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JBRsantamonica
08-15-2002, 05:21 PM
customer service, bad capital allocation decisions by planning for huge growth during a recession (too much excess capacity)--these are classic signs of a company that is in deep trouble. Reminds me of Enron, Andersen, Worldcom, etc. I would not be surprrised if we soon see a major scandal or governance debacle of some kind at BMW.

Randy_G
08-15-2002, 05:24 PM
Any luxury car company that lets dealers treat people the way BMWSF has treated me is definitely headed for big trouble, if not already there.

JBRsantamonica
08-15-2002, 05:42 PM
great point--they have zero control over their dealers. 90% of the dealers in their largest U.S. market, Southern California, provide completely unacceptable sales and repair service.

MDork
08-15-2002, 05:48 PM
the service manager gets a phone call and the service advisor loses commission...so they do try---bmw hit record sales figures last year regardless of the garbage economy...i think it would be worse if they didnt reinvest the added capital into new products/technologies...bmw is the hottest marque in the industry right now...without question

the cars are still high quality (its all relative...just talk to an x-type owner)---and looks are all subjective IMO...i have had horrible dealer experiences also (dont get me started)...but i made my complaints to bmw na and found a dealer with great service in my area---being in norcal there are plenty to choose from---i feel sorry for those who dont have a choice and get stuck with idiots---


<br>

-scott
02 sg/blk m coupe
bone stock (more or less)

StoneWalk
08-15-2002, 06:10 PM
BMW's customer satisfaction rating system is a mess.

BMWNA tattles every single word you say right back to the dealer with your name on it, both for car purchase satisfaction, and service surveys. This allows the dealer to retaliate and/or extort good scores, which is how the system tends to be run.

If BMWNA was interested in _actually_ knowing how things were going in the field, they would allow both on-the-record and off-the-record feedback. You could take specific issues public and have the three parties discuss. You could also report bad service without fear of retaliation. BMWNA appears to have ZERO interest in actually learning how things are really going on. If they were interested, a college freshman student could be hired to teach them how to conduct a meaningful survey free from bias.

Randy_G
08-15-2002, 06:21 PM
Although I tried to make it clear to the person that did the phone survey about my new-car purchase that I was *NOT* trying to downgrade the dealer in Boston, the low scores I gave for my horrible, and still ongoing, delivery experience went on HIS rating sheet, even though he had absolutely nothing to do with the delivery. I know, because he told me about it today. This is insane. The people who do the ratings don't even work for BMW, and they do NOTHING but write down the numbers. And obviously, the dealer knows exactly WHO gave them a bad rating. Ridiculous. In the future, I'm going to simply refuse to answer the survey.

M3Gurl
08-15-2002, 06:29 PM

StoneWalk
08-15-2002, 06:29 PM
Yep. BMWNA does the whole courtesy delivery thing backward, and gives holdback money and sales ratings to the selling dealer who is not the one you end up interacting with.

If the rating is about how the delivery experience went, the score should apply the people who did the delivery, and if you're interested in getting real feedback you don't tattle on exactly who said what.

In your case, since we know the scores go to Boston, and he did nothing wrong, it would have been nice to give him good numbers. Bad numbers won't affect BMWSF in any way. And once again we see that BMWNA has set it up so that they are configured to learn NOTHING about what is actually going on in the field.

JBRsantamonica
08-15-2002, 06:30 PM
BMW. I was putting it off and then BMW sent me a letter asking me to send it in that was worded like I was obligated to do it and I thought, HELL no.

JBRsantamonica
08-15-2002, 06:33 PM

JBRsantamonica
08-15-2002, 06:35 PM
can change fast.

MDork
08-15-2002, 06:39 PM
<br>

-scott
02 sg/blk m coupe
bone stock (more or less)

eatapc
08-15-2002, 06:41 PM
Bad customer service. Bad styling decisions. Disaster with Rover. OK, problems.

OTOH, record sales last year; willing to take chances on pushing the outside of the engineering envelope; great brand introduction with Mini Cooper; great heritage.

And how does this remind you of Enron, Andersen & Worldcom? I fail to see even the most remote connection.

P.S. Most companies have excess capacity during a recession. That's hardly a scandal. And having the capacity when the recession turns around is not a bad thing. Introducing bad cars like the 745i does not bode well, but that problem is fixable -- unlike the Enron business model.

M3Gurl
08-15-2002, 06:42 PM

MDork
08-15-2002, 06:45 PM
yet bmw cant make them fast enough to satisfy demand...an article posted earlier mentioned that the new 7 is selling faster than when the old one was introduced back in the 90s...sure plenty of people hate the styling and i-drive...but there is genuine interest...

the 1 series will be a HUGE success...as will the x3---im not as sure about the new 6...new 5 should do well (hopefully they dont put the stupid grand am front end on it)---

my only concern is that with all the new models...dealers will need more people to service&sell which might make the experience even worse as the need to hire might overpower the need to qualify good workers...also, with more of the manufacturing being outsourced in some cases...it may be tougher to ensure quality..but i think bmw is aware of this<br>

-scott
02 sg/blk m coupe
bone stock (more or less)

StoneWalk
08-15-2002, 06:46 PM
Information that the bay area dealers are slime has been available here for years. Has BMWNA done anything tangible?

Same for gouging. BMWNA whines that it can't do anything, that they are locked into providing M3's to gouge dealers no matter how the dealer acts by the franchise contracts that they themselves wrote.

Anyone wanna guess what's happening with the brand new Mini dealers? There was a HUGE competition among all BMW dealers to get the limited number of Mini franchises. Anyone wanna bet if BMW used this leverage to indicate that anyone who takes a Mini franchise will have to hold the line at no more than MSRP? Evidence on the window stickers of Mini's indicates they did not. Which makes you wonder what BMWNA has learned about serving the _customer_. If you actually want your product to thrive in your market, you would rationally set it up to be handled by the MOST EFFICIENT dealers out there. We have lots of dealers willing to sell at no more than MSRP, yet BMWNA sets up the playing field such that large supplies of cars are hard-routed to dealers who gouge their local populations.

BMWNA had to be told for months on this board and by dealers and customers that they'd put a reverse beep on the SMG with alarm. This was a US-only feature that BMWNA themselves created, and it still took the better part of a year to come to grips with.

As far as I can tell, BMWNA mostly cares about this board to avoid negative publicity. Taking PRO-ACTIVE motions to improve the dealer network, write a rational order guide, improve the post-purchase survey process, and a dozen other subjects they get hit with on here does not appear to be within their mindset.

Shall we discuss BMWNA's boycott of Topaz paint in 2001 on the M3? They read it here before the car was even launched, and didn't change it one bit. Makes you ask: What goal was served by refusing Topaz, and who made the decision which went "Clearly people in the US are upset about us refusing to allow several paints and trims which are available in every single other country in the world. We're going to stick with refusing to import these things because we like it that way, and we hate making it look like we were wrong. Plus we have to do something - just bringing over all the European colors and trims would imply that we add no value - we're going to show we know how to serve our market by boldly reducing their choices!"

jurgs
08-15-2002, 06:46 PM
As a salesperson, it can be very difficult work with the scoring system BMW has in place. You can score the questions from 1 to 5, but BMW considers anything less than a 96% average for the month to be poor. At my particular store, we only get half of our bonus money if we get below a 98% average and nothing if we get below 96%. And a 4 scores out as a 75%. So having just a few scores other than 5's on your monthly report can potentially cost the salesperson a good amount of bonus money(depending on the dealer). My suggestion is that if you have a problem with the sales experience, please discuss it directly with the salesperson and let them try to make it right. If they don't, then use your good judgment and be fair when answering the questions. Also, you can make comments(negative or positive) which are directly transcribed and reported along with the scores. However, these comments don't affect the scores. This would be a good way to air your displeasure without hurting your salesperson.

JBRsantamonica
08-15-2002, 07:08 PM
the magnitude of their lack of alignment between strategy and operations. Enron promoted themselves as a company that leveraged technology to unlock value for it's customers and shareholders, but actually they were a house of cards built on unethical and/or illegal accounting practices. Andersen claimed to be one of the great accounting firms and based this on fundamentals such as trustworthiness and honesty. They were neither trustworthy nor honest. Like Enron, Worldcom claimed to be unlocking value through superior technology and operational excellence. In reality, at the highest levels of Worldcom management their operational focus was on accounting fraud.

BMW claims to be the leading performance/luxury car maker in the world. This would imply that they focus on and excel at providing high quality products and great customer service. They are rapidly declining in both areas. The rate of decline and the scope of the problems (products, service, quality, etc.) is so severe that it makes me wonder if their management isn't focusing on something else.

I mention these companies because they were all once leading firms, and they fell apart overnight. It can happen to any firm--no matter how big, no matter what heritage--and rapid operational decline is a good sign that something is seriously wrong.

eatapc
08-15-2002, 07:22 PM
It's a very bad analogy -- that's all I was pointing out, and I think that's obvious. However, I don't want to defend BMW here.

Enron was an accounting fraud. Anderson totally abanondoned the principles of the acounting profession in order to protect their more lucrative advising business. Worldcom had a clueless CEO who didn't know how to run a business but did love to acquire other businesses -- and he destroyed them with debt. (Sorry for the cheap 25-word-or-less summary.)

BMW's acquistition of Rover may have some connection to Worldcom's acquisitions, but the fact that BMW cut their losses and moved on shows that there is nothing in common on a management level.

BTW, BMW has never, to my mind, had a reputation for good quality control or great customer service. They tried to get on that bus in the 90s in order to compete with Lexus, etc, but they have never been in the same league.

JBRsantamonica
08-15-2002, 07:28 PM
do anything with it. Every valid point you make about their performance makes me believe this even more. The M3 is great, maybe the greatest performance car value ever... designed? But BMW is in trouble on many major fronts (new products, service, management) They still have some existing lines that are the best: the 3 and the X. That doesn't sound like much does it? Two out of three p's in the marketing mix are strong: good prices (compared to MB), good promotion (print and television ads, their flash stuff on the web). Products?. And they are doing so poorly in so many other areas that I am convinced something is seriously wrong at the top.

JBRsantamonica
08-15-2002, 07:50 PM
"Worldcom had a clueless CEO who didn't know how to run a business but did love to acquire other businesses -- and he destroyed them with debt."

If debt had been the only problem they could have gone chapter 11 instead of on trial. Worldcom fradulently reported revenues and earnings in order to inflate their stock price and steal money in the form of senior mangement bonuses and stock options.

"the fact that BMW cut their losses and moved on shows that there is nothing in common on a management level."

That's proof that BMW has sound management? They won't be making an HBS case study out of that argument.

WFBMWM3
08-15-2002, 08:38 PM

WFBMWM3
08-15-2002, 08:49 PM
done this for years.
Thanks,Stonewalk, for bringing this up. This is a fundemental problem in their system. It's punitive to the customer and provides "feel good info" to BMWNA and dealers.
I have a great relationship with my dealer, but even they flaunt this system. It has to be brutal if the dealer is "worse than average."

WFBMWM3
08-15-2002, 08:56 PM

StoneWalk
08-15-2002, 09:17 PM
I of course tend to look at the customer perspective most often. But I can see how the current system is not that great for the dealer either. Basically the dealer is pushed into borderline extortion to keep their holdbacks optimal.

I continue to advocate BMWNA going to a system which attempts to measure and reward _true_ customer satisfaction. At the moment, it rewards well implemented dealer extortion.

BMWNA could easily rectify the problem with a system such as this:

o Immediately stop the practice of sending customer satisfaction scores directly to dealers.

o Change questionaire to focus directly on each step of the dealer delivery process - ask about things under their control.

o Allow dealer to attach as many as a dozen tracking codes to the cars they sell, so that they can compare scores for each salesman, but without identifying exact customers who gave the score.

o Lower the threshold for max holdback reward to a realistic level so that people can actually use the full scale of 1 to 5. 4's and higher are a good thing. Allow rewards for the top levels, but make so that the BEST tactic for any dealer is to actually make their customers happy as opposed to threatening them with lousy service if they tattle.

o Include a question about price in the survey, and heavily punish gouging in terms of holdback.

But wait - that would take actual work, and might cause tension as it's implemented. BMWNA appears opposed to these things. Why lean on dealers to do their very best like Lexus does when it's simpler to pretend you are rewarding customer satisfaction with a completely meaningless survey?


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