Wednesday, June 13, 2012

Killing your customers is bad for business

Aftermath of the rental car crash in which two sisters died
More than two years ago, a story about two sisters killed because their Enterprise rental car had been recalled but had not been repaired was in the news. A jury awarded the girls' family $15 million. Enterprise, the nation's largest rental car company, suffered a brief blow to their public relations when the award was publicized but the death of the two girls did not prompt changes to rental car company practices.

They still rent and sell cars without fixing safety recalls. 

What kind of corporate culture exists within the rental companies that continue to rent unsafe cars? 

When companies are willing to risk the lives of their customers, the message is clear: your money is more valuable than your life. How long can companies who risk their customers' lives stay in business? How long will people continue doing business with companies that show such disrespect and lack of trustworthiness?

If they are willing to risk the lives of their customers, what do you think their internal corporate culture is like? It would be reasonable to infer lack of respect for employees is inherent in those cultures too.

This is an example of companies putting one stakeholder--investors--above the rest. Customers have died, yet significant changes have not taken place in the industry. 

There is something wrong with an industry that refuses to keep its customers safe. There is something wrong with companies who refuse to honor safety recalls until their customers find out about it. At some point, customer trust will be eroded beyond repair. Where will the industry be then? Which companies will remain?

Senator Boxer is asking the rental car companies to pledge "a permanent commitment to not rent out or sell any vehicles under safety recall until the defect has been remedied." Hertz agreed to sign the Senator's pledge but other companies have not. Enterprise has not, saying they already have such a practice in place (but it allows for the sale of unrepaired cars to be sold wholesale). No word yet on whether Avis or Dollar Thrifty will join the pledge.  (SOURCE: USAToday article)

Senator Boxer is drafting legislation to force the rental car companies to repair cars recalled for safety. That such legislation is needed is pitiful.

Customer lives don't matter to some of the companies, but their wallets do. 

What can you do?
  1. Find out your rental car company's policy on safety recalls. If they do not honor the recalls, switch.
  2. If your employer rents from one that does not honor recalls, switch. 
  3. If you are responsible for your employer's selection of a rental car company, investigate this immediately. You may be inadvertently putting your coworkers at risk, and the company along with it. 
  4. Spread the word about this issue to frequent traveling friends and colleagues. They might assume rental cars are repaired and would appreciate learning the truth.
  5. If you work in one of the companies, address this internally. Assess the culture of distrust created and work to rebuild trust with your customers and employees. Realign the focus on all stakeholders, not just investors. Investors won't be happy when customers refuse to trust you, so realigning focus will benefit all stakeholders.
As an employee and customer, put your money where your trust is by showing the rental car companies that killing customers is bad for business.

If your company needs help with stakeholder alignment, please call Kelly Tyler. She will share a diagnostic tool to aid your effort and could save the company from losing customers, employees, and investors.

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