Tag Archives: damage control

Damage Control in Business: A VW Scandal Update

VW Says “We’re Sorry” With Gift Package Valued at Over $1000.

Business is part of life, and with that comes ups and downs. At the end of the day, we are all human beings and by nature, imperfect and make mistakes. In business, a simple mistake or poor decision can affect hundreds, thousands or potentially millions of people. Minimizing damage control can be an extremely difficult undertaking, especially if you or your company was unable to proactively prevent the transmission of and correct the mistake or poor decision to employees, clients or even worse, the media.

A perfect example of this is the VW Recall, later known as the “VW Scandal”. The former CEO of VW Martin Winterkorn, had approved the decision to install software on over 480,000 “clean” diesel vehicles in the US between 2009-2015. This software only activated the cars’ pollution controls during emissions testing (while on a hoist) which prompted a world-wide recall of nearly 11 million vehicles. This was obviously a fraudulent means to pass the rigorous EPA standards in the US and will end up costing VW up to $18 billion.

Unfortunately for the sales force at VW, they had no idea this was happening behind the scenes until they literally heard it on the news before they came in to work that day. For the full story of the immediate impact on the sales force, read my interview with Aaron Hansen, Sales Manager at Cambridge Volkswagen, “How Poor CEO Decisions Impact Sales Reps: The VW Recall”.

So now, 4 months later in an attempt to say “We are sorry”, VW has provided all affected TDI owners such as myself with a compensation package. This includes a $500 credit at a VW dealership, a $500 MasterCard gift cart and 3 years of free road side assistance. Furthermore, the recall on my vehicle will be fixed at no charge or inconvenience to me.

As a loyal VW owner, I think this more than compensates for any wrong doings on their part. As I have mentioned previously, I never bought my car so that I could drink water out of my tail pipe. I bought my Passat TDI for comfort, safety and fuel economy among other reasons.

Do I accept VW’s apology?

I most certainly do. And I must say, the timing couldn’t be better, being just after Christmas and before Valentine’s day.

Will I remain a loyal VW/Audi customer?

Absolutely.

Overall, although VW should have given their sales force a head’s up about all the negative press they were going to receive in the media and prepare them with how to handle customer inquiries and complaints, they made up for it after the fact.

In speaking with the reps at my local VW dealership, sales are back to normal.

Just goes to show that regardless of the severity of the “damage” a business succumbs to or has brought onto themselves, it is possible to recover with the implementation an aggressive damage control program.

If your business is in a similar situation, you should consult a PR expert and ideally one who specializes in your field of work.

How Poor CEO Decisions Impact Sales Reps: The VW Recall

An Interview with Aaron Hansen, Sales Manager at Cambridge Volkswagen.

If you are a sales representative, sales manager, or other front-line staff, there is nothing worse than finding out the head of your company made a huge mistake that reflects poorly on your company. In some cases, you may have a head’s up of the bad news and have time to prepare, be proactive and inform your clients directly before they find out from a 3^rd party, however this is not always the case.

As most of you are aware, Martin Winterkorn, the recently resigned CEO of Volkswagen, had approved the decision to install software on over 480,000 “clean” diesel vehicles in the US between 2009-2015. This software only activated the cars’ pollution controls during emissions testing (while on a hoist) which has now prompted a world-wide recall of nearly 11 million vehicles. This was obviously a fraudulent means to pass the rigorous EPA standards in the US and will end up costing VW up to $18 billion.

Most certainly, this is not the first scandal of its time, especially in automobile history. In my opinion, the majority of large corporations are guilty of some sort of fraudulent activity, just not all of them get caught.

Where I feel pain, is for the sales people. They had no say in the executive decision whatsoever yet have to deal with the wrath of chaos the CEO’s have created for them. No matter how bad the news, the sales reps have to suck it up, put on a happy face, keep smiling and continue selling. I have been there and it’s not easy. For those of you who are in this situation, I would recommend reading my previous article on The Rumor Mill: How to Grind it to a Halt Before it Hurts your Business.

In this article, I have interviewed Aaron Hanson the Sales Manager at Cambridge Volkswagen here in Canada to get his take on the incident and how he and his sales force are handling the matter.

TSW: “How did you find out? Did you have any advanced notice or time to prepare?”

AH: “No head’s up at all. I saw it on the news the morning before I came into work.”

TSW: “How did you and your team react to the news?”

AH: “We were all stressed initially but the fact of the matter is, we sell the cars, we don’t build them. This is not the first or the last time this has happened to a car company. Regardless of what it is in the news, VW is still a great brand that we all have faith in. We have always and will continue to focus on great customer service. It is a small upset so we just persevere, with smile!”

TSW: “How do you stay positive?”

AH: “Easy, we are still alive! It is what it is. Only 30% of our sales were TDI models and the rest were gasoline powered.”

TSW: “How do you feel this news will impact sales now and in the future?”

AH: “Unknown. It is only 5 days in, so it is too early to tell.”

TSW: “What sort of message have you been relaying to new and existing customers?”

AH: “All our TDI customers (whose contact info we have in our database) were contacted immediately. We sent everyone a message informing them of the news, if their vehicle was affected and encouraged them to call us with any questions and concerns.”

TSW: “What kind of responses have you been getting?”

AH: “99% Positive. Almost everyone took the time to reply and say thank you for the follow-up. They were really appreciative of the proactive approach that we took.”

TSW: “What have you been saying to new potential customers who come into your dealership?”

AH: “We are completely upfront with them from the get-go. So far, none of them are really concerned. They all still want to buy! The primary reason people buy our diesel vehicles is because of the fuel economy and they buy from us because of our excellent customer service.”

TSW: “Since your reps are 100% commission based and have specific monthly quotas for different vehicle types (diesel, gasoline, used), will you still be upholding those targets or adjusting them?”

AH: “Right now, it is unknown how this news will impact sales because it is too early to tell. That being said, we are being flexible and seeing how and if sales will change.”

Based on my interview with Aaron, I think he is doing the best a sales manager or representative could do when faced with this particular situation. If you find yourself in this situation, I recommend you follow this example.

Aaron has been my sales rep at Volkswagen for the past 10 years. I have purchased 3 cars from him, 2 of which were TDI’s, so am I concerned about my TDI vehicle or the VW Brand?

No. I am a trusted and true VW fan and as I said previously, most major corporations lie and engage in some sort of fraudulent activity and so did VW. So what? What else is new? I still love my car and I still stand by the fact that I think the VW Passat TDI is the #1 Vehicle for Sales Reps.

I did not buy my car for “green status” which it was never eligible for here in Canada anyway.

I did not buy my car so that I can drink water out of the exhaust.

I purchased my VW Passat TDI because of the fuel economy, handling, comfort and because of the excellent service I have always received from Aaron and staff at Cambridge Volkswagen.

A great sales rep can go a long way, and in most cases can be more important to the consumer than the company they represent.

I would love to hear from other sales reps about how you have dealt with a similar situation where your company has received some negative press and what you and your team did to overcome that.

Happy sales my friends. Remember, even when times get tough, keep persisting and keep positive no matter how hard it may be.

Cheers,

TSW

The Rumor Mill: How to Grind it to a Halt Before it Hurts Your Business

Whether you are self-employed, in upper management or on the road as a sales rep, the last thing you probably want to hear is a rumor about your business, especially one that has the potential to negatively affect you and your company.

Most of the time, my clients will come to me directly when they first hear a rumor, be it good or bad. Other times when for instance, I am on a sales call, if seemingly out of nowhere, my client starts to bombard me with questions about our industry and my company’s integrity, I know something serious may be going on. If I have travelled from clinic to clinic to face the exact same questions over and over again, then I know for certain that I must investigate the matter further. This typically happens when I’m trailing the route of a competing sales representative and for the most part, that is part of normal healthy competition. However, sometimes that is not the case at all. It may very well be the beginning of a PR nightmare.

Rumors are a dime a dozen in my industry and I often feel that in any aspect in life, the more successful you are, the more prone you are to attack.

As some of you may be aware, I work for a small business. Although the bulk of my job is in a sales capacity, I am also responsible for all of the marketing, business development and public relations management for the company. This means that as soon as I catch wind of a potentially negative rumor that could affect my company and ultimately my sales, that I need to take that saleswoman hat off, and put my PR hat on. I have to get down to the nitty gritty of it all and devise a plan to sort out all of the facts and relay the correct information to my clients ASAP before the rumor mill gets out of control.

I have to admit that public relations and “damage control” is the most challenging part of my job. The reason being is that I take a lot of pride in my work and the company that I work for and I just can’t stand false accusations, especially when I have to take time away from selling to deal with them. I’ve been with my current employer for so long because of the ethical and upstanding way that the company does business and that is a huge reason for the company’s success. Since its fruition, I have spent several years building and nurturing the business, so when false and threatening rumors start to mill about, I feel like I want to lash out like a Momma bear protecting her cub from a pack of wolves.

…But that wouldn’t be professional, so I digress.

In this article, I will discuss the different types of rumors, why they start and how to stop them from getting out of control and hurting your business.

Note: If you are a sales representative for a corporation and do not have decision making authority, I strongly recommend that you do NOT take matters into your own hands, but rather gather all of the facts you can and immediately report them to your sales manager. Only act under direction of your supervisor otherwise it may cost you your job.

INDIRECT RUMORS:

These rumors although not directly related your company, may have trickle-down effects that can affect your business. I have broken them down into two categories: Industry Related and Mistaken Identity

Industry Related

These rumors come about when a leading company within a specific industry has acted in a manner which has subsequently caused them or a particular product to receive negative publicity. If such acts have caught the attention of national or even international media, this may instill fear in the consumer who does not use the company in question but does conduct business in the same industry.

For example, several years ago one scientific study published results which claimed that people who supplemented with Vitamin E had higher mortality rates than those who did not. Even though this study was very poorly done and was not conclusive, the media blew it out of proportion and broadcasted that “Vitamin E Kills”. My father, who owns a nutrition store, saw a huge decrease in his Vitamin E sales as a result even though it had nothing to do with his business or a certain brand of product that he sold.

Unfortunately, in these cases the business owner or sales rep ends up on the defense, having to defend the legitimacy of the product or service they are selling. In business, the best practice to overcome these random and potentially harmful rumors is to be proactive. Ensure that you are routinely keeping up with current events in your industry and regularly educating your clients so that they will trust and value your opinion rather than succumb to the latest gossip.

Mistaken Identity

These rumors most often involve a direct competitor and can be quite a nightmare to straighten out. For instance, let’s say in a niche industry where you may have two main competitors who may even have very similar company names (i.e. ABC Corporation and ACME Corporation), if one of those companies were to be exposed for having done something illegal or unethical, the other companies may be “guilty by association”. In these cases, clients may easily confuse which company is “the bad guy” sort-to-speak or just be reluctant to use any of those companies out of fear that they may all be conducting business in the same manner.

If this happens to your business, the best thing to do is to get in front of your customers either face-to-face or by means of intense advertising to remind them of your business and what sets you apart from your competition. Remind them of your excellent quality, service or whatever it may be. Keep your head up, keep it positive and act like you are unaffected. Playing your cards right in this situation may end up increasing your sales, especially if you can take some of that business from your competition.

2. DIRECT RUMORS (Targeted)

This is an unethical, malicious attack conducted by an individual or an organization intended to harm a business. It is also illegal and violates many codes of professional practice. Although these types of rumors are rare, they do happen. I have seen this behavior in sales representatives, business professionals, and even some companies who do this in a desperate attempt to “win” back their market share. If you have ever considered doing this, don’t! The egg will wind up on your face.

I hate dealing with these cases because it is such an absolute waste of everybody’s time. If you fall victim to this childish behavior, just laugh it off and clarify the facts. If you have a solid relationship with your clients, they will believe you. If the accusation is a serious potential threat to your business, then you will need to devise a solid PR strategy and may need to obtain legal advice.

If you are faced with any of these types of rumors or perhaps one I haven’t mentioned, follow these general steps to stop the rumor mill before it gets out of control:

Qualify the Rumor: Is it a legitimate threat to your business? If not, just laugh it off. If it could be, proceed to step 2
Find The Facts: In speaking with the person who brought the rumor to your attention (and no one else), ask the 5W’S: WHO,WHAT, WHEN, WHERE and WHY. Document everything in detail. Do NOT provide your opinion or commentary prematurely as that could further harm your business.

Some examples of questions to ask could be:

WHO did they hear it from? Was it first hand? Or second hand? Make note of any names in case someone may be guilty of slander. Knowing how far off from the source your client heard the rumor could give you valuable insight into how far it has already spread and how much damage could have potentially been done.

WHAT exactly did they hear? Be as specific as possible. Was it something that was covered in the media recently? Was someone in particular saying bad things about you or your company? Or is your client just worried about something in general?

WHERE did they hear this? Were they amongst other clients of yours?

WHEN did they hear it? If it was a long, long time ago, it likely isn’t relevant anymore. If it was recently, how recently? Rumors spread very quickly, so if you are the first person they talked to about it, you have a good chance at grinding that rumor mill to a halt before it gets going.

WHY did someone say the things they did? Did the person sharing these rumors with your client share them out of concern or ill intent?

Decide on the Most Appropriate Medium(s) to Present the Facts: This will depend on your specific type of business. Will you create a press release? Or target specific clients? Will you discuss it face-to-face? Or simply via a letter or email?

Bombard Your Clients with The Facts: You can use one type of media or several. Regardless, make sure that your clients are crystal clear about the situation at hand.

Consult a Lawyer if Necessary. If you are dealing with an individual or corporation who may be slandering you or your company, you should obtain legal advice.

I hope that none of you have to deal with these types of scenarios in business, but if you do, I hope you keep this article as a handy reference and find these tips helpful in grinding that rumor mill to a halt!

Happy sales my friends and remember to keep your head up and be professional!