Lemon Cars
Ah, I love the smell of citrus. Just not in the late evening in the pitch dark on a country road in the middle of nowhere heading into an apocalypse.
“Cars are driven by people, the guiding principle behind everything made at Volvo, therefore is, and must remain – safety. When you are behind the wheel of a Volvo you know that over 70 years of research & knowledge has been engineered to maximize you & your family’s safety. Volvo for life.”
Or so says the advertising for Volvo. I’m sure BMW, Chrysler, Ford and GM would all make similar claims. It doesn’t matter which manufacturer, which country, which model – despite all the process controls, automation and standards, no car maker anywhere is immune to the possibility of turning out a defective vehicle occasionally.
This in and of itself is not damnation. How the car manufacturer responds, however, to the suggestion a particular motor vehicle is a lemon, is the problem.
Most lemon laws pertain to second-hand vehicles, for the very reason that our expectation as customers (and regulators) is that new vehicles should be free of faults. That’s why they cost the big bucks – the consumer is buying reliability, safety and trust.
If you buy a faulty product from any major retailer – Wal-Mart, Target, Myer, Havey Norman or Kmart – they don’t inconvenience their customers by telling them to wait while it is fixed – they replace it. Immediately. End of story.
One would think with something that carries the lives of customers, on which we so depend and more importantly, that sells itself on safety as a feature, a swift response by the manufacturer to resolve the issue is warranted. In fact, if safety is indeed so important, wouldn’t you think the first thing they would want to do is get the lemon off the road?
While most manufacturers protect their branding and customer loyalty by immediately replacing a faulty product without further inconvenience to the customer, car makers – even the likes of Volvo and BMW – consistently fight the complaint. They punish the very people who valued their brand to start with. They destroy that potentially lifetime relationship, deter future customers, and destroy their own image in the process. This story, Bitter BMW owner’s peak-hour protest, is just the tip of the iceberg.
RESPONSE MATTERS. It matters more than anything else you can do. It will give you an ROI on the global investment in brand management second-to-none. This is especially so if you are claiming safety and quality as brand values.
If you do, and then leave a customer driving a defective vehicle, this is probably the most damaging thing a manufacturer could do to its reputation. Further, this kind of arrogance – the implication that their profit numbers are more important than the lives of their drivers – shows complete disdain for the consumer.
Across the United States, existing lemon laws are being expanded. Writing in NJBiz, Andrew Kitchenman reports that a new law passed by the New Jersey state Assembly on June 18, 2009, will expand the number of miles consumers can drive a car and still be reimbursed for problems.
The “lemon law” expansion will allow car buyers to drive 24,000 miles and still make a claim – 6,000 miles more than the current limit.
The law also will require dealers and manufacturers to reimburse buyers the cost of the car if they aren’t able to repair a life-threatening problem the first time; carmakers currently have up to three opportunities to repair the problem.
New Jersey Coalition of Automotive Retailers President James B. Appleton said dealers serve as the advocate for buyers in these situations. The association didn’t take a position on the bill, which was opposed by the Alliance of Automobile Manufacturers.
Mr Appleton, really? That must be unique to the United States, because our experience in Australia is entirely different. Given the interface between a customer and a brand is the dealer, the length that dealers go to in denying and fighting the customer’s dissatisfaction with a clear lemon border on the extreme. Most all states in Australia have what is termed, statutory warranty. It means that new products are required to perform as expected, or they should be replaced or refunded.
Writing in the Sunday Herald Sun (Australia) in 2004, Fiona Stewart reported that car manufacturers and dealers are the most complained about industry, according to a survey by a consumer website. The site, NotGoodEnough.org, found automotive companies attracted a higher number of complaints than even banks.
If car dealers acted as advocates for customers instead of their manufacturers, they would achieve a great deal more for their reputation, and the viability (and proftability) of their business over the long term.
The problem for Australian consumers arises out of the lack of definition of lemon. Some states say it is three repair attempts, some driving organisations say four. Clearly what is needed is a national definition of lemon product that applies across all manufactured items and specifically expensive items such as cars and computers.
Of course, Kitchenman’s article was headlined: “Lemon law” expansion hurts new-car makers. The fact is, fighting a lemon claim is far more damaging and costly for both the dealer and manufacturer.
Can someone tell me why it is car companies still don’t seem to understand this? RESPONSE MATTERS! And let me tell you, tinkering with the dud is not the right response.
If your product or service starts to exude a certain aroma, don’t inconvenience the sucker holding the short end of the stick any further. Don’t force them to bring the lemon back and back and back and back and back and back and back for bandaids.
Every trip is an inconvenience, a time waster, a distraction. Every trip erodes trust. Every trip drives the customer further away from your brand.
In these days of analysis and measurement, it is common knowledge that keeping a customer is significantly cheaper than acquiring a new one. We know the value of word-of-mouth referrals far exceeds the millions you spend on advertising, and we certainly now know the power of the Internet as a media channel.
To all car manufacturers with lemons out there: Stop wasting everyone’s time and putting lives on the line. Put the car in intensive care and send the customer home with a new car. It is not only the least you can do, it is the least expensive thing you can do.
Take all the time you need to fix the lemon. For good. Paint it if you have to (yellow is not that cool a colour), and once fixed, use it as a courtesy car.
The point is, if you think it is so good, YOU KEEP IT!
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Category: Reputation Management, Sin & Spin
This is so true; the comment ‘RESPONSE MATTERS’ really strikes a marketing chord with me. What better way to win a loyal customer and to set them off broadcasting positive messages about your brand than to simply react properly, decently, honestly, politely and promptly? After all, manufacturers will have to deal with the problem eventually, so wjhy not take the quick route and turn a negative into a positive. Instead of making a negative into a complete bloody disaster…
Did you catch the story today about Apple refusing to replace an exploding iPod until the kid had signed a NDA?
Thanks for the comment Richard. I still find myself explaining to clients over and over how important this is. Email suggested stories to: editor (at) reputationreport (dot) com (dot) au. Thanks!