Reputation Management: Life after Death?
Welcome to Reputation Management! In this new series, we’ll explain the oft-mystifying behavior of your local automotive industry—places like car dealers and service shops.
First, we’ll dig into publicly available customer reviews for those businesses. Then we’ll remove the names and discuss the situation from multiple viewpoints, leaning on my years of experience as a—you guessed it—reputation manager.
If we do this right, you should walk away a better, smarter consumer. Let us know what you think in the comments! —Sajeev
These days you can separate new car dealerships into two categories: those owned by private capital and those under a publicly traded company. Both are still franchises subject to the guidelines of their respective automotive manufacturer, suggesting they all operate in a similar manner. But public companies are usually more risk-averse in everything they do, lest investors catch a whiff of trouble and subsequently do things like short the stock.
Not so with the privately held car dealerships. These “private cap” (as in “capital”) stores often have a single person at the top of the food chain, called the dealer principal, whose last name is often plastered on the front of the building. Selling cars is a great family business: city-wide fame, money, localized power, and a never-ending stream of new automobiles are quite the intoxicating mix.
Until they aren’t. Even the legendary Cal Worthington dynasty of private cap dealerships wound up for sale, and I suspect each will be renamed. The sad reality is that families sell their wares to larger groups (both public and private) when second or third generations don’t love the car business nearly as much as the first.
Sometimes the sale is less about the family moving on and more about it being forced into a different set of circumstances. Sometimes a dealer principal’s deeds open the door to a sabbatical at Club Fed. But financial impropriety isn’t nearly as salacious as what we’re about to (tangentially) discuss.
In this episode of Reputation Management, we have a dealership that was rocked to its core because of a murder-for-hire plot by the dealer principal. While the details of the alleged act are much too saddening and inappropriate to discuss here, you can read about them elsewhere. (As of March, 2023, both sides have yet to agree upon a trial date.) We are here for reviews, including the one allegedly left by the dealer principal for the security company he hired to do the deed.
I firmly believe that anyone whose job is to manage the online reputation of a business inevitably leaves a review themselves. But why on earth would a dealer principal leave a review for their alleged mercenaries, using their real name on a public page on Google? The lawyers musta had a field day.
No matter, reviews can be flagged for deletion based on irrelevance. Shortly after news broke of the murder-for-hire plot, irrelevant business reviews for the dealership dogpiled Google. Too bad I didn’t have the foresight to screenshot them. But that’s not the point of this series, so let’s get back to it.
The dealership in question was sold to a publicly traded dealership group. (Full disclosure: I used to work for this public company, but well before this transaction occurred.) Since the name on the dealership’s sign was now mired in controversy, the transfer included a name change. As you’ll see, the new name spurred a distinct change in customer reviews shortly thereafter.
Free oil changes for life, but not YOUR life
The transition to a public dealership is often invisible to the customer, as the front-line staff usually sticks around and most policies stay in effect. And what of the free perks offered by the last owner? Unless mandated by the OEM or common sense (i.e. coffee in waiting rooms, free wi-fi, etc.), those benefits are usually the first things to go.
Offering free oil changes is a poor business practice, and larger private/public groups already know this. Luckily these large organizations have the cash on hand to entice customers via other methods, usually with cheap oil-change coupons and more aggressive discounting by the sales department’s internet sales managers from the get-go. Free oil changes aren’t free, anyway; their cost was likely “baked into” every deal with an obscure dealer fee and/or less aggressive discounting.
But no matter how you skin it, no customer likes being sold a false bill of goods. The public companies will deal with the blowback (i.e. they stash cash to weather storms like this) and just apologize profusely. Do yourself a favor and never buy into the program in the first place. Get a service contract through the OEM instead: A Honda dealership may cash out, but Honda Motor will always(?) honor its commitments.
PR-friendly replies—not necessarily a bad thing?
The carefully worded response here is key, as a public dealership group has no tolerance for screenshots of its testy replies being screenshotted and sent to local media. If enough bad news gets published, reporters might smell a story. And if enough stories get published, a Wall Street type may find them and pose a “gotcha” question during an earnings call.
Saying “sorry” in a well-crafted reply is consequence-free (legally speaking, as I once discussed this with in-house council) and it lets everyone know that things are gonna different with the new owner. Different may not equate to better, but that’s in the eye of the beholder.
Here’s the counterpoint: This review is just begging for a testy response from an owner. The feedback isn’t likely from a customer, just someone who thinks it is okay to ding a business’ rating with a complaint about that company’s advertisements. Public companies will write something carefully worded, including an apology and a promise to review the problem with senior managers. However, this review was written years before this dealership’s sale to its new owner.
Of course, the previous owner couldn’t resist taking the bait. You’ll never (rarely?) hear a publicly held dealership tell someone on the internet to “grow up.” It’s just bad optics, and C-suite executives have no tolerance for it. Manufacturers may not see the taunt, but no OEM wants its brand associated with childish replies. Which is why there are reputation managers monitoring the situation at the store or dealer group level, who will run a situation up the ladder when needed.
Big business, big waiting lines
Be they private or public, the bigger dealer groups have learned to treat service departments like waiting areas in a doctor’s office. It’s the easiest way to turn a money-making department into a money-printing service, as repair/service centers generally make more money than any other part of the dealership. (Pandemic-era vehicle pricing notwithstanding.)
Back to the doctor’s office analogy: just because you have an appointment at 8:30 am to see Dr. Whatshisface doesn’t mean he’s plopping you on the exam table at that moment in time. No, you fill out paperwork, wait your turn, and deal with awful TV programs, magazines, etc. like everyone else in the lobby. At least at the dealership there’s usually faster wi-fi, acidic coffee, mediocre donuts, and new cars.
Cramming the service drive with customers isn’t a big deal if the dealership offers a freestanding facility for quick things like oil changes, as popularized by Ford’s Quick Lane. Such implementations act like triage in a hospital’s emergency room, expediting service by evaluating the problem and routing the vehicle to the appropriate place. If vehicles with short- and long-duration service needs are going into the same repair facility, that’s a recipe for bad customer reviews, especially at high-traffic times. We’ll discuss this situation further in the last example.
But “stackin’ em deep” in the service lane usually means a dealership is also “sellin’ them cheap.” Oil changes are sometimes performed at cost, tires may have a price-match guarantee, and the dealer’s service team may even honor coupons from other local businesses. It’s all in the name of getting you in the door, so they can perform a complimentary inspection and give you a printout with red/yellow/green indicators on key wear items on your vehicle. That’s how you get upsold, and those higher-margin parts and service tasks are how a dealer makes money.
It’s still luck of the draw
If you’re one of those people that gets nervous and/or frustrated upon visiting a service department, reviews like this are one reason why. You don’t know what kind of service you’ll get on your visit, and that’s a terrible feeling. Staffing levels, employee morale, repair equipment quality, and availability of everything in the supply chain make all the difference. If a dealer gets each one right, vehicles can enter/leave quickly. Get any one wrong and the 1-star reviews roll in like clockwork. Put the odds in your favor: Get to know the people behind the desks. Your visits will be happier, and maybe even cheaper.
Well, until that wheel-balancing machine they’ve neglected to upgrade finally bites the dust. Or until your newfound friends have a beef with management, quit their job, and cherry-pick the most amiable coworkers to join them at their next gig. Or countless other scenarios, as what you can imagine has probably already happened at a car dealership. Any of these situations may happen at a public or at a private dealership, as both run on fine-tuned budgets, and their staff do not necessarily get what they need in a timely fashion.
The Reputation Manager’s plight?
This installment in our series is probably my favorite example of why reputation managers exist in the first place. When a retail-focused company buys a distressed asset, the new owners are likely to infuriate people for multiple reasons. Add in a media frenzy behind a murder-for-hire plot? Things get even worse—but only in the short term.
Even before the dealership’s sale is official, reputation managers wind up monitoring places like Google, Yelp, Facebook, and even Glassdoor to size up just how much work is ahead of them. Getting access to the accounts (so they can reply to people and update information) is sometimes difficult. I lost count of how many times a dealer had to beg a recently fired employee to fork over the username and password for the Google/Gmail account that possessed the keys to their digital marketing castle (as it were).
But once the new owners are in full control, the emails to managers tasked with local customer support start flying. At some point critical mass is achieved, and one reply can work for multiple complaints. Here’s an example: “Sorry we screwed up, can you call or email me so I can personally assist? My name is so-and-so and I am some-type-of manager. I am new here and I want to make this right.”
Properly addressing customer complaints is a lot of work, but it proves that there is life after death in the car business. Do it right and a distressed car dealership will come to life much quicker. Do it wrong and reputations get real messy, real fast. And that’s precisely what we will discuss in our next installment.
What did you think of Reputation Management? Was this a good use of your valuable time? Would you like to see more—and if so, anything you’d change or add?
We’re always open to suggestions from the Hagerty Community, and if there’s a type of business you want to discuss, odds are we can find it online. Tell us what you think in the comments!