Compassion: What Ford, GM, Chrysler and Hyundai should have done

By Peter Sorgenfrei

Toyota clearly is in a lot of trouble. Between having to recall millions of vehicles and the PR nightmare they’ve created by not communicating with the public and the government in a timely manner, they face a monumental task in getting their organization back on track and starting the process of regaining their customer’s trust.

Watching Ford, Chrysler, GM and Hyundai’s response has been interesting. They are all taking advantage of Toyota’s publicity issue and are directly targeting Toyota’s customers by running ads offering incentives to Toyota owners. While not explicitly saying so, the ads are implying that their products don’t have Toyota’s quality issues.

Their efforts are an example of traditional marketing and advertising. Here is an alternative path and one that I would have advised these (and others who might consider following suit) companies to pursue:

Run compassion and empathy campaigns. Tell your customers and the American people that although Toyota is a fierce competitor of yours, you understand how difficult it is for them to go through this. You have seen how tirelessly they have worked on quality over the years and you know how good they are. Explain that manufacturing an automobile is a complex process, that your company (and the industry) invest billions of dollars in getting all the components right and that sometimes there are issues. If you are Ford you could even say that you had some issues yourself in the past and that you wish Toyota the best.

I imagine the consumer would read or watch an ad like that and think – you know what – that is a great perspective, what a class act, refreshing to see. It would put the advertiser in a different light with that consumer. They would talk about the ad and they might even consider visiting your showroom to check out this ‘new’ compassionate company’s product.

I know this is not traditional advertising think, and I know that market share grab is the name of the game, but I do think you could create long term value with the consumer if you showed compassion for a competitor going through the worst crisis of its existence.

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21 thoughts on “Compassion: What Ford, GM, Chrysler and Hyundai should have done

  1. Kieran Michael says:

    I was just thinking the other day how the other manufacturers could have capitalized on this by offering loaner cars or tow assistance, something along those lines.

    You’re completely right that had someone stepped up and did the “right” thing and, at lease ostensibly, helped Toyota out they would have purchased mindshare far in excess of its actual cost.

  2. Adam says:

    Full disclosure: I’m a GM employee.

    I have not seen the GM (and Ford and Hyundai) ads, but I have heard about them. Frankly, if Toyota leadership had been more upfront and truthful about this whole mess, then perhaps the case for compassion could be made. But when Toyota stops selling cars and says it’s because they put customers first–and then we find out Toyota stopped selling cars because the government told them to–then credibility goes down the tubes. And when the CEO takes so, so long to speak to the media–and to his customers about this ‘crisis’ (his words, I believe)–then it’s clear to me that this is a cultural issue as much as it’s a safety issue.

    In this environment, I can’t blame any competitor for identifying an opportunity to improve their market share–especially when Toyota has been coasting on an image of quality for so long that newer GM and Ford products don’t even show up on customers’ radar.

  3. 100% spot-on.

    It’s social media 101: When your competitor makes a big, dumb mistake, you don’t pile it on. Instead, you offer to help anyone and everyone that’s effected.

    In times of crisis, people often set aside their differences and work together. Why wouldn’t big companies do the same thing?

  4. Dan Sherman says:

    @Jason: Because most people aren’t trying to kill each other. Business is non-stop war.

    Peter, I see where you’re coming from, but the “traditional” method seems a more appropriate reaction to an outraged car buying population. From what I’ve seen, few view Toyota as a victim; many have responded with [perhaps irrational amounts of] fear and anger. Compassionate advertising could also mitigate the depth of Toyota’s crisis, inspiring reactions like: “Oh this can happen to any company…guess I’ll still stick with Toyota.”

    As Adam says, Toyota has long coasted on an image of quality which has simultaneously been destroying its competitors. When SO much negative PR dents this image, how could you not take advantage?!

    I suppose I see a competitor benefiting more from beating Toyota with a baseball bat than from the slight warm and fuzzy feeling of a compassionate PR campaign.

  5. @Dan – Don’t lecture me on the “war” aspects of the car business. I don’t know what your experience is, but I worked in the trenches at the retail level that the big-wig execs can only wonder about.

    Next, at this high of a level, there’s no “war” going on anywhere. GM is no more at war with Toyota than they are with suppliers, dealers, congress, the EPA, the oil industry, the UAW, etc. If large corporations REALLY adopted the type of “war” mentality you speak of in all of their business items, they would collapse under their own weight. It’s hyperbole.

    Also, remember that showing compassion doesn’t preclude sending a message. Offering any Toyota owner a steeply discounted GM rental car would have demonstrated that GM is both compassionate AND confident in their product. The contrast between GM and Toyota quality would have been just as evident, but it wouldn’t have been drawn so harshly.

    The point: The “new” rules of marketing and PR tell us that advertising is often too overt. Customers aren’t always smart, but they *are* pretty good at reading between the lines. A soft touch is almost always better in this type of situation.

  6. sorgenfrei says:

    Thanks for all the comments:

    @Kieran – the whole idea of loaner cars etc. is a good one

    @Adam – I understand where you are coming from and Toyota has been given a lot of leeway. My point was not that you should accept and forgive them. My point was you could talk to customers in a different voice that might yield long term advantages for your brand and be a statesman in the industry. No offense to GM, but I sort of expected the ‘new’ Ford to have done something along the lines of what I suggested.

    @Jason – thanks. Big companies are not, since they most often chase quarterly performance and thus want short term gains over long term ditto.

    @Dan – You are right – taking advantage of an ‘enemy’ that is down is too tempting for most. I get that and I know that is how most think. My point is there might be a different way for the willing to be the bigger person (without alienating your struggling dealers, etc.) and show compassion

  7. Adam says:

    @Jason: “…you offer to help anyone and everyone that’s effected…”

    Unless the company in question is accused of covering up, lying (see Jalopnik’s commentary on the Lentz interview on the Today show), and being slow to respond. Then you stay as far away from that mess as possible.

    If this were, for example, the Tylenol poisoning case of years back, then, yes, I could see Tylenol’s competitors helping out both the company and customer; if memory serves, Tylenol was pretty above-board when dealing with the public on this issue, and it was an issue out of their control (initially).

    @Kieran: I am intrigued by the idea of competitors’ offering loaner cars to Toyota owners worried about driving their own cars. Certainly a way to get ‘butts in seats’, as they say in the biz, but not sure how to work the business case.

  8. Adam – I disagree. Toyota’s actions here are irrelevant to GM’s response. Toyota can dig the hole as deep as they want, but as long as GM sticks to helping Toyota’s customers they win.

    Again, there’s no reason that drawing a distinction between Toyota and GM has to be done in a negative way. The goal is to help GM sell cars, and that comes down to consideration and brand. If GM can boost their brand by being helpful and compassionate to customers, and if they can get people in their vehicles as a result, that’s a win-win.

    Just a question – of all the commentors here, how many have auto industry experience? I can’t be the only one…

  9. sorgenfrei says:

    @Jason I can answer the experience question (in order of seniority – sorry Adam ;-))

    Adam (more than 15 years)
    Peter (15 years)
    Dan (enthusiast)
    Kieran (consumer)

    And you Jason – thanks for you comments btw – how long and in what capacity have you been in the industry?

  10. I worked in auto dealerships for the better part of a decade (9 years), starting with detailing and working up to sales management. I’m also the editor of Tundra Headquarters.

    http://www.tundraheadquarters.com

    Please know that I’m not trying to turn this into an experience “thing,” but there’s a lot to be said for experience selling cars. No offense to all the people who worked for the manufacturers, but frankly in my short career I rarely met a Ford or Toyota exec that “got it.” Instead of listening to the people who talked to the customers every day, they worried about focus groups and the ever mythical “brand management.”

    If GM, Chrysler, etc. want to knock off Toyota, the first step is getting on the list of cars to consider. Offering to help Toyota accomplishes that much more than kicking them, IMHO, and it doesn’t risk alienating Toyota’s ultra-loyal owner base.

  11. Adam says:

    @Jason: No issue with your notion of offering a deeply-discounted GM rental car to Toyota customers, but I don’t think that’s a mutually exclusive idea from offering incentives to current Toyota owners. I guess (sorry, Peter) that my bigger beef was with the notion put forward at the top of this article–“Tell your customers and the American people that although Toyota is a fierce competitor of yours, you understand how difficult for them to go through this. You have seen how tirelessly they have worked on quality over the years and you know how good they are.” Toyota is not acting with sufficient levels of honor to warrant that kind of support. Support (and attract the attention of) Toyota’s customers who are having..er…mobility issues? Fine. But help Toyota with a problem that appears to have been created by their culture, or work WITH them to fix it? Sorry, no.

  12. @Adam – Makes sense. I think there’s a line between compassion and sharing responsibility, but I get what you’re saying.

    My issue with GM’s incentive is that 1) the $1,000 does little in terms of making a deal and 2) it makes GM look predatory.

    If GM had offered to help somehow (discounted loaners, free inspections, etc.) it would have made them look better, and it wouldn’t piss off a bunch of Toyota fans like me.

    As for the $1000 conquest incentive, GM should call me when they’re ready to put some real money up. $1,000 isn’t going to get any 2008+ Toyota owner out of their lease or installment contract early…anyone with a car that new is almost certainly carrying $5k in negative equity (cause’ nobody makes a down payment anymore, but anyways…).

    GM’s move was the worst of both worlds – they looked predatory, and they didn’t give their dealers or Toyota customers enough money to really make a difference.

    ONE more thing and then I’ll shut up – that $1,000 incentive doesn’t even come close to covering the drop in value most Toyota owners are seeing right now. It’s easily the worst though-out incentive ever, and it looks a lot like sour grapes.

  13. sorgenfrei says:

    @Jason – I think you are absolutely right – there is (and has always been) a huge distance between the dealer personnel and the OEM employees and their understanding of what the consumer wants and needs. My argument has always been (although we are part of the external advisers) its is about selling cars! Not focus groups, or trend studies. Although we do do those, since that is part of the cost of entry we always ask – will this activity sell more vehicles!

    @Adam – right not mutually exclusive. My argument is still, they could have (and in my opinion should have) communicated differently and gotten a better long term result. I do not think the consumer would have seen that as siding with an less than honorable competitor and thus as a bad thing that would have tarnished the GM (or one of the others) brand. It is clear however from the Facebook and Twitter comments I have gotten that industry observers (in Detroit) feel differently 😉

  14. Thanks! For the record, I think both sides have a point. A lot of the GM faithful that I’ve spoken to were jazzed up about the incentive, so perhaps this move was successful because it “rallied the base.”

  15. kravitz says:

    The industry reaction has been lacking class. First issue – I doubt Toyota is the only manufacturer using the accelerator supplier. Second issue, Toyota is not the only company using complex electronics in its vehicles. While there is giddyness about watching a giant fall, the problem is a lot of others were with someone the giant knew. And one would think the other companies would want to avoid bad karma.

  16. Robert Ampthor says:

    While many news bites have focused on the Toyota owner who has been given pause and reason to doubt the once sterling and consumer report much reinforced quality persona, I believe it will take more than a $500 conquest coupon to move someone over. It is a decision that lasts 5-10 years.
    The compassion approach would take a higher road and more mannerly tone and even state that e.g. GM has understood the absolute requirement for quality that is why we are rated blah blah blah or made x improvement over 3 years etc.
    In fact it could even be added that Ford encourages consumers to research the quality of any vehicle under consideration. The consumer deserves the best vehicle value for their money.

  17. kevman says:

    In a perfect world, or certainly a better one than today, competitors would treat one another with an air of kindness and mutual respect. But the rules of war and business are different, especially today. I saw a bit of “piling on” through all this, and while I don’t agree with the manner of execution, it is not surprising. Indeed, the shrinking pie operating environment is about doing unto others before they do unto you. The animosity toward Toyota, Japan Inc., and the big red machine has manifest in both schadenfreude and attacking a wounded animal in this case. Not sure Toyota brought this on through their hubris; however, the news media are certainly to blame to some extent, having given Toyota a pass for years on perceived quality superiority. Equally, nobody should be surprised by Toyota’s slip as their leaders have seen it coming for awhile with “big company disease” and unbridled growth. Greed and ambition often fuel disaster, but just watch Toyota recover. Anybody wanna bet? And if you think the D3 will let off the pedal anytime soon, you’re kidding yourselves.

  18. jason says:

    Honda deserves some credit here. From a letter to dealers: “Additionally, we will not react in a predatory way toward either Toyota or Toyota customers.”

    http://www.honda.com/newsandviews/pov.aspx?id=5370

    Good for them.

  19. […] He had printed out our website (first time that has ever happened), an article I had written on compassion in the auto industry (first time ever too), and he had taken extensive notes on the website print […]

  20. […] when Toyota was going through its troubles (even if the motivation may not be 100% pure, taking the high road may have […]

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