What You Can Learn From Porsche's Customer-Service Fail
If I asked, "Which luxury-car company most recently extinguished a big engine-fire problem?" you would probably say Tesla. You would be wrong.
Last month, Porsche reportedly issued a recall for all 785 of its 2014 911 GT3s. An improperly installed fastener led to two fires in European vehicles. The press reported the recall, but no government investigation followed. Porsche simply told drivers to stop driving, and that it would replace the engine. Conversely, Tesla's three fires prompted an investigation by federal safety regulators. Automakers piled on to attack CEO Elon Musk, while dealers claimed he "wants all the profits for himself."
Chances are, you didn't even hear about the Porsche recall--and if you did, you no doubt didn't see reports on the fires themselves. Whereas Musk's detailed response did little to calm the public, Porsche's CEO, Matthias Mueller, was greeted comfortably when he told us that "[Porsche] is not taking any risks when it comes to the safety of our customers." Both acted ethically and properly--one simply exerted significantly less effort. The difference? The Porsche brand is powerful and protected by multiple layers of owners, reporters, and PR movements.
"The owners all know about the problems, but we're reluctant to tell anyone," says Jack Baruth, editor in chief of TheTruthAboutCars.com and owner of two Porsches. "It lowers the value of the car. [Talking about the problems] makes us seem like status-seeking underendowed simpletons."
In other words, owners fasten their own golden handcuffs, regardless of any risk. "Most of the owners don't expect the car to work every day. We never had," Baruth says.
Porsche's protective bubble has also been built up by an internal PR team that regularly gives reporters "experiences"--invitations to drive beautiful cars in beautiful locations. "Porsche uses the carrot and stick very well," Baruth says. "The carrot is so big that they can and will fly you business class to Sicily to drive mountain roads. It's effectively a $20,000 vacation if you write what they want you to write."
Baruth cited the American Journalism Review's condemnation of car-review standards, which attacks the world of car reviewing for being "replete with expensive perks and fantasy vehicles--consumer advocates need not apply."
The same article also discusses Porsche's blacklisting of Baruth after a scathing Panamera review. Porsche denies that bad press was a motivation for no longer interacting with Baruth, saying "one of the key questions we ask is whether a reviewer writes for a demographic that can afford a Porsche." According to a 2011 media kit, 50 percent of The Truth About Cars's readers earn more than $75,000 a year.
Rewarding allies isn't an uncommon practice in PR. Video-game reporters at times find themselves unable to get games in advance from PR people, meaning they have to buy them on their own, releasing their review later than those that got "code" earlier.
Picking up a $59.99 game is within budget for most journalists. If you can find a Porsche 911 for rent, the cost can easily exceed $290. Per day. To quote Baruth, "Carmakers can make you noncompetitive."
In today's world, however, reporters aren't the only source of criticism. And it's much harder to shut up an angry, eloquent, and entertaining customer.
Enter Nick Murray, a Connecticut-based Porsche-enthusiast who saved for five years to buy a Porsche 911, and his tale of woe (viewed on YouTube nearly one million times). Upon buying his dream car, Murray says, he immediately ran into problems ranging from self-dropping mirrors to a draining battery to dashboard technology that turned off after hitting speed bumps. According to Murray, he took the car to Porsche for a series of repairs that he was assured would fix the problems. Upon the car's return, it began leaking in the rain--and suffering other problems.
The video suggests that Porsche would not refund the cost of the car or replace it but instead offered to give Murray a percentage of what it thought he'd get through arbitration. It appears--but is not obvious--that Porsche was offering this discounted purchase price for the car; Murray would end up with less money and no car. Porsche did not respond to my request for comment.
Ten years ago, one customer's lemon wouldn't have been an issue for Porsche. Today, Murray's saga has been well documented in passionate, entertaining, and high-quality videos that have inspired a swell of social-media critiques, ranging from regular tweets demanding a refund for Murray to a response from the wildly popular car blog Jalopnik.
On Google News, the buzz around Murray's lemon has pushed down a gushing LA Times profile of Porsche's latest 911. Anyone checking for Porsche 911 news can't avoid Murray's story--and even those simply searching for Porsche will be hard pressed to avoid it. This story also overshadows a Reuters story discussing Porsche's success "looming over" Maserati's sales push.
In essence: One mistreated customer has gut-punched Porsche's PR efforts on the eve of the New York International Auto Show. Two press releases issued in the last day about the 911 are utterly submerged (much like Murray's passenger-side floor) under negative press.
Angry customers (and Internet users) descended upon Porsche's Facebook page, repeatedly posting the video and demanding a resolution. One eventually came. This week, Porsche agreed to refund the full cost of replacing Murray's vehicle. But still, we're left with the impression that he was only an important customer once he recruited an angry mob. And despite the make-good, that Porsche is stuck in a past in which the consumer is the enemy and the brand controls all.
Here are four lessons you can learn from Porsche's public flogging:
1. As a Company, Fix Problems Before They Reach the Press
If a customer has a reasonable complaint (the thing you sold them is, for example, turning off at random), fix it. And if you can' fix it, give the person a new one. Don't hope to weather the storm to save a little cash.
2. You Can't Blacklist Your Way to Success
Samsung's Galaxy S5 recently launched to a particularly lukewarm reception from reporters like Geoffrey Fowler of The Wall Street Journal. This isn't the first time reporters have received review devices and said bad things--and yet the review units keep being delivered. Why? A reporter is not a blank vessel for your brand--you can only control the message insofar as you can tell the press what you know and make a good product. If there's a problem, you cannot edit or blackball your way to making sure people stay in line.
If your product has problems and the reporter reports them, you should have made a better product. Sorry.
3. You're Not the Reporter. She Is. And It's Her Article
Baruth told me a story of a car manufacturer demanding to edit a story he had posted. When he pushed back, he was told "other reporters let me."
I would love to say that this has never happened with my clients. It's very uncommon, but many clients in the past have asked, "Can we see the article before it goes live?" If you want to make a reporter hate you, this is a very good way to do it--you are a PR person. You have no rights to a reporter's work. Ultimately, the reporter is doing you a favor by writing about your client, or you have given the reporter a story--not a press release that you wrote.
4. If There's a Problem, Just Fix It
The other day, I used Shyp, a company that picks up whatever it is you want shipped, packages it for you, and sends it. I asked for two-day shipping, but I was charged more than $50 for overnight shipping. I (rather unprofessionally) lost my cool on Twitter about it. I am by no means a Twitter superstar, and yet Shyp jumped on my tweets, called me, apologized, refunded the difference, and told me about the company's next update, which would include shipping estimates.
Porsche, on the other hand, has not yet issued a full response. Yes, it's significantly more expensive to fix a Porsche. However, a company that sold 50.1 percent of itself to Volkswagen for $5.6 billion and has a history of wooing reporters with expensive trips could have--and especially at this luxury level, should have--simply taken the car away and handed over a like-for-like model. The problem could have been over before it began; now, the brand damage is only getting started.