One outside expert on virtual relationships with customers warned that devices such as Chrysler’s CAB “can’t substitute for actually spending [physical] time with customers and getting under their skin and getting a deeper understanding of what makes them tick.” Nina Powell, managing director in the U.S. for ?WhatIf!, a U.K.-based innovation consulting firm, added that Chrysler should be “clear what it is looking for, not just getting spastic kinds of ideas” from CAB members “but very targeted ones according to specific opportunities.”

Many participants praised Chrysler’s step of creating the CAB in the first place and expressed hope that it would make a real difference for them and the company.  “This was great!” wrote one. “Please listen to us. We are rooting for you and want Chrysler to be successful.”

Meyer said that Chrysler already was processing the content of the first couple of sessions. Among other things, she is soliciting ideas from across the company for poll questions. “We have things come up on a weekly basis that we’d like to get responses on,” Meyer said. “It gives us quick feedback.”

Betts, Chrysler’s Chief Customer Officer, noted that “we’re already submitting questions” for the CAB to put before its members “from my area, and engineering and manufacturing, so we can understand customers’ priorities.”

And Meyer heard, loud and clear, CAB members’ requests to engage online with real Chrysler engineers and designers. Meyer plans to include them in the next few CAB sessions, she said. “That’s how we’ll build trust,” Meyer said, “and develop relationships with this audience.”

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