Reputation ManagementCommentary & Insights

Reputation Management
Let The Government Be Your Customer Service Department!

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Three super-large dealership groups are trying it!   Here’s how it’s going for them so far… Carvana lost the ability to transact in Illinois according to  Automotive News  (May 16, 2022) because, “The Secretary of State's police department opened an investigation into consumer complaints about Carvana in February, (Henry) Haupt told  Automotive News . The investigation spans about 90 signed complaints, Haupt said. He said he couldn't provide an exact date as to when Carvana might see the suspension lifted.” According to a press release from the Texas Attorney General’s Office: “Texas Attorney General Ken Paxton filed a deceptive trade practices lawsuit against the online used vehicle dealer Vroom Automotive LLC and Vroom Inc., which also sells cars to Texas consumers under the name Texas Direct Auto. The lawsuit alleges that Vroom has misrepresented and failed to disclose significant delays in transferring clear title and obtaining vehicle registrations, burdening thousands of consumers. The State also alleges that Vroom has misrepresented and failed to disclose vehicle history and condition and terms of financing and approval—all violations of the Texas Deceptive Trade Practices Consumer Protection Act. According to the lawsuit, Vroom has not managed its growth effectively, leading to inadequate systems and procedures that have harmed Texas consumers.  Over the last three years, consumers have filed over 5,000 complaints with both the Better Business Bureau and the Office of the Attorney General against Vroom and Texas Direct Auto.”  According to the Federal Trade Commission’s (FTC) Press Release dated April 1, 2022: “The Federal Trade Commission and the State of Illinois are taking  action against Napleton , a large, multistate auto dealer group based in Illinois, for sneaking illegal junk fees for unwanted “add-ons” onto customers’ bills and for discriminating against Black consumers by charging them more for financing.  Napleton will pay $10 million  to settle the lawsuit brought by the FTC and the State of Illinois, a record-setting monetary judgment for an FTC auto lending case… A survey cited in the complaint showed that 83 percent of buyers from the dealerships were charged junk fees for add-ons without authorization or as a result of deception. One consumer cited in the complaint reported that the dealership located in Arlington Heights, Ill., charged him for nearly $4,000 in add-on fees after he’d paid a similar amount in down payment.” So, from the outside looking in, it appears these three (3) organizations do not have procedures in place to handle their customer queries, issues, and problems. So, by default, by attrition, or by apathy, they are ceding control and allowing the regulators to fine them and suspend them, thereby driving the dealerships to manage their own business affairs. (Good pun, right?)                                                                                                                 In the Napleton matter, a staggering 83 percent of buyers said Napleton took advantage of them. Let’s examine that statistic even further. In order to gather the information about the 83 percent, Napleton had to allow the FTC to have access to its customer files.  The FTC must have had quite a lot of leverage for Napleton to agree to give them that access.  Further, 83 percent cannot be simply “miscommunications” or “misunderstandings.”  It’s an astonishing number which cannot be explained away. Let’s keep this simple: Handle your customers or the government will.  
Oops They Did It Again

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Oops, they did it again.  I just unpacked my new desktop computer, screens, camera, and enough cables for you, me, and every adult on the planet. (Well, not quite but definitely an abundance!) Along with my new goodies, I purchased, and I quote, the “Download Microsoft Office Home and Business 2021 All Languages Online Product Key License 1 License.” (Please note “Business” is part of the title here.)  So, when I bought this, I had an expectation I could use it for my WORK as a consultant, because I run a “Business.” When downloading the product, it wouldn’t sync with my Outlook. At. All. (There’s no telling how many times I attempted this with different variations and permutations.)    After six (6) hours on the telephone and online chats with Dell and Microsoft “support,” and my web host provider, I learned I had purchased the wrong product. After much typing and chatting and phoning, I finally learned from these fine folks, you see, “Business” doesn’t actually mean I am able to use it for a “business,” because I was informed that “Business” is really the “Home” version. Insanely aggravating, right?  Silly me, I thought the word “Business,” actually meant you could use it for a business. The software I purchased was $229.24 for a one-time charge but now Microsoft told me the new price for you know – business business - was $99 per year. Honestly, after six (6) hours struggling with tech support, I really didn’t care, I just wanted this nightmare to end. (Doesn’t that sound like a customer coming out of F&I after a long transaction?) And please allow me to mention I resent the word “support” here because none was given!     My Microsoft situation is a textbook bait and switch advertising ploy and is in breach of federal laws. I’m sure Microsoft has plenty of lawyers to argue about this. (By the way, if you’re a class action lawyer looking for a new case, Microsoft might be your next target…) This story illustrates two (2) important considerations in running your store: 1.     If you are having customers accuse you of bait and switch advertising, examine both your website and your other ads, including television, radio, internet etc. (Have you, as the dealer, looked at your online reviews recently? This is a terrific way for you to “listen” to customer feedback.)  If the terms are not “clear and conspicuous,” then likely the ad would be considered deceptive in some way. Because of competitive pressures, I know some dealers who advertise this way intentionally (so BEWARE!) and some who do it unintentionally. Either way, if you pay attention to Joe Public’s feedback, you will learn about process kinks at your store, and you can improve on procedures and avoid false advertising accusations and problems.   2.     In my experience, there is (almost) always a disconnect between the advertising and the sales staff, which leads to claims of bait and switch. The ad agency or in-house ad person should be training the sales staff on advertising specials and how terms were calculated mathematically. When Sally arrives at the lot and requests the advertised deal, then the sales person should be able to articulate clearly “how the deal works” and understand how to communicate this to Sally courteously and effectively. Otherwise, when Sally is told she cannot get the deal, (for whatever reason the sales agent creates), she will be (rightfully) upset. This is a classic scenario where the dealership can make improvements and avoid pitfalls by conveying information to the customer clearly and concisely. This potential negative situation occurs when the sales agent simply doesn’t have the information to properly do their job.This is easily fixed through training.   There are both federal enforcement agencies concerned with these issues, as well as the state Attorneys General.  As an example, Pennsylvania’s Attorney General, Josh Shapiro issued an advisory on March 3, 2022 warning of unfair and deceptive practices which violate the Pennsylvania Consumer Protection Law. Here are three (3) salient points specifically about dealers directly from his advisory: Represent and advertise goods or services at their actual price, comply with the terms of warranties given to the buyer; and not engage in fraudulent or deceptive conduct which creates a likelihood of confusion or misunderstanding. Sell a motor vehicle under the terms or conditions, including price or warranty, which a motor vehicle manufacturer or dealer has advertised or otherwise represented. Disclose any hidden charges in any advertised price of a vehicle, as well as the expiration date of any advertised price. Don’t be the dealer who ends up saying: “Oops!...I did it again, I played with your heart, Got lost in the game…”  It didn’t go well for Brittany Spears in 2007 and it won’t go well for your business either.  If your sales staff gets lost in the game, and plays with customers’ heart, you are going to create irate prospects, which (1) you won’t sell, so you will lose the sale and, (2) even worse, these bait and switch behaviors will attract regulators and lawyers.   Then, it’ll be your “Oops,” which will lead to a hefty fine, lawsuit, or worse…both!
high risk
Dealer Risk Mitigation: Expectations & The Fountain of Youth

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My buddy, Tom, recently visited St. Augustine, Florida and he was kind enough to bring us souvenirs. No, my fiancé and I didn’t get t-shirts. We got something a heck of a lot better than that! We were gifted tiny tourist miracles from Ponce de Leon’s THE FOUNTAIN OF YOUTH! In personalized bottles! That’s life-changing, right? Well, I thought it was awesome until I flipped over the bottle and discovered it was “Made in China.” WAIT, WHAT? Then, we were sad. Our hopes and expectations of eternal youth – dashed. This was a kitschy, little reminder that things don’t always turn out as you want them to or as advertised. Sometimes things turn out worse than you thought and sometimes, though not as often, they turn out better.   And so, when you get a regulatory letter saying the dealership has made customer or advertising mistakes requiring immediate correction, often your expectations start with dread and large dollar signs. That eventuality could happen. However, with proper care and diligence, you can settle the issue(s) quickly. Most often, these regulatory issues start one of three ways:  A customer problem An employee issue Advertising violation(s) Be vigilant on these three (3) issues. They should be front and center in keeping you out of trouble. There are plenty of risk mitigation strategies to prevent problems, covered in a subsequent article. Risk mitigation is an ongoing, everyday practice that requires continuous improvement activity.  So, when you receive a letter, administrative action, lawsuit, subpoena, or a formal request for documents, from a regulator, read the paperwork with great care. Sometimes the magic is in the wording of the allegations. Please read it and set it aside for the moment. Building the Story Next, research the problem. Interview the parties involved. Take clear notes as the nuance of the story matters. If the alleged violation is customer or advertising-based, pull the file and review it carefully. Do all of the signatures in the file look consistent? Or may someone have forged a signature? Build the story of what actually happened by reconstructing the detail, step by step, and commit to recording this for yourself to have a chronological record of what happened. Be sure to include direct quotes from the witnesses in your chronology.  Now, refer back to the original allegations to determine what holes are left in the story. Try to unearth the details relating to those holes. Re-interview as needed. Taking good notes is critical! Effective Risk Mitigation Contact your risk mitigation expert and determine if the charge could be covered by your insurance policy. Consider this carefully. Depending on the dollars involved and the nature of the complaint, insurance company adjustors can make the matter more complex and time-consuming. This is an expansive question, so this will be a future article, as well.   Most “complaints” have deadlines. Just be aware of this and ensure you are responding promptly. At this point, I advocate contacting the regulator directly and having a friendly chat. Find out what he/she is looking for. If the problem was related to a consumer or employee, resolving it may be as simple as satisfying their concerns. If it is advertising-related, I can assure you it won’t be that simple. During that call, be positive, be professional, and assure him/her that you want to resolve the issue. Ask for permission to ask questions. Grab your chronology and ask questions to try to fill in the gaps where the allegations do not make any sense. Go slowly and listen carefully as the regulator may or may not have the correct information.  If the regulator has bad information where you can prove the allegation is incorrect, gently offer up one or two incongruous tidbits at that time. Depending on the rapport you have built, you can offer a third, though I would not offer more than that on a first call. The purpose here is to sow doubt about the veracity of the complaint. Don’t overdo it.  The most critical question you should ask is if you can reach out to the upset person(s) and try to satisfy their concerns directly. Most of the time, the answer to this question is a resounding “yes.” It’s important to ask the question. It shows respect and deference.  Then, agree on a time frame when you will get back with the regulator. Keep him/her posted on your progress. It’s better to over-communicate than under-communicate.  Solving the Issue By now, I am sure you are asking yourself, “when is he going to talk about getting the lawyer involved?” The attorney may not be necessary. This is a fact-specific question and I cannot generalize to give guidance on this. Then, satisfy the aggrieved parties’ concerns. However much it costs to fix the problem, I promise it will be less than letting the regulator devise a solution. Ask them to sign a Release of Claims, which should include language like this: “Customer acknowledges that he is COMPLETELY SATISFIED with ____________ (dealership) and with the resolution of his concerns.” Then, call your regulatory contact again and walk him/her through the dynamics of what happened with the upset person(s). Explain how you resolved the concerns. If a lack of proper business practices caused the problem, it’s usually okay to acknowledge it. Thank the regulator, and, if appropriate, let him know you will change your practices, so this doesn’t happen again. (Use a lot of discretion here as this may not be necessary, and you do not want to create a problem where there isn’t one.) Provide the written document to your contact so he can close his file. Phew! Great work! Conclusion Hopefully, your expectations of dread, gloom, and doom did not come to pass. What did you learn? Is it time to change your risk mitigation strategies? If this was stressful for you, consider taking the time to install new policies and procedures to prevent these problems before they occur. You can reduce your anticipated stress level for future problems by hiring someone who can help with these difficult situations.   Temper your expectations through continuous improvement activity. Risk mitigation is not a one-time thing but is an ongoing practice. It reduces the chances of regulatory interference and catastrophic losses. Consider changing your business processes to accommodate these loss prevention techniques. Then, I’ll meet you in St. Augustine, where we can sip Chinese water from the Fountain of Youth. 
4 Reasons Why Industry Awards Are Marketing Gold — and How to Leverage Them

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As a business leader , you understand the importance of recognition. It's not just that it feels good to be celebrated for your hard work and dedication: it can be a powerful marketing tool when leveraged properly.  The most effective way to gain impactful recognition for your dealership is to win or be nominated for industry awards, such as  CarGurus Top Rated Dealer . That honor is for exceptional customer service and top review scores, but there are plenty of other types of awards your dealership can win and put to work: community involvement, leadership, and more. Winning and promoting awards is something every dealership can incorporate into their marketing strategy . Here are four reasons why awards are worth your time and investment, plus some tips for leveraging them.   1. Awards boost your credibility  Industry awards provide the objective, third-party validation that many shoppers crave. Ultimately, they help differentiate your dealership from the competition. Depending on the award, it can even serve as an instant seal of approval, inspiring trust and credibility in your business for consumers. Not every dealership wins awards and consumers know that which is why many feel more confident purchasing from a business with an independent endorsement.  Tip:  Don't keep your award to yourself! Promote your award win by adding a digital badge to your dealership website , displaying the plaque front and center in your showroom, and including the honor in your marketing materials. The more visible your award is, the more impact you'll get out of it.  2. Your business gains brand awareness It's no secret that today's shoppers use the internet to research their purchases, but with so many online resources available, it can be difficult for dealerships to stand out. That's another area where awards can help. Your dealership automatically gets a free promotion and increased brand awareness when the organization giving the award announces the winners. Not only will this help you build your reputation, but it will also give you the chance to win new business.  Tip:   To maximize your dealership's exposure, don't leave the promotion up to the awards organization. Put up a blog post on your website, issue a press release, and announce your award on social media — an especially  influential channel among Gen Z and younger Millennial shoppers . There are countless benefits to a well-publicized award.  3. It's a reason to connect with past customers While winning an award can put you on the radar of shoppers who weren't already familiar with your dealership, it also gives you a valid reason to reach out to past customers. Shout your news to your customer network to remind them of the advantages of buying from your dealership. Plus, news of a recent award could help you cut through the noise and stand out from the countless other communications shoppers receive each day.   Tip : If you've won a service- or review-based award like  CarGurus Top Rated Dealer , it's likely that great ratings from customers helped you earn the award. Share your success with them via email and thank them for their feedback. Encourage them to visit your store again when their car needs to be serviced or they're in the market for something new. 4. It sends a great message to your employees Beyond brand building and business opportunities, awards also help boost employee morale. By making accolades a priority at your dealership, you send the message that you're invested in the business and care about being the best. This can build team morale, increasing motivation among existing employees, and attracting top talent for future success . Tip : Celebrate the victory with the people who helped make it possible: your staff. Your dealership wouldn't be what it is without them. It always feels good to be recognized for hard work and dedication, and your employees will appreciate the gesture.   Once you've won an award, don't ease up on your efforts. Awards should play an ongoing role in your marketing strategy, whether you run an independent dealership or franchise or sell used cars or new ones. Set your dealership up for long-term success by creating an awards calendar to keep track of what's coming up next. Assign ownership of key responsibilities like managing reviews or putting together awards submissions to a trusted staff member, so you never miss an opportunity. However, you approach it, plan for your dealership to be a winner in 2021!
The Importance of Reviews in Your Google AdWords Strategy

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In our last article, Online Reviews: The Golden Key to a Solid SEO Strategy , we dove into how reviews can impact your Google SEO investment to increase your appearance in consumer searches. Reviews will also impact the ROI of your Google Adwords campaigns, and so it's important to understand how reviews come into play for advertisers before you commit to a substantial pay-per-click budget. First and foremost, your reviews impact your Google Seller Score, specifically, it is your average rating that counts here. Google Seller Ratings showcase advertisers with high ratings (must be above 3.5 stars) aggregated by Google from reputable business review sources. This should be seen as a base requirement, and the good news for dealers is that the vast majority are above this threshold. A point to keep in mind is that better seller ratings display higher in search results reaping the benefits of building a strong reputation. Better seller ratings also have higher conversion rates, which can influence the ROI of your AdWords spend. Google states Seller Ratings can boost your text ads' CTR by up to 10%, which can make a big difference to any company battling with their competitors on Google ads. Looking past seller ratings, we can see in a study by Brightlocal (below) how your average review score on Google impacts your click-through rate. You can see that a 5-star dealer can expect to get 24% more clicks than a 3-star dealer. The obvious benefit is that you get more clicks to your website, but ad campaigns that get a higher click-through rate get a higher quality score from Google and are thus rewarded with a lower cost per click. The bottom line here is that a 4.5-star dealer can spend significantly less to get the same amount of clicks that a 3.5-star dealer would get, and why would anyone purposely want to spend more for the same end benefit? On a side note, if you have recently invested in separating your Google Service and Parts pages, and a primary focus now is to generate more calls, driving directions, and web clicks, then it's important to know that Google has a new ad format which allows a dealer to promote their GMB listing and their reviews in map search results (the map pack) to drive these actions from your Google My Business page specifically. The final point here is to reiterate what was said in the beginning and that dealers need to stop thinking of review counts and average ratings solely as a measure of customer service, but instead that your reviews, specifically on Google, are a basic building block to a successful advertising and SEO strategy, and so an integral part of your marketing program.
3 Things Your Dealership Can Learn From a Blockbuster CEO

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On Monday morning, June, 28 2007, John Antioco sat down at his desk and shuffled through his notes. Nearly ten years as the Chairman and CEO of Blockbuster Video, today Antioco was to deliver a company update to eager-eared lenders buzzing on a conference call. The largest movie rental chain on planet Earth, Blockbuster was plowing through another quarter, swatting down competition but also pivoting in a new and hazy landscape of customer experience. On this call, Antioco touted a leading 40% market share, despite their nearest competitor’s sliver doubling the last two years. This film-hawking foe, Netflix, was a pesky movie-by-mail subscription service that had just introduced a new streaming platform branded as the YouTube for movies. Blockbuster themselves had just recently launched a mail service to compete, and while Antioco asserted that digital delivery- the ability to watch a movie online- would provide customers the control and flexibility they ultimately wanted, the actual nuts and bolts of a Blockbuster digital service were still “TBD”. In other words, there was no plan for that yet.  You couldn’t really blame him at the time. Blockbuster in 2007 was still an industry titan, the retail catalyst that brought the wonder and excitement of the motion picture studios into the living rooms of consumers in 22 countries across the globe. At their peak just a few years before, Blockbuster had 9000 stores, and a stranglehold on market share. The video rental stores were staples in every community; as common as a McDonalds. On any evening in the 90s and early 2000s, a row of warm car bumpers lined Blockbuster storefronts across the country, all lit-up bright blue from the signage above. The glass front door would be swinging open all night long, almost as much as the cash register drawer. They were a truly giant, a world recognized brand. Their partnerships were strong and far-reaching. They had a NASCAR driver, a college football bowl game, and had just debuted a Superbowl commercial. But halfway through 2007, behind the sponsorships and bright blue bulbs, something was wrong with Blockbuster. John Antioco and his team did their best to twist and swivel the optics, and cheerlead with presentation slides and smiles, but the future was becoming evident. This giant was tired…and behind it, stood a young Netflix with a pebble and a slingshot.  Change is Too Fast to Chase: Stay Ahead  That conference call was on a Monday. John Antioco didn’t make it through the week. After ten years as CEO, he was unceremoniously replaced that Friday. His successor may be best remembered for his cavalier comments of Netflix, saying they weren’t even “on the radar.” However, it was Blockbuster themselves that would endure a difficult few years navigating that radar before finally taping out to the competition and filing for bankruptcy protection in 2010. Now, just think about that for a second; they were all done by 2010. Just for perspective, if John Antioco had leased a car the Monday afternoon following his conference call, he would be unemployed before the first payment was due, and his world-recognized empire would be broke and liquidated by the time the lease matured. Change happens fast, and a transformation of that magnitude must have felt like a knockout jab to the Blockbuster brass. That quick pain was felt partly because Blockbuster died while trying to chase Netflix (and Redbox for that matter). Even with the resources of the public investment, and a twelve-year head start, they were caught flat-footed by the change in consumer behavior. By the time Blockbuster became hip to the movie-by-mail model, Netflix had already jumped to the streaming subscription model. Game, set, match.  Soft Markets & Hard Decisions Another red flag on that call, Antioco attributed a soft in-store rental market to mediocre studio content. In other words, it was Hollywood’s fault that Blockbuster sales were lagging. He insisted that a more-favorable release slate in the second half of the year would create momentum. Spoiler alert: that momentum never came. Has anyone ever told you that traffic was down because the product was stale, and that a new redesigned model would bring buyers through the foyer? Don’t accept this premise. You can’t run your business on the prospects of carrying Motor Trend’s Car of the Year, much more than a video rental business could run on the prediction of an Oscar-winning performance by Tom Hanks. A solid and customer-centric business model should thrive whether you are selling cash cars on a corner lot or collecting rooftops for your auto group. (Listen, I’m not referring to once in a generation happenstances like the Covid-19 outbreak for example; nobody can save you if your business isn’t allowed to open.) That said, global pandemics aside, if your business has a reoccurring “softness,” problem, you need to look at your people and/or your processes, because one of them (if not both) is failing you. It’s your job to create momentum, not to wait for the factory to create it for you. When a business model is disconnected, hard decisions and difficult conversations are going to occur-one way or another- you may as well be the initiator.  Obsess on the Customer Evolution We are in a landscape of consumer control and flexibility today, and there are dozens of competitors raising their slingshots. That’s why it’s critical during these times to remember when plotting the future of our own empires to have a legitimate vision for the customer evolution and to create the best path forward. That may sound like a lot to unpack, but it’s a simple idea and it can’t be overthought: keep your eyes on tomorrow’s customer. Blockbuster and John Antioco were instead exhausting ways to service yesterday’s customer. They squandered millions of dollars on in-store campaigns and promotions that failed when they could have been investing in profitable channels outside the four walls of the store. At that time, you might have even heard his district managers imploring their franchisees to “just get them in the door!” (Sound familiar?) All the while, Netflix was so dialed-in to the customer evolution, that they actually poured the footings for the next steps. As dealers, the true time-tested experts of this industry, will we ignore this time of evolution with phony confidence of the past? Will we just chase Carvana into the next decade, stumbling behind like a tired giant; or will we have the obsession, the vision to pave the new customer experience ourselves?