The Customers’ Revenge
A few years ago I got a new Audi A3. The car was great and I loved driving it, but about three months later, while I was driving down the Mass turnpike (trucks on my right and left), the transmission stopped responding and the car lost speed, fast. It was very dangerous to maneuver to the right shoulder, but eventually I made it.
Over the next month or so I had multiple “chats” with the Audi customer service representatives, as well as with the Audi repair shop where my car had become a permanent fixture (I think they were trying a new experiment on how to best annoy their customers and they were getting better and better at this with every passing day). About 5 weeks after the transmission died, I drove my rental car back to Boston, and took my Audi back to Princeton. But this was not the end of it for me.
Every time I saw the car I was reminded how rude and unhelpful the people at Audi were, and I wanted them to feel some of the frustration that I felt during this experience — I wanted some revenge. I considered making a YouTube video about my experience, but at the end decided that there was a more complex and interesting point in all of this. I decided to write an HBR case that describes my experience in a general way, and the dilemmas facing companies when consumers have access to YouTube, e-mail, and blogs. What should companies do? How should the availability of such technologies change the way companies treat all, or perhaps their most “dangerous,” customers?
Here is a link to a description of the the case study
In addition to the dilemmas facing companies, it is also interesting to consider why I got so annoyed and wanted revenge. Cars break from time to time, and this is just the way things are. So why was I so annoyed? I think it was because no one at Audi seemed to care that my life was in danger, that I was stranded far away from home, or that so much of my time was wasted trying to figure out what was happening with my car and when I would get it back. I don’t think there is any way that I would have enjoyed the experience, but I suspect that if the people at Audi were more attentive and understanding, much of my current dislike of Audi would not have been an issue.
Now that I’ve written all this down, I do feel better about it.
The Upside of Irrationality, explores some positive and some negative ways that irrationality plays out in our lives.
Like many people I know, I would prefer to “buy American” but I cannot overcome the expensive, real life, lessons learned over the past 30 years. The knowledge that decades of American cars have been built with planned obsolescence by the manufacturer is no secret. American car dealerships have long been placated over complaints of lower profit margins (forced by manufacturers) with increased “recommended” or “required” maintenance services that can turn a visit for a $25 oil change into a $1,000 bill based on “strong recommendations” and scare tactics, often for completely unnecessary service, by service managers. In the fall of 2006, I listened to an old friend, who has owned an American car dealership for decades, complain about the low margins and “no damn service needed” (… they just don’t break down… we didn’t believe it until we were selling them – you really don’t need a service department for them”) for a Japanese car brand he had taken on to replace an American brand he had lost (Oldsmobile).
Slick television ads and promises of 36,000 – 100,000 mile “limited warranties” that provide little real coverage are all smoke and mirrors… and the general public long ago figured this out. In recent years, I understand that many foreign cars are now more “made in America” that traditional American brands but the quality control still seems to be better with the foreign companies. I sincerely wish that I did not feel the way I do, based on my experience with American cars, but “screw me once… shame on you, screw me twice… shame on me.” American car manufacturers have continued to screw their consumers for far too long and gotten away with it, that they do not know how to do business otherwise. It may be too late for them to actually build a product that can help them gain market share, much less regain the trust of their customer base. Obviously, the auto industry unions have contributed greatly to the demise of this once dominant industry. You can only put lipstick on a pig for so long before everyone figures out that it’s just a pig.
- Phil Buchanan
I had similar problems with my Golf 1.8T (the cheaper, younger brother to the Audi A3), which was my first real car, along with all the mental “first real car” aspirations that go along with it. What made the experience so particularly bad was along with expensive repairs as well as regular upkeep, the car had peculiar things that would go wrong with it. VW (both the company and the service departments at MULTIPLE dealerships) would act as if I was being too demanding a customer for asking WHY these things were going wrong, or WHY they couldn’t be fixed at one go!
Needless to say, by the time I got rid of it before starting graduate school, the bloom was off the rose, and my bank account (such as it is) is much happier for it!
I also still keep an eye out for new car models, read about them, think about them, etc., but I go out of my way to explain to people that quite often, with a VW-family automobile, you can’t be quite sure what you’re getting. To be fair, I know some will be great and last forever, but some will be hard-to-recognize lemons. What VW needs to realize is that, at the >$20k expenditure level, I’m sorry, but my loss aversion kicks in pretty strongly! I — and I think most other people — are not willing to be risk-neutral for such big ticket items.
Audi is such a great company. I just loved my old A4. What really happened (in both cases) is that the brand got emotionally charged by personal experience.
Rationally, you know that the rude Audi repair shop (who is most likely independent of the OEM) has very little to do with the company Audi. On a more emotional level I couldnt agree more to your statements – I guess everyone has experienced such anger at call center reps etc. and carried those negative emotions forward to charge negatively charge the brand.
The solution would be for companies to take better ownership of the customer interface. Companies have outsourced so much of their supposedly non-core operations that these problems are allowed to happen. For companies that rely on their brand (very much the case for car companies), they should make sure they can control as much of the customer interface as possible.
That’s an interesting issue. I don’t know what your prescription about it is, but I think that is inherent problem of Mass Production model, which Ford defined as “you can have any color as long as it is black”. Just how many ‘solutions’ have we had about this “customer is king” issue?
In Mass Niche(“Let me paint my color”) economy, where small businesses will be dealing with you, they know and care about you. Not just because you are their ‘customers’, but also because their business is themselves. Maybe I will include this aspect in Mass Niche (http://paragraphr.com/pages/show/11). Thank you for inspiration.
The best approach I’ve seen to this issue was made by a friend of mine to Acura (his engine destroyed itself when the timing belt broke .. a problem corrected in the second release of the car in question):
Two page letter.
Page 1: (describes the incident)
Page 2: starts “I am an engineer at Cincinnati Milacron…” and continues to describe basic standards of testing and consumer notification, saying that Acura did not provide appropriate information .. and asking for a refund on what he had paid.
He got a check by return mail.
(unfortunately this is not a ploy we can all use)
I agree that companies and their employees often seem to be unaware of their effect on customers. I fly a lot (over 100,000 miles per year for several years now), and I have experienced both good and bad service while flying. But I have noticed on several occasions that my emotions overreact to a negative situation in cases where airline personnel fail to provide at least a little bit of sympathy. Just a quick “sorry” or sympathetic smile tends to improve my emotional response. But why should this matter to me? I suspect it is a combination of two major factors: (1) a basic distrust of the airlines (I have a similar attitude when dealing with car dealerships), and (2) a need to feel a human connection at a time when I’m tired, stressed, and alone.
Irrationally yours,
Susan
Yes, empathy is critically important. One time I was on a multistage flight, and lost my ticked for the next leg of the flight while at the layover. I bought a ticket to keep going and went to the counter to sort it out after we arrived. I was annoyed that they did this, they have me in their computer after all.
The desk rep walked up, and I said, “I’ve lost my ticket, and I had to buy another one!” She said, “That sucks!!!”
At that moment, I knew everthing would be all right. I felt a tremendous sense of relief.
Just simple empathy, that’s all.
Most car manufactures foreign and domestic have one common problem that is partly responsible for the problem you and many others experience They have a pay structure that protects the dealerships and manufactures from high payroll costs by paying the majority of people involved on commission Most service writers and technicians at the dealer level get paid only when they sell something you didn’t really need. Warranty repairs are generally not a big money maker for all involved especially when you bring in a car for warranty repairs to a dealer that did not sell you the car. The up sell is where they make all their money and warranty work is generally what they use to get you in the door. The problem gets even worse when business gets slow. The loyal customers that still come in for service make up for the customers that choose to go somewhere else. Repairs that were of questionable importance when they were busy suddenly become an imperative repair when they are slow.
One of the best examples of a company and its employees that don’t have a clear understanding of the effect it has on its customers is eBay. Created based on the belief that people are basically good, Pierre founded eBay in 1995 to create a level playing field for commerce, giving everyone equal access to opportunity, information, and tools. Today, more than 80 million people trust strangers with every transaction, finding common ground where none seemed to exist before. Today that same company and its employees use that power without any consideration of its consequences and the devastating effects they are capable of.
I have personally been buying on eBay since 1999 and selling an average of $65,000 – $75,000 a month for the last several years. My eBay fees for this sales volume is in excess of $6,500 per month and my feedback up until June of 2008 was 99.9% positive with a feedback score of 22,500 positive and less than 12 negatives mostly from non paying bidders.
Last month eBay closed my store and deleted over 10,000 auctions with only 6 hours notice and their reason was that my buyer satisfaction dropped below acceptable levels. What are acceptable levels? Apparently 1% dissatisfied out of 22,500 is not allowed. So overnight with only 6 hours warning from a voicemail message left after 5:00 pm that my seller status would change at midnight an eBay employee with one click deleted a $850,000 a year business.
Then they sent all my customers for the last three months an email telling them not to do business with me and to open a PayPal dispute to demand a refund and at the same time my top seller account manager tells me I should still ship all my orders and fulfill my obligations to the eBay community and if I can get by buyer satisfaction up in the next 30 days without being able to sell anything they might consider reopening my store.
How can a company started for the good of the community end up no better then companies like Enron and Worldcom in the devastation they can cause the very people that support them.
Hey, I created a website with exactly the same name as your post for exactly the same purpose
It may be helpful to remember that people are not “the company”. People are the actors who live within the policies and powers given to them. You aren’t dealing with those people, who probably do have feelings and honour. You are dealing with company, which has no feelings or standards of decency except what is forced upon it by law.
Customer service staff forget that their wages are paid by satisfied customers – UNFORTUNATELY
customer service is becoming a contradiction in terms – an oxymoron! When staff are fired service suffers – train and reward staff for service to customers!
GermanCarDepot.com is the place to go for Independent service and repair for Audi Vehicles.No new car dealer hassles . My father taught me POMG (Peace of mind Guaranteed).Just check out all the reviews for Audi repair shops ,They will speak for there self.