About two years ago, I leased – and fortunately did not buy – a Volkswagen Passat. When deciding to get a Passat, I was impressed by the roominess inside and the excellent performance of the engine.
Two weeks ago, I decided to investigate taking advantage of several discount offers from Buick on purchasing their Encore SUV. I knew that I might have to pay some extra money to get out of my lease, but I also knew that, at the current pace of usage, I would have to buy extra miles and likely replace either tires, brakes, or both before the end of the lease.
While at the dealer, I asked them to give me an estimate on what my Passat was worth so I could see if the potential deal made financial sense. When the salesmen came back, he told me that, unfortunately, there was a Takada airbag recall on my Passat. And, since there was no solution in place to fix the recall, the dealer could not take my Passat on a trade because they would not be able to sell it.
He suggested that I call Volkswagen to see if there was a remedy which I did. VW promised me that within three business days they would investigate my case and then decide what they would offer me. On the third day, someone from VW called me early in the morning and left me a voicemail. I returned the call and left a voicemail asking them to call me back between 8:30 and 5:30.
The next day, they again called at 7:30 and left me a message. Once again I called back and, again, was only able to reach voicemail. After repeating this for three days, they sent me an email saying they had been trying to reach me. They left a phone number and asked me to call, which I did, and I got voicemail again.
The email also said that I could have them respond by email. I decided this seemed like a better option at that point. So, I responded to the email and said that getting back to me via email would be fine.
I then heard nothing from them for the next four days even though I called them twice each day and left voicemails. Finally, on the morning of the fifth day, the person who had been calling me early in the morning returned my call at mid-morning and read to me from a script saying that VW would do nothing to rectify the situation.
When starting this process, I was not foolish enough to think that Volkswagen would offer me a price that would make me whole on my car. However, if they offered me a price, even if it was low, at least it would provide me an opportunity to decide what I wanted to do. However, they choose to do nothing.
I should not be surprised at VW’s disregard for their customers. This is the same company who cheated on the testing for the US mileage standards. The fact that they won’t stand behind their products should not have been unexpected.
However, based on my experience – and VW’s unwillingness to try to resolve the matter in any way – I will never again consider buying a Volkswagen. I will also warn anyone who talks about buying a VW to not do so.
History shows that it is not the incident that hurts a company. Instead, it is the company’s response to a crisis that is important. The classic example is Coca Cola. In 1985, in an effort to respond to competition from Pepsi, the leaders of Coca Cola decided to change the formula for their number one product. They made this decision even though Coke was the most popular soft drink at the time.
The result was a firestorm of protests. The company’s stock price dropped sharply, and management was harshly criticized.
However, within a few months, the leaders of Coca Cola realized their mistake. They then pulled off one of the most amazing transformations in consumer history. They successfully brought back the original Coca Cola by launching it as “Classic Coke.” In the months and years that followed, Coca Cola gained market share and became more popular than ever. Today it remains the most popular soft drink in the world.
Similar examples can be seen in politics. Bill Clinton, at the end of the Monica Lewinsky scandal, went on national TV and apologized for his conduct. He then was able to finish his term, and, today, remains a very popular ex-President to many Americans.
Contrast this with Donald Trump’s response to the release of a tape where he made demeaning comments about women. Instead of accepting responsibility and apologizing for his poor behavior, his response was to try to explain it as acceptable locker room talk. As a former athlete, I will tell you that his comments are not an acceptable way to talk about women in any context.
Trump’s poor response likely ended any chance he had to win the election. Clinton’s apology allowed him to finish his term and to be a highly visible ex-President who has made millions since leaving office.
Samsung is currently embroiled in a difficult situation since the batteries in their new phone tend to catch on fire. The future of their success in the phone business will rely on their ability to successfully handle the current crisis. What I hear from Samsung owners is that Samsung is replacing customer’s phones and owning up to the situation. If they can successfully address their customers’ needs quickly, then they will likely recover from the current crisis.
Whether you are a large inter-global company, a small business owner, or a regular person, you will likely encounter situations where you or your company have done something wrong or where it is perceived that you have done so.
The only right response to this kind of situation is to accept responsibility and do whatever you can to restore the situation. Coca Cola and Bill Clinton did their best to address their situations and were successful. Volkswagen and Donald Trump did not do so. The likely result for both will be failure.
Samsung is still in their crisis. So far they seem to be doing what they can to fix the situation and save their brand. Time will tell if they will succeed.