Monday, April 25, 2011

What You See Isn’t Always What You Get with Businesses... Especially Car Dealers

There’s a new catch phrase among businesses, “Reputation Management”. In fact, auto manufacturers are advising their dealers on ways to improve Internet surveys that are springing up all over. Probably the biggest one is Google that displays customers’ reviews of virtually every business. The manufacturers’ advice is to solicit as many happy customers as possible to overwhelm the negative reviews that are posted. There are also companies that specialize in doing exactly this…contacting large numbers of customers and persuading them to post positive reviews for a particular business. The theory is that a happy customer is less likely to respond to a survey than an unhappy one. That’s not entirely true. The fact is that a very happy customer is just as inclined to respond to a survey as a very unhappy one. The customers that are less inclined to respond to surveys are those that are “sort of” happy or “sort of” unhappy. The honest way to get lots of positive surveys is to make more customers very happy.

There was an interesting column in last Sunday’s NY Times by “The Haggler” entitled “A Customer Who’s Always Satisfied”. The reporter discovered that companies were hiring a company named “Homestead Technologies” (owned by Intuit) that sold a special software program to businesses that wanted to improve their reputations. This software program was comprised of a website template that companies filled out with customers’ names and positive reviews. The way the reporter discovered the scam was that some companies weren’t changing the names in the template. This fake name was “Lucas Fayne” and when the reporter Googled that name, he found that Lucas had given very positive Internet reviews to more than 50 roofing companies all over the USA. Each review said the same thing! There are many companies like that selling their deceptive services to companies that treat their customers badly but want to have good reviews anyway. One tipoff is finding one company that has an extraordinarily large number of reviews compared to their competition.

Another common scam by car dealers is to make their surveys look good is by making up customers’ email addresses. Rather than report a customer’s real email address, the dealers make one up using free email services like Hotmail and Yahoo. The survey from the auto manufacturer comes to the dealership address and then the salesman or sales manager fills out the survey. A variation of this scam is for the dealer to give incorrect email addresses to the manufacturer for customers he knows are dissatisfied. Some manufacturers police this by determining what computer the survey originated from by identifying the IP address. For example, my PC’s IP address is 66.176.54.44. If Toyota found out that hundreds of customer surveys were coming from that address, they might be a little suspicious. But most dealers are way ahead of the manufactures on this. There is software obtainable on the Internet that disguises the IP address of your PC.

Less sophisticated car dealers resort to simple bribery. “When you get your survey from the manufacturer, bring it into the dealership in blank and we’ll give you a free tank of gas”.

My dealership’s rating by the Better Business Bureau is A+ which is the highest rating obtainable. I don’t advertise this or mention it to my customers because it really doesn’t mean anything to me. Why? Because many dealers have high rating by the BBB that clearly don’t deserve it. Businesses pay dues to be members of the BBB and the BBB is hard pressed to give a bad rating to the people that pay their salaries. The businesses and dealers who “don’t join” the BBB are the ones who get the lower ratings. After this was exposed by the press recently, the BBB is claiming to come up with a more honest approach to rating companies.

One might ask, how does “reputation management” by bribery and deception continue to propagate when it’s so painfully apparent? The answer is “money” and corporate bureaucracy. The CEO of a large business including auto manufacturers probably would like their dealers to treat their customers with courtesy, respect, and integrity. He thinks that the best way to accomplish this is to incentivize and measure his subordinates, all the way down the long line, by how good the customer’s surveys look. When a vice president’s annual bonus or chances for promotion hinge on customer satisfaction scores, he’s not going to investigate the accuracy of good surveys too closely. His philosophy is to get those customer satisfaction scores up “any way you can”. I can remember one occasion when I questioned a particular dealer’s scores because they were a perfect 100%. I think you can agree that no one or no company is perfect and that dealer wasn’t either, as it turned out.

What the manufacturers and the dealers should understand it that it’s not the customer satisfaction scores that make or break you…it’s the individual customer. The power of one very happy customer is almost beyond imagination and so is the power of one unhappy customer. I liken a customer’s experience to a “pebble dropped into an infinite pond”. The ripples go on forever. You can fool a lot of people for a short time with phony scores on the Internet, the manufactures’’ surveys, or the BBB. But when you trick a customer into doing business with you and you don’t live up to the score, she will never return and she will tell all of her friends.

1 comment:

  1. Well, Mr. Stewart, I would like it if you disclosed your email address. What i wanted to tell you was that your company has my attention even though I have purchased nothing from you YET. What I wish to complain about is your company's email that I regularly get. It almost never talks about the Prius or Prius sales. My take is that your company publishes what you would like to sell to us. Personally, I am only interested in following your sales on Prius. I live on SS and when I buy a new Prius, it will be because the price is extraordinary for the model I would enjoy driving.

    Please always have a section on your email blog about the Prius. Thank you.

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