Before we turn our attention to the automotive industry in 2021, a brief lesson from history.

During British rule in India, the government became concerned at the quantity of venomous cobras in Delhi. Their solution? Offer a reward for every dead cobra turned in. At first, this seemed like a great success, with large numbers of snakes killed. However, some smart locals began breeding cobras to access this new income stream, so the program was scrapped. Following this, large numbers of worthless snakes were set free, increasing the wild cobra population!

The cobra effect is an early example of a perverse incentive – one that has an undesirable result contrary to the intentions of the designer. Fast forward to today, and we regularly see history’s mistakes repeated.

A CX program should help dealers better understand customers, so they can improve their service to meet (and ideally exceed) expectations. While you’d hope that such sensible business practice would be automatic, manufacturers often dangle significant financial rewards to encourage dealers to meet CX targets.

The result should be genuinely better service, as dealers strive to maximise service quality, right?

Well, some of the activities we’ve seen over the years include:

• Customers being sent letters, telling them which scores to give in the survey

• Staff phoning customers, to berate them for giving a lower score than they would have liked
• Dealer staff inventing email addresses for customers, so that they can complete the surveys themselves
• Energy being invested to try and have specific surveys removed from scoring
• Customer email addresses being entered incorrectly, so that a survey invitation does not reach them
• Customers being told that they need to give a particular score, or the relevant staff member will be “in trouble”

• Customers being offered a free service, or entry into a significant prize draw, if they give a particular score when completing their survey

You have to ask, does any of this lead to improved service for the customer? In a word, no.

A lot of energy is expended trying to influence survey scores, versus simply keeping customers happy and trusting that they will assess the experience accordingly.

Ultimately, future success depends on real people visiting to buy or service a vehicle and, ideally, suggesting to friends or colleagues that they might want to do likewise. It doesn’t come from manipulating survey scores to achieve a nominal target, no matter how appealing this might appear in the short term.

We have systems to identify and manage many of the bad behaviours described, but it would be far better if manufacturers could avoid creating perverse incentives in the first place.

Encourage positive behaviours, certainly, but always consider whether the incentive program will just deliver more dead cobras.