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Monday, June 27, 2011

I’m Sorry, but Your Car Is out of Warranty

Most everyone has heard these words, “I’m sorry but you’ll have to pay for this repair because your car is out of the manufacturer’s warranty”. What should you do say or do? Obviously, we’re not talking about cars that are “way out” of warranty. A ten year old vehicle with 200,000 miles that has a 3 year or a 36,000 warranty will not be repaired free by your dealer or manufacturer. However, for cars those that are “close” to being within the warranty time and mileage there is a good chance that you can persuade the dealer/manufacturer to pay at least a portion of the cost of repair. This article is designed to tell you how best to do accomplish this.

The easiest way to have your car repaired at no cost is if you initially brought the vehicle in for a problem while it was still under warranty, the dealer “attempted” to fix it, but did not. When the problem resurfaces, as long as you have in writing and on the record that this happened, you should have no problem getting your car repaired at no charge.

To the lesser degree that your car is out of warranty, the greater is your chance of having the factory authorize a “goodwill” repair. Goodwill is what they call all repairs made at no charge when the car is out of warranty. If you car is only 5 miles out of warranty, this should be very easy to have approved. The further out of warranty, the more difficult this is and the less likely that you will have 100% of the cost paid by the manufacturer. For example, a car that’s 3,000 miles out of a 36,000 mile warranty may be granted just 50% of the cost of the repair under goodwill.

It’s important to understand that the dealer often has no say in whether an out of warranty car can be repaired under goodwill. A good dealer should support your request for goodwill because he gets paid by the manufacturer for doing the repair and this make his customer happy. A bad dealer might not support your goodwill request because he would like to charge you more for the repair than the warranty will allow. A dealer can charge you anything he wants for parts and labor but the factory allows him only his approved warranty labor rate, markup on parts, and time to complete the repair. If a dealer is reluctant to support your request for goodwill, be sure to take your request all the way to top. Take it to the service manager, then to the general manager, and then to the owner. If the dealer won’t support you, try taking it to another dealer who will. It’s very important that you have the support of the dealer when you take your request to the manufacturer. Without it, it’s highly unlikely you will get help.

Some dealers are granted the authority to make goodwill adjustments directly as well as making decisions as to whether a repair should be covered under warranty. This can be good and bad. As I said earlier, a dealer can have an ulterior motive for not want to repair you car under warranty…he can make more money if he makes you pay. A dealer who is authorized to make warranty/goodwill decisions is so authorized because he has kept his warranty and goodwill costs low. This is bad for the customer if the way he has kept them low is by denying legitimate claims to make himself look good in the eyes of the factory. To some service managers, it’s more important to be popular with the factory than with the dealer he works for. You want a service manager who works for a good dealer and whose loyalty is with that dealer who will be for his customers.

Manufacturers and dealers will favor those customers who have bought cars from them and had their cars serviced with them. The dealer/manufacturer has your entire sales and service history on their computer. If you have bought 2 or more cars of this make and had them serviced regularly by the dealers of that make, they will “stretch” on the warranty coverage and goodwill.

When asking for repairs for your car that is out of warranty, be courteous, factual, and as brief as possible. Never threaten to take your business away, sue, or call the media. Never raise your voice or curse. Dealership and factory employees are just like you…they tend to respond more positively to someone who is courteous and rational. You should put your request in writing, email or regular mail. If things are moving too slowly, it’s a good idea to call the factory 800 customer assistance number. Your request will be referred back to the dealer, but it’s good to be on record with the factory.

When encountering difficulties, go on your PC and Google your repair problem. Google will direct you to chat rooms and other sources of information about people who have the same problem. You will be amazed at the number of people who have had the same problem. Sometimes even your dealer may not be aware that this repair is common among owners of the year, make and model. Knowing this gives you a strong psychological advantage.

When you Google your repair problem, you may find out that the manufacturer has issued a notice to their dealers about this problem. This kind of notice is referred to as TSB or Technical Service Bulletin. Sometime s TSB will authorize the dealer to repair the car under warranty but only if the customer asks! You may even learn that this repair is covered under a recall campaign, but the dealer should have now that when he checked your VIN in his computer.
The bottom line is don’t just take “no” for an answer. Go through the steps that I’ve covered above and you should have a pretty good chance of getting at least some of your repair paid for by the manufacturer.

Monday, June 20, 2011

I Prefer my Customers’ Complaints to Compliments

The July 2011 edition of Consumer Reports has a great article entitled, “What’s wrong with customer service?” Consumer Reports conducted a survey to find “the customer-service problems that infuriate people most.” The number one complaint is “Can’t get a human on phone”. One of the pieces of advice in the article was to contact the CEO’s office of the company that is giving you the problem. They say that “They want their problem solved before it reaches them. But when top executives hear from an unhappy customer, they’ll often be sure that person receives a response”.

Of course getting the CEO of any company on the phone is easier said than done. I agree that top executives “want their problems solved before it reaches them”, but that sword cuts both ways. Often employees “protect” their top executives and, of course, protect themselves at the same time by not allowing customers to climb into the ivory tower.

It ‘s unfortunately true that the owners and top executives of businesses often care more about customer satisfaction than many of those who report to them. This is true because owners and top executives’ careers and fortunes are more directly related to their company’s overall success. They are also more likely to see the big picture of how important their company’s brand image, largely dependent on customer satisfaction, is critical to its success. Last but not least executives have far more power to remedy a customer complaint than their subordinates.

The problem is that most owners and executives exist in a “Disney World” created for them by their subordinates in which all of their customers love their company. They rarely, if ever, hear from or even see any of their customers. After all, why take the time when everything is humming along marvelously? What they do see and hear are reports from their subordinates telling them how happy their customers are. They read these reports on their computers and it’s reinforced verbally in management meetings. The only thing they hear from their customers is what their underlings what them to see and hear. This policy is easy to understand. Nobody likes to hear complaints or be shouted at but we all love to hear compliments. The subordinate is well aware that his boss looks at a customer complaint as a failure by that subordinate. What better way to make himself look better for his next evaluation than to allow his boss to hear no complaints from angry customers?

There is only one way that a boss can find out what’s really going on and that’s by communicating directly with his customers…not reading reports or speaking to just those customers his employees allow to pass through their filter. An owner or CEO has to make himself totally accessible to his customers. Every customer must be able to contact him for whatever reason. Now this is too frightening for most top executives to even contemplate. I have to confess that it even frightened me when I first tried it. Needless to say, I was highly advised not to do such a thing by virtually everyone who worked for me. But looking back on that move several years ago, it was the best business decision I ever made. It not only caused my customers’ satisfaction to soar, but it raised my company’s sales and profits to record levels. It has made my car dealership the largest in Palm Beach County, Florida, 7th in the Southeast USA and 31st in America.

It all started with one red phone that I placed in the center of my dealership’s showroom. Next to the red phone (inspired by the Kennedy-Khrushchev red phone of cold war fame), is a sign with my picture on it that says “CUSTOMER HOTLINE to Earl Stewart. The buck stops here. Have we not exceeded your expectations? Then please let me know. Simply pick up the receiver and wait for me to answer.” This worked so well that over the years I added three more red phones. They’re located next to the service cashier, in the service drive, and in the body shop. When anybody picks up the receiver, they are automatically connected to my cell phone, no dialing required. I carry my red cell phone with me seven days a week and turn my phone off only when I go to bed at night. I have a special ring for hotline calls so that I can prioritize answering them. This includes while I’m at a restaurant eating or in the shower (yes I will get out of the shower to answer a hotline call. I’ll even answer my hotline when I’m in my boat fishing.

Probably the most common question I get is “How many calls do you get every day?” I get surprisingly few when you consider the size of my company. I have tens of thousands of customers but I average about only a half dozen calls each day. Many of my hotline calls are “I just wanted to see if you would really answer” and I also get compliments on my hotline. I believe that the reason I get so few calls is that the red phone has become a deterrent to making my customers unhappy or failing to resolve a problem when it occurs. When one of my employees sees a customer walking toward one of the red phones, he will do everything possible to make that customer happy.

I take direct communication with my customers to an even higher level. I give all of my customers my business card with my home and personal cell phone numbers. My wife, Nancy, got very nervous when we first added the home number, but we were both pleasantly surprised how respectful and trusting our customers are. We get very few calls at home, but when we do, we are glad the customer called because it’s usually very important. I also expand direct customer communication to all of my employees. No manager in our company has a secretary or assistant to take his calls…all calls go directly to him. Our telephone receptionist never asks, “May I say who is calling?” or “May I ask the nature of your call?” If that employee is not in, the call is automatically put through to his cell phone. But wait, there’s more! We have a real live person answering our phone after hours, 24/7, and if there’s an emergency, the person in my company that can handle it is contacted…even in the middle of the night. If it’s not an emergency, the message is given to the appropriate employees via email.

I’ve learned more about my business from my customers in the last ten year than I learned in the 40+ years that I’ve been a car dealer. When my customers call me with a complaint they are often apologetic because they are so unused to speaking with the owner of a business. I always say, “Please don’t apologize. I should be thanking you for taking your time to call me. You’re allowing me to correct a process and/or coach an employee in my company to ensure that this same thing doesn’t happen to another one of my customers. The only complaint that I fear is the one that I don’t hear because I’m helpless to correct the process or employee who was

Monday, June 13, 2011

Always Get It in Writing

Many readers of this column call me for advice and to tell me horror stories about their dealing with unethical car dealers. Of course it would be much better had these readers called me before they bought the car.

I have written over 200 columns for Hometown News and given advice on a variety of subjects which should make your car buying, or servicing, experience safer and more pleasant. There is one piece of advice which, if strictly followed, would eliminate over 90% of the problems car buyers have with car dealers. That advice is “always insist that all promises and commitments made by the car sales person or sales manager are put in writing”. The written commitments should be signed by the sales person/manager and you and you should retain a copy.

These are just some examples of promises made by sales people and sales managers that were not kept: (1) Sign the contract, drive the car home, and if you change your mind within three days you can bring the car back and we will refund all of your money. [When the customer brought the car back, the salesman claimed he never said any such thing] (2) After signing a 36 month lease, the salesman assured this customer that, if she got tired of this car in less than 36 months, she could just bring it back anytime. [Of course the leasing company didn’t agree with the salesman on this]. A customer was promised that she would be able to get free loaner cars anytime she brought her car in for service. [The service department didn’t know anything about this. They don’t offer free loaners]. The business manager, also known as the F&I manager, told the customer that the warranty/extended service contract he was selling her covered 100% of anything that went wrong with her car. [When she came in for a brake job, the service manager showed her the fine print in the warranty contract that said maintenance items were not covered]. The salesman told the customer not to trade his car in on the new car because he owed way more on the car than it was worth. He told him to just let the bank take her old car back and because she was making her payments on time on her new car it wouldn’t harm her credit rating. [I don’t think this requires any explanation]. Customers are promised that they can bring their car back after they buy it and have CD players, leather, running boards, and floor mats, and other accessories installed as part of the deal. When they come back, none of the managers knows about this and the salesman can’t be found or doesn’t “remember”. I could list dozens more of these anecdotes.

You have very little chance when it’s your word against the salesman’s or sales manager’s. You have even less of a chance if it’s two against one. Do not be timid about asking that everything you are promised is put into writing. If the salesman objects to this or hesitates, you have to ask yourself why? Another reason for having all promises committed to writing is that the salesman or sales manager may not work at that dealership anymore when you come back to collect on his promise. He may have actually been sincere, but now he’s gone. Will his replacement believe you?

It’s a good idea to carry a note pad with you when you are negotiating to buy a car. I wrote a previous column entitled “Never Go Car Shopping Alone”. When you have an ally with you, she can take notes while you are negotiating. Also, if you do forget to commit a promise to writing, your credibility is enhanced when it’s two against one instead of “he said/she said”. When you are signing the final documents, you have your complete set of notes detailing promises, assurances, and commitments by the salesman. Then, all you have to do is have these signed by both parties and be sure that you get a copy.