Calming buyers after canceling their perks

Garff: "Different than what others do"

Customers who bought a vehicle from Hooman Toyota of Long Beach, Calif., were told they could get free oil changes, "tires for life" and other perks that the dealership said were worth nearly $7,000.

Then the dealership was sold, and the new owner declined to continue the perks. That turned the former loyalty-building "VIP" program into a big headache for the dealership groups on both sides of the transaction. The sudden switch-eroo prompted irate owners to vent on social media. A local TV station aired an unflattering news segment on the now-invalid offers.

The angered buyers include Adam Fukuyama, who bought a Toyota Tacoma just days before the dealership was sold and moved about two miles away. Fukuyama said the free benefits were a big reason the dealership got his business in June, a year after his brother bought a Tacoma there.

"I asked the sales guy if the VIP program would be honored if they moved and sold to new owners, and he said yes," Fukuyama, who posted a one-star review on Yelp for the store, now called West Coast Toyota, wrote in an email. "I asked a few times actually, and he said yes every time."

The dealership's new owner, Ken Garff Automotive Group, has been working to calm frustrations and win customers over since taking possession in early June. It studied the VIP program while negotiating the deal. Executives, realizing the change would be unpopular, proactively held coaching sessions with managers and trained front-line employees -- many of whom stayed through the ownership change -- on how to respond when people complained.

"What we do in our company is going to be different than what others do," John Garff, the group's president, told Automotive News. "If for every store we bought we adopted the prior dealer's differentiation strategy, we would be all over the map."

Ken Garff Automotive Group of Salt Lake City ranks No. 8 on Automotive News' list of the top 150 dealership groups based in the U.S. with retail sales of 71,703 new vehicles in 2015.

Very important perks
Hooman Toyota promoted its VIP Customer Privileges program as saving an average customer $6,747 over 5 years. Here's what was included.
Oil changes $657   Loaner vehicles $390
Tires for life $1,650   Express shuttle $300
One car wash, vacuum per week $3,750   Flat-tire repair, road hazard replacement Not estimated
Source: HoomanScion.com

Former owner Hooman Nissani, president of the Hooman Automotive Group, said he offers similar perks at his six other dealerships but can't honor the deal for his former Toyota customers because Garff inherited them. 

"They bought the customer base, so we couldn't promote something like that," Nissani said. "The customers are not mad at us. They're just mad at the situation." 

John Garff said staff members have been monitoring the issue closely, quickly responding to negative reviews and social-media rants. 

West Coast Toyota addresses the ownership change on its website, offering Hooman customers discounts on maintenance packages and every fourth tire free. It also explains that Toyota Motor Sales U.S.A. now gives free oil changes for the first two years. 

Those actions appear to be calming the storm. 

Of the 58 calls received one recent afternoon and evening, only one was related to the VIP perks, Garff said. Though the program was heavily advertised, it wasn't part of a buyer's contract and there was no cost or enrollment process, so there was no obligation that new owners continue it, he said. 

"What we do owe them is the dignity and the respect to listen to them and do what we can to make it right," Garff said. "The most important thing is to work one-to-one with each customer to earn their trust and earn their business."

You can reach Nick Bunkley at nbunkley@crain.com -- Follow Nick on Twitter: @nickbunkley

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