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Dear Volkswagen

VWlogoDrew McLellan is the Top Dog at McLellan Marketing Group

In case you missed it -- VW is in trouble. Here's a rundown of what happened and what I would tell them to do, if they asked:

Volkswagen is facing huge fines, its reputation is in tatters, and now CEO Martin Winterkorn has stepped down.

The company cheated diesel emissions tests in the U.S. for seven years.

It did so through a nifty piece of software that could identify when the car was being tested and reduce harmful exhaust so it looked as if the car met requirements, when in fact it did not.

Volkswagen was caught by independent testing carried out by a clean-air advocacy group, The International Council on Clean Transportation, which, ironically, tested the cars because it thought they were such a great example of how diesel could be a clean fuel.

The company originally disputed the test results, "citing various technical issues," but it implements a voluntary recall of nearly 500,000 cars to put in a software patch it says will fix the issue.

On September 3, VW finally confesses the fraud to the EPA and CARB and admits gaming the emission tests. When the market opens the following Monday, VW stock plunges over 20 percent and Volkswagen experiences its biggest one-day drop in six years as a potentially huge fine to the company spooks investors.

A day later, Volkswagen admits that the issue is far more widespread, saying it could affect 11 million cars. Once again, the shares go into meltdown, and another 20 percent is wiped off the value of the company. 

Volkswagen issued a profit warning setting aside €6.5 billion to "cover the necessary service measures and other efforts to win back the trust of our customers." It adds: "Discrepancies relate to vehicles with Type EA 189 engines, involving some 11 million vehicles worldwide."

So to say they're in trouble is a bit of an understatement. So here's my letter to the VW leadership:

Dear VW leaders,

The good news is -- there's no way but up. Many companies have survived this sort of corporate deceit. But what you do next will make or break you. Here's my recipe for your survival.

Identify a spokesperson who is believable and likable: This needs to be someone from your senior ranks who can convey not only your regret but your concern for the harm that your fraud has potentially caused.

"No comment," evasion and half-truths are off the table: Your only hope is to be as honest, straightforward and remorseful as possible. Your spokesperson has to be told the whole truth and they have to be encouraged to share it -- no matter how bad the truth may be. Proactively tell us the bad news. Do not wait for it to be discovered.

Be ready to over-share for a very long time: When you get caught lying you lose the right to your privacy and your secrets. We get to know it all or you have to decide you want out of the equation. And we don't want to have to ask -- you have to just offer up more information than you believe we have a right to know.

Turn this into something good: Fortunately for you, the world loves a redeemed sinner. So you need to decide how you're going to demonstrate that you're not only sorry you got caught but how it's changed you. How will you use this incident to make the world a better place?

Stay very visible: Whenever we can't see you, we assume you're up to no good. Stay in the media. Keep us over-informed. Do not go dark or silent. You want to be so visible that we actually get sick of hearing from you. 

Take it on the chin. Over and over: You are going to be raked over the coals by the media, in social media and by your customers. Let them vent. Hear their anger and disappointment. Apologize. Again. And tell them how you are going to make it better. For as long as it takes.

Remind us that you're good but just made a bad choice: Reconnect us with your brand and all the good it has done. Connect us with the happy memories of your iconic vehicles and how we felt about being your customer. Don't let this mistake become your brand. 

There's no shortcuts, no easy way out and no glossing over this. You need to just gut it out and let your new choices, behavior and habits re-earn our trust over time.  Lean on the brand equity you've earned but realize that its foundation is very weak right now.

Other brands have survived worse. But you have very little of the consumer's grace left. Be the brand they want to believe that you are -- every day in every way and be patient.

This is going to take awhile.

 

Comments

Drew

You are right on but why do so many companies who get in this situation continue to lie and not act remorseful? 60 minutes did that piece on lumber liquidators and the founder said he was on it and heads will roll. Don't know where it went but I liked his honesty.

Hey Rob,

I can't explain it -- you'd think they know better. Even if they aren't remorseful, surely they are smart enough to fake it.

Perhaps the arrogance is just difficult to shed?

Drew

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