Dealership Marketing

Wrath of the Net – talk about Ouch!

Voodoo
The power of the Internet is being felt by the Husker Automotive Group at their BMW of Lincoln store.  Before we get into the details of this debacle, we want you to know it was debated as to whether this should be posted on Dealer Refresh or not.  At the end of the debate, the spirit of teaching other dealers a lesson from this mistake won out over just pointing a finger.  We don’t strive to kick people when they’re down.

Anyway, this all started on March 20th, 2008 when this eBay auction ended:
click for actual listing.  There was only a single bidder and he won the auction for $60,000 on a brand new 2008 BMW M3 Sedan with a MSRP above $70,000.  Obviously BMW of Lincoln was not watching the listing close enough, and they also forgot to set a reserve (mistake #1).

When the auction ended the winner was contacted, by email, with the statement “Congratulations” – according to the winning bidder.  Then that email was followed by a second email and phone call stating the listing was an error (mistake #2).  After some dispute over things, the winning bidder started a thread on one of the M3 forums:
click here for that thread.

Two days later, AutoBlog picked the story up:
click here for that article.  Since AutoBlog put it out, the story has traveled across every automotive forum we’ve seen.

Remember lightsabre boy, the lol’d owls, and the chubby-cheeked Asian boy?  Well, we can now add the General Manager of BMW of Lincoln to that list.  His photo was found here: Husker BMW staff.  Now he is the latest Photoshop child of the Internet.  Since his Internet popularity took off, he sent an email to the winning bidder asking him to stop all the things happening around the Internet (mistake #3), as if the winning bidder can do anything about it.  But the winning bidder has been posting all the email communications from BMW of Lincoln, and now the General Manager is a YouTube hit:

Upon further debate, we decided to take the video down.  Even though the video is technically hosted on YouTube (not Dealer Refresh) we decided it was not compliant with Dealer Refresh site rules.  We must admit we were caught up in the hysteria and were not thinking things all the way through when we linked that video to this post.  We would like to apologize to the people who have been targeted in this whole mess, and let those people know we sympathize – this must be an incredibly difficult time.  Just remember:  “this too shall pass.”  We would also like to put on the record that we have a lot of admiration for the larger dealer group encompassing Husker BMW.  We started this post on the notion that it will help other dealers be cognizant of reputation management (a hot topic in the dealer world right now).  We would also like to extend an invitation to any representative of Husker BMW, or the larger group, to participate in the comment thread attached to this post.  We welcome any insight you can give, and hope you’ll take this opportunity to help your cause.

Sincerely,

Jeff & Alex

“These bloggers out there, they have lots of time on their hands to do this.” …one of the salesmanagers.

“Did it ever occur to the dealership that they created a situation that compelled complete strangers to MAKE time?”….the winning bidder.

It only takes 1 person, 1 posting to really screw things up.

There is a lot to learn from BMW of Lincoln’s mistakes.  Let’s recap those:

  1. Put a reserve on your eBay auctions or make the opening bid something you can do.
  2. Don’t assume your customers are dumb.  Don’t tell someone putting a car on eBay was a mistake when you’ve obviously taken the time to make a decent listing.
  3. Don’t email an upset customer anything they can hold against you publicly.
  4. Know when you’ve lost and make things right.  Admit your mistake and move on, no matter how much it costs because the penalties are far worse.

We’re sorry this happened to you BMW of Lincoln, but you really did it to yourselves.  Hopefully you’ll do the right thing, and have learned the power of the Internet!

Co-authored by Jeff & Alex

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    Eric
  • March 28, 2008
So, did they sell the guy his BMW?
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    Ace
  • March 28, 2008
This is known as "AMC" or "All Mistakes Combined". As valuable as the web can work for a dealer it can certainly work against one if the hand of cards dealt is not properly played.
B
So is ebay worth the trouble? From personal experience I think the number is higher on the flipside, buyers not paying for the car they won on ebay vs the screwup @ cornville BMW. Looks like a quick risk vs reward assessment will show that ebay is no place to play, I am taking my ball and going home. This is also a very good example of why a strong online reputation is very important and not to be taken lightly.
B
by the way I see why you guys were torn about making this post, I thought about the same thing before my post but I think you all put together a classy post that shows your true intention of learning from another dealers mistake.
A
Eric - from what I can tell, on that the M3 forum, there was some legal muscle flexing that enticed BMW of Lincoln to honor the price. It sounds like another BMW store stepped up to the plate to help with the delivery closer to the winning bidder's home!

Brian - thanks. I wouldn't let this little thing upset your eBay plans. Just be careful when you list a car - learn from their mistake.
M
Very interesting post Alex and Jeff.
I think the lesson is a simple one and that is that sometimes no matter how upset you are with a customer wanting to hold you to a misprint or erroneously posted price, you need to consider what the ramifications are to the dealership reputation and future sales (or lost sales for that matter)

I wrote an article a few months back on "releasing the ego" to win more sales and this is exactly one such case. Dealers need to become smarter at their internal marketing and they need to better understand that customers have unlimited ability to expose situations now more than ever before. This applies to not only internet postings or advertising in papers and TV it but also their behavior at the store on the showroom floor. Consumers are now more inclined to "tell the world" about a bad experience since they know it costs them nothing and gives them a sense of "equalizing" the playing field.

This also relates to reputation management and dealers are going to have to be paying attention to it more and more since one bad experience can quickly get out of control like the one you have posted.

It may also come down to communicating with your customer and understanding both sides better. This customer put a lot of effort into making that video and I'm sure they would have loved an excuse not to have had to do that.

Mark Bonfigli
President, CEO
Dealer.com, Inc

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    Doug in Michigan
  • March 28, 2008
Classy handling of a touchy subject. Good job.

I'll add a fifth item to your list of do-not's:

5) Do not leave voice mails bragging that you will prevail because
you are part of a multi-billion dollar dealer group. Leave only
your name, company name, date, time & contact info.


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    Lao Shi
  • March 28, 2008
Well done Jeff and Alex, you have opened a closet door that needed to be open to fresh air and sunshine. When we can expose and bring to light these practices, police our industry and work to make it known not all industry members practice these devious methods our industry will have a better reputation.

Is this new? Reputation management, dealer management/principals, dealers are going to have to be paying attention to it more and more. What is this statement telling us? I thought that reputation management was something we all do to the best of our ability. Something we were taught by our parents as children. I guess the reverse is also true some children were taught to take advantage and mislead people to have the edge.

Reminds me of the Father in the movie Matilda, my daughter and I saw this together. At 7 years of age she could see the “slime” in the characters of the “dirt ball” parents. She looked up at me and said do people really act that way dad?

There will always be extenuating circumstances however even then we need to do what we need to do to make it right. There is a Chinese saying "if you always do what you always did you will always get what you always got."

A customer wanting to hold you to a misprint or erroneously posted price is a case by case issue the dealer or business must address. However when it is blatant and happens consistently (BBB Files) over time there is an underlying issue that needs to be addressed. BMW Corporate should be more diligent.

One of the reasons for eBay’s success up to this point is they have tried to be diligent on maintaining their reputation as a safe, reputable market place to do business for both sellers and buyers.

This one case made the Internet as all the planets were lined up properly. This issue in various ways comes up often every day across the country and this is a reason many consumers are wary of dealing with dealerships and they have the reputation they have.

I remember calling a dealer in Rhode Island, ordering a vehicle for a client in November of 2007. He did not have his new inventory on line and I went to the OEM site, punched in the zip code and viewed the information, there were three dealers within the area. I called from out of state the 800 number which did not work from out of state and there was no other contact number. I created a yahoo email account and sent in the VIN # and made an offer based on my knowledge of the prices, cash deal, no trade. I received 6 emails, none of which acknowledged my offer the first day, 2nd day I received 8 more. All emails sending me information on warranty deals, insurance, walk-arounds, etc etc; basically junk. I found the local number via Google and called the manager and asked what in the world he was doing. He claimed he did not know where the emails were coming from and expressed ignorance, ok your ignorant of what is going on what are you going to do?

I placed a call into the OEM Corporate Office and spoke with the manager of the NE dealers, explained the issue. To his credit he contacted the dealer and CC’d me. I ordered the vehicle for my client from a competitor of his with an explanation of why he was getting the business and CC’d my client on all the correspondence.

We should encourage more customers in the industry to post the negative experiences as well as encourage them to post the great experiences they have. Each OEM should have a site where the consumers can post their experiences on dealerships they deal with. Encourage them to go to properly monitored sites and express their thoughts and views. Like BBB and CR this will give consumers a chance to work with legitimate business that believe and practice “reputation management.”

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    Doug in Michigan
  • March 28, 2008
I am unfamiliar with the nuances of posting eBay auctions; so this
may be an uninformed question. Please be gentle. I am trying to
learn from their mistake.

In reviewing Husker's ad, it seems that they listed the M3 in
"BMW Other" Correct? Incorrect? If I am correct; it strikes me as
an odd listing choice for a high-demand, boutique vehicle.

Unless the screen-shot on M3 has been faked, doing it as a No
Reserve auction is certainly outside my comfort envelope - but
certainly a way to spark attention. Bragging about "NO RESERVE"
on the [Buy It Now] button certainly complicates the "mistake"
defense.

I hope my assumptions are faulty. Anyone able to explain the
nuances of eBay posting to the uninitated?



A
Doug - you may say you're unfamiliar witheBay, but I think you picked up plenty for someone new to eBay. It wasn't a screen shot - the eBay listing link in this initial posting is the actual eBay listing. Yes, it is strange they listed it under "Other", but I think that is a setup fault in the eBay listing vendor they're working with. You have to manually key-in "NO RESERVE", so that was definitely done intentionally....unless their eBay listing vendor has a feature that does this automatically?

I hope this helps to affirm your assumptions.
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    brian chang
  • March 28, 2008
Here is the latest news from bmwblog:

http://www.bmwblog.com/2008/03/26/update-the-m3-ebay-winner-notifies-bmw-north-america/

Fil keeps digging himself a deeper hole.
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    Doug in Michigan
  • March 28, 2008
Alex,

I am only new/uninitiated with respect to posting auctions. I use
eBay irregularly ... and then typically look for items that are being
overlooked by others due to substansive typos. I once got a heck
of a deal because nobody else happened to notice a Garmin GPS
that was posted as "Garmen GP S". Frankly; I was surprised when
the seller delivered without so much as a whimper.

I suspect that Husker did not get any bidding because prospective
M3 buyers never thought to look in "BMW Other".

J
  • J
  • March 28, 2008
"WE RESERVE THE RIGHT TO CANCEL ANY BIDS AT ANY TIME FOR ANY REASON" - This leaves them a little room (very little room) if things progressed through the court systems, however attorney fees, court costs, and most importantly the future business that will be lost by the dealership will cost a lot more than eating the $10k short term loss. At this point it's probably too late for them to make it right no matter what happens. Gone are the days where a dealer's worst fear is buyer's remorse - these days an isolated incident like this can sink a dealership.
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    Greg
  • March 28, 2008
Folks, it's not over yet. Hukster has brought in a new lawyer to send a naster letter. Take a look at page 91.
A
Wow Greg. I just finished reading every post since page 91. Now that I know the Husker group is part of a larger group, a group I have a lot of respect for, I'm even more torn. I hope this whole thing gets cleared up soon.

Maybe my little voice is meaningless in the whole scheme of things, but I think a level-headed representative of the dealership should post a public statement in every area they can. There obviously is another side to the story, but the masses aren't hearing it. With the other side of the story made as public as it can be made, I think it will calm people down.

I also noticed someone posted a link to this article in that M3 forum thread - very cool! It looks like a few of the participants like some of the things being said on Dealer Refresh!
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    Jeff Kershner
  • March 29, 2008
I'm not sure an isolated incident like this can sink a dealership (of course depending on how they dealt with it) but it can get them some publicity for sure. I have not doubt there are 2 sides to the story (there always are) and I think our stance here is neutral. I would hate for this to happen to any dealer but we all learn from our and hopefully others' mistakes.

What's funny is; I read that due to the publicity, the floor traffic at the dealer has been tremendous and they have had a great week with sales. I can't validate this but It's believable.

I'd be hiring one of the brightest marketing firms in the business and figure out how to someway turn this bad publicity into a something positive, it would have to be edgy...but I think it could be done.

I too was not aware that this dealer was part of a larger dealer group that I too have a lot of respect for. No doubt about it, it sucks. But it happened and we are all learning from it, not matter what side of the story is has more weight to it.

Jeff
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    Gerald
  • March 29, 2008
Looking at the auction, I see a systemic situation here- a laissez-faire attitude which is underlined by their complete inattention to the auction while changing the buy it now price and by the photos. Look at the quality. I have seen better photos of used stereo equipment than what these folks used to list a $70k+ vehicle. I would think they would break down and get at least a 1-2 megapixel camera for their photos. On top of that is the arrogance of the manager laughing at the customer, thinking they are above the law. Too common.

The thing that really irritates from an eBay standpoint me is too often, I have been on the other end of one of these auctions. In September alone I had 14 vehicles "sell" on eBay, and for one reason or another, 5 were not delivered. What recourse do I have as a dealer on those 5 deadbeat bidders? NONE. eBay needs to step up and support the businesses listing items and I think they have taken a step forward with their new feedback policies.
J
There are internet wildfires going on all over the place. Old school operators are getting tazered by angry customers that now have a method to vent.

WASHINGTON, D.C. — Ricart Automotive has agreed to drop a lawsuit it filed against an angry customer who created two anti-Ricart Web sites to log customer complaints about the dealership. http://www.citizen.org/pressroom/release.cfm?ID=537

Ricart has spent $100k in legal fees to take down 2 sites and this Ohio State University graduate student has made Ricart public enemy #1. See his site at www.columbusconsumer.com, its amazing.

Joe
J
A MUST SEE for those that don't get it.

http://www.youtube.com/watch?v=4ITE7ITSR6M&

Step by step, the One of the most compelling, educational, well constructed ___sucks.com videos I have ever seen.

It's critical that management must recognize "the new world order". Customer service is now deeply connected to Reputation Management.

BE PROACTIVE. Doctors that are sued the least are the ones with the best bed side manner. And when the wheels fall off the car... bend over backwards right upfront! The 1st loss is always the least loss.

Joe
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    Jeff Kershner
  • March 29, 2008
Thanks for the link to that video Joe. Very interesting.

Here is the link again.

http://www.youtube.com/watch?v=4ITE7ITSR6M&
G
Seems to me the best thing to do in a situation like this is to take the hit and move on. The dealer screwed up and they maybe legally able to avoid not delivering the car, but it is not worth the bad viral mojo that they are getting online. If Nixon would of copped about Watergate and Clinton about Monica, they wouldn't of taken the hits they did.
 
It would of been great PR for them to fess up and made a commercial with the ebay customer about how honest they are and live up to their  commitments. Instead they are facing the heat.
E
Gilbert -

You're spot on w/your comment about an immediate reaction - looks like they missed the window of opportunity to simply fess up, take ownership (and the lumps) and embrace their new-found viral "celebrity" status.

Jeff and Alex - nicely handled on your part.

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    Doug in Michigan
  • March 30, 2008
Quotes are from other posters here; my observations and
follow-up questions are in-lined and prefixed with "::"

"winner was contacted, by email, with the the statement
"Congratulations"

:: I believe that this is an automated eBay feature and happens
:: essentially, instantaneously. It certainly does not help Husker.

"Then that email was followed by a second email and phone call
stating the listing was an error"

:: And an alledged boast that eBay will side with Husker because
:: they are part of a multi-billion business group. Was mgt aware?
:: Apparently, not yet.

"... it happened and we are all learning from it, not matter what
side of the story has more weight to it."

:: That's why I'm here. I'm thinking of old nautical charts where
:: cartographers noted, "There Be Dragons Here." Those cautions
seem appropriate for eBay and internet sales.

"I think that is a setup fault in the eBay listing vendor they're working with."

"It only takes 1 person, 1 posting to really screw things up."

:: I agree. It seems that VT allows their GMs the discretion to
:: choose if/how to run their eBay and internet stores.

:: The post by the BMWCCA President in Lincoln was enlightening.
:: After visiting the store and chatting with those involved, his
:: (calming) post implies that their internet guy was operating
:: both solo and unsupervised - and that he initally tried to hide
:: the auction problem(s) from mgt.
::
:: I am wondering: How well did mgt truly know their employee?
:: Did mgt realize the potential risk(s)? How diligently did mgt
:: select and train for this role? All rhetorical questions.
:: Specific answers are not expected, general discussion is
:: appreciated.

:: I am not suggesting that posting on eBay requires the rigor and
:: procedures of USAF Missle Lauch Officer teams, but an eBay
:: rep that is operating solo has fewer checks & balances than the
:: typical retail sale. Maybe I'm reaching too far with this next
:: point - casino security is exceptionally wary of possible
:: undisclosed relationships between dealers and cheats. Should
:: mgt consider more scrutiny of their internet auction practices?

:: In the apparent chronology, lawyers for both participants are
:: engaged now. They agree to close the deal at the auction terms
:: and instruct the buyer to contact the GM and pay the deposit.
:: It is alledged that the GM refused the deposit. If true, boy
:: did Fil ever miss an opportunity. I can imagine what he was
:: going thru, but that alledged action strikes me as having been
:: the tipping point - the alledged moment when the campfire
:: began to grow.

:: If either party recorded that call and the lawyers find it during
:: discovery ... game over for whoever is lying. Given that NE is
:: the home of many call centers, I will guess that single-party
:: notification rules allow for permissive recording (by Husker).

:: Caution; changing topics slightly ...
::
:: It seems their eBay sales guy also has two MySpace pages,
:: one of which could pose an ethics challenge for an Eagle
:: Scout. He seems ripe for a Honey Pot attack. i.e. an
:: ESPECIALLY knowledgeable customer [cheat] could have
:: targeted him for hardball negotiating [extortion] to keep this
:: matter away from his wife. If his wife didn't know and approve
:: of his MySpace friends, "Sorry," is unlikely to be satisfactory.
::
:: It is unlikely that mgt will ever know if a trusted, solo internet
:: rep is being extorted to choose between his wife and family
:: vs. the possible loss of paycheck. If he takes the high road and
:: reports it to mgt; and mgt then choose to engage LE, it wil be
:: virtually impossible to keep it from the media. Few wives will
:: hang around for public humiliation.

:: In this stream of conciousness post, it seems to me that
:: internet sales reps are especially vulnerable to extortion.
:: Everything needed to assess their possible vulnerability is
:: available to anyone on internet. And that assessment can be
:: accomplished siliently and anonymously from a distance. I
:: wonder if mgt knew he had a MySpace page?
::
:: MySpace is just the tip of the iceberg. Many states have
:: websites that allow broad searching of criminal histories.
:: Yup, There Be Dragons Here.

:: The various eBay and internet listing services and sales training
:: vendors are almost certainly building Powerpoint decks and
:: preparing to storm the gates with packaged "solutions" for these
:: matters.

"I'd be hiring one of the brightest marketing firms in the business and figure out how to someway turn this bad publicity into a
something positive, it would have to be edgy...but I think it could
be done."

:: I agree, but think that the Honest-Abe approach would be more
:: effective in Corn Country and the Rust Bowl. Edgy would
:: certainly be effective for large metro/urban markets.

N
  • N
  • March 31, 2008
Wow... this one has got around eh? Mistake #1 - Never, ever, ever, ever forget to set a reserve.

Thanks for blogging this Jeffrey... good stuff.
J
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    Jeff Kershner
  • March 31, 2008
Jeffrey?

Only my mother calls me "Jeffrey" !! HAHA
W
I was thinking of putting photos of dealership personnel up on our website, but not now. Who wants to be turned into a puppet?
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    Doug in Michigan
  • April 1, 2008
> I was thinking of putting photos of dealership personnel up on
> our website, but not now. Who wants to be turned into a puppet?

I agree.

In case there is any confusion, there were two videos; the Husker
GM's own "Welcome" video on their website and the YouTube
parody.

There is something to be learned from the GM's video. His
choice of hair style, over-gel'd & spiked, became another
lightning rod, driving further comments & parodies. Too
stereotypical, especially for his age. It might have been okay
for a Scion GM in an urban, hip-hop market. BMW? No. Corn
Belt? No.

Husker pulled the GM's video from their website early in the
chronology, but by that time, it had already Jumped the Shark.

M
All the comments and postings about dealers needing to protect their online and traditional reputations are on the money. With the growth of automotive social networks dealers really need to consider the negative consequences of their activities.


B
Looks like the car has been delivered according to the thread on the bmw site
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    cathy Michigan
  • April 16, 2008
I've been reading this blog for months. I can't resist commenting on this one.

I was really glad to see GIlbert's post. This was a real PR opportunity lost. There have been many similar examples in other industries. Some companies saw it as an opportunity and got all kinds of PR worth millions.

Toyota did a good job a couple three years ago. They came right out, admitted they'd made a mistake in real human language, not filtered corporate PR crap. They apologized and got tons of kudos from the online community.

You may remember the Tylenol scare. What a horrible thing for people to die from using a tampered product. Tylenol faced it head on , did the right thing as best could be done. They're still a trusted product.

There are lots of other examples good and bad over the years.

So many things are changing in today's world. There's so much transparency so much conversation and openness. That sounds like a great world, as long as you can see mistakes as an opportunity.

Thanks for this site, I've enjoyed reading it and hope I deserve your welcome in leaving my 2 cents.

Cathy
R
I am not sure this video embed link will show up... But, if it does, imagine the reputation management implications!

Send your own <a href='http://www.elfyourself.com' rel="nofollow">ElfYourself</a> <a href='http://www.jibjab.com' rel="nofollow">eCards</a>
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