In this excerpt from their new book, Satisfaction: How Every Great Company Listens to the Voice of the Customer, Chris Denove and James D. Power IV, son of the founder of J.D. Power and Associates, detail how Lexus established itself as a leader in customer satisfaction among car buyers.

Small glitch

The cars sold well initially, but a few months into the program the one thing happened that Lexus feared most, and that executives at competing car companies secretly dreamed: the cars began to experience a problem. We're not talking about a stuck-on-the-freeway type of problem, but just a little crack in the armor that Lexus knew could snowball into a deluge of bad press for a company trying to establish itself under the eye of a microscope. It seems that two customers in different parts of the country complained about a glitch in their cruise control.

Lexus faced a decision. After all, it was only two cars, and thankfully this particular cruise control glitch didn't pose a safety issue. It could quietly fix those two cars and wait to see whether others surfaced with similar problems. Or it could issue a recall and let the world know that Lexus engineers were human after all. To those we interviewed for this book, the decision was simple. Since Lexus was counting on its dealers to deliver a level of service head and shoulders above that of any other automotive brand, Lexus needed to take the high road and set an example, one that is still talked about among automotive insiders today.

Big fix

So, just a few months out of the gate, Lexus recalled every LS 400 it had sold. They made this decision knowing full well that competitors like Mercedes, BMW, and GM were just waiting for the company to stumble, ready to pounce on every miscue. They could almost hear the cheering from Stuttgart and Detroit at the misfortune of this early recall. They knew competitors would use the recall to proclaim that Japanese automakers need to learn their place, stick to selling small economy cars, and let the more established manufacturers cater to the world's automotive elite.

But remember, Lexus set out from the beginning to redefine the meaning of luxury. They realized that this recall provided them with an opportunity to really show the world that they were dealing with an entirely new kind of car company, a company that didn't just talk customer satisfaction, it lived it. So, when Lexus owners received their recall notices, they were in for a surprise. The notices not only included a detailed apology letter, but owners were advised that their dealer would come to their homes, pick up the car, and leave them a loaner car free of charge while the repair was made. Every car was returned to the owner washed, detailed, and with a full tank of gas.

There was even a gift sitting on the driver's seat as thanks for their patience.

And when a customer lived beyond the normal range of a Lexus dealership, the company's field personnel took it upon themselves to drive to the home, break out their tools, and fix the problem right there in the customer's own garage. In at least one case this meant getting on a plane and flying a technician to Alaska to fix a customer's car, because Lexus didn't yet have any dealers outside the continental United States.

For all practical purposes, we believe this recall marked the day that Lexus was truly born, and not the day it sold its first car. This is because the recall was the day that Lexus showed the world what it really meant to be customer-focused.