Toyota: How Negative Customer Experience Can Destroy A Great Brand

2004-2007 Toyota Prius photographed in College...

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In 2005 I bought a Prius. Its been a tremendous car. Fuel efficient, quiet, inexpensive to run. In fact it was so good I decided that when it hit 100,000 k’s instead of trading it I would keep driving it. At 140,000 k’s I thought I would find out how much it would be worth as a trade in on a new Prius. I was offered $10,000 and thought, “Why bother when it is cheap to service, cheap to run and is paid for. Might as well keep driving it”.

Just before it hit 200,000k’s a warning light started coming up on the dashboard. It was due for a service, so I took it in to the dealer who serviced it and asked them to check what the problem was. They serviced the car but said that there was no record of any problem recorded in the memory of the car’s on-board computer and that therefore it could not be a problem that required any service response. It was general warning light.

After the service the light didn’t come on again until just before the next scheduled service at 210,000 k’s. I took it in for its service. Asked again for the dealership to look into it. Same response: “There can’t be a problem because, (a) we can’t replicate it (I had given the dealership very specific instructions as to how to get the light to turn on – and I am convinced that they just ignored this), and (b) if it doesn’t show up on the car’s onboard computer we have no way of responding to it.

Once again after the service the light went off. Just before 220,000k’s surprise, surprise – the light came on again. This time I called Toyota’s Customer Care line to tell them that I was very concerned that I had a warning light coming on regularly and that the local dealer didn’t seem to be able to identify it.

By this time I had concluded that the real reason that the dealership couldn’t fix the problem is very simple: Their mechanics are trained to put the car onto the diagnostic equipment, which downloads all the internal system data from the car and then instructs the technician as to what to do. Its designed, I believe, to ensure the maximum efficiency and to reduce the level of human error on machines that have a fairly narrow set of operating specifications – unlike the cars of Henry Ford’s day. As a result, anything that the end-user reports on to the service manager is lost when communicating with the technician. This is important.

During the morning of the service I received a call from the service manager at Toyota in Nowra, Dave, who had very kindly picked up the car from my house that morning. He called to tell me that he had seen the warning light coming on during the time that he had driven the car, and consequently had stood by the mechanic at the time that the oil change was taking place. Apparently there wasn’t much oil in the crank case according to Dave. The verdict was that the engine was burning oil.

Now this is not really surprising in a car that has done 220,000 k’s with normal wear and tear. But what was really unsatisfactory from my point of view was that it took the dealer three services to actually pay attention to what I was saying, and it still wouldn’t have been diagnosed unless Dave had stood and watched as the mechanic worked on the car. My take on things was this: If there is a problem I want it fixed before it gets worse. If the “experts” don’t actually respond to me as the user of the car when I say there is a problem and the vehicle gets worse as a result, of if there was an accident as a result, then who is at fault?

  • Is it me as the user of the equipment who has diligently reported the fact that a warning light shows on the dash?
  • Is it the dealer who services the car?
  • Is it the mechanic who slavishly follows the instructions from the car’s onboard computer?
  • Is it the manufacturer who puts warning systems in the vehicle but doesn’t provide for the warnings to show up on the service computer?

I thought I would take it up with Toyota’s customer care people. I called them a number of times during this period and reported on the whole experience. I told them that I was rather unhappy and that I felt that there was an internal management system failure that needed to be addresses, and that I thought that Toyota should contribute to helping fix the problem – by helping contribute financially to identifying and fixing whatever mechanical problem was now present.

The phone staff at Toyota were quite terse. Not rude, and not at all disrespectful, but definitely put out that they had a customer on the phone who actually wanted them to do something.

In the meantime I had decided that I had several options available to me:

  • Get the engine stripped and fixed (total cost unknown but with a quote from Nowra Toyota just to take out and strip the engine of $1300)
  • Take out and replace the engine with a reconditioned engine (cost approximately $2,300 quoted by Nowra Toyota)
  • Keep on driving the car (I spoke to a friend who runs a Toyota dealership and who I have bought 5 new Toyotas from over the years. He told me that it was probably a pretty low intensity problem and I could deal with it by just putting the vehicle in for an oil change every 7,500 k’s instead of every 10,000k’s)
  • Sell/Trade the car and buy another.

I started looking at my options for a replacement vehicle, and last Friday came very close to buying a Rav4. However, on my way to the dealership in Sutherland where the target vehicle was located, I decided to call Toyota one more time to find out whether they were going to come to the party. The customer care person I spoke to was so useless and stroppy that I got off the phone resolving that if Toyota didn’t change its tune I would totally disengage from the brand. So I sent a text message to the dealer saying the deal was off and turned the car around and headed home.

On my way back I got a call from the Toyota customer care manger, Dennis Smith. He was pleasant but was clearly not going to bend on anything. I explained to him that unless Toyota was prepared to acknowledge that there may be either a computer system problem or a management system problem they would lose me as a long term customer after a total of 8, count ‘em,  vehicles (1 new Prius, 1 new Echo, 1 new Corolla, 3 new Landcruisers, 1 new Landcruiser truck, 1 second hand Corolla). He offered me a $100 service voucher as a token of good will, with the rider that he hesitated to even offer it to me because he thought that I might be insulted by it.

I wasn’t insulted by the offer, but it fell a long way short of what I would have expected at a time when I was seriously in the market to buy yet another new vehicle.

I told him that as a result of Toyota’s actions, or non-actions, they were about to shift a customer who had been a strong brand advocate for a long time into an extremely highly motivated brand critic.

I then went on line and did some really serious comparative research into price, performance, customer reviews etc for a number of AWD vehicles in the price range that I was looking at. That led to me going out and test driving 2 – the SsangYong Korando and the Kia Sportage (I had discounted the Hyundai ix35 from a drive because it is essentially the same vehicle as the Kia and the diesel engine for the Hyundai is build by Kia).

I ended up paying a little bit more that I had originally intended and purchased a Kia Sportage.

What is amazing about this story is that it just goes to show how a brand that can overtake the powerhouse global brands (in this case Ford and GM) based on a vastly superior manufacturing quality assurance model, can also fall foul of an inability to maintain an equivalent customer care model.

It almost seems like Toyota built up so much self-confidence as a brand that it couldn’t even consider its vehicles getting recalled. I think that they must still be in denial about the series of disastrous and very expensive recalls of the last couple of years. Its like the case of the banks in the US that didn’t factor into their risk modelling the possibility of real estate prices going down. When one hedge fund found this out they saw that there was a potential to take a bet against the house and win. Toyota is in the same spot.

When a company is prepared to sacrifice a long standing customer’s loyalty to a brand, and turn him (or her) against them for heaven knows what internal reason, you have to wonder why anyone should support that brand at all. They are no different to the giants that have been before them, who have failed: EMI Records who had the Beatles and the Beach Boys and who knows how many great acts, and failed. General Motors: (remember when they used to say in America, “What’s good for General Motors is good for the country”. GM had to be bailed out by the government. RCA who used to virtually own the whole ecosystem of transmitting and receiving equipment. Who hears of them now?

Companies reach a certain size and then feel that they don’t have to be in touch with their customers any more. When they do they fail. In Australia people who work for Toyota’s manufacturing operations wonder whether the federal government will keep writing checques so that they get to keep their jobs. That money comes from you and me as taxpayers. I don’t want to see anyone lose their jobs. But you can’t expect for companies that don’t understand that the corporate pyramid can only survive when it is upside down. At the top is the vast number of consumers who engage with the brand. At the bottom is management.

Toyota’s management and its policies are out of touch for it to remain in balance. Therefore it has only one way to go, to topple and fall.

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