We gave Porsche a second chance... this was there response

As one of our kind readers pointed out, Porsche Australia appeared to have completely missed the point of our original letter. He suggested we give them the benefit of the doubt and reach out to them again to correct the situation. Here's what happened:

Second letter to Porsche:

Dear Ben - Really? Is that the Porsche Customer Commitment? How exactly is this Customer Relations Management?

It appears that the point of my letter has been lost in the translation. So let this letter be a bit more explicit. Porsche was given an opportunity to do the right thing. It was an opportunity to turn losing a customer into gaining a champion. Your response tells me you have chosen to let go of a customer that would have otherwise been loyal for potentially another 20 years.

What is a life-time customer worth to Porsche? What is the cost of losing a life-time customer compared to getting a new customer?

If you were to do a cost-benefit analysis on that, it doesn't stack up. The cost to Porsche of leaving your customer by the side of the road and losing him forever may be $0 now. But factor in the future loss of margin on sales, service and parts on all the cars he would have bought. Of course the second hand market may not be as lucrative to you, but surely you realise it is necessary to ensure upgrading existing customers to new cars.

Now add into your math the customer who was left by the side of the road that tells everyone who will listen not to buy a Porsche. If he steers only one or two potential customers away, what's the cost of that? With viral marketing today, there's a strong chance that this could get out of hand. 

Have a look at 

• this video of a 911 IMS failure that got over 500,000 views: http://www.youtube.com/watch?v=IC4Rpl0_dW8  while 
• this video of United got 13.6 million views: http://www.youtube.com/watch?v=5YGc4zOqozo and they ended up having to do the right thing after the horse had bolted. 

According to my math, the cost of losing just one customer is far more than $20,000. Imagine the cost of a good letter going viral. I already have about 50 people eagerly awaiting an update on this saga. And I have two people who have decided not to buy a Porsche - kid you not. Now imagine the potential damage when motoring publications decide to have some fun and when academics start using it as a case study of what not to do. I know a few academics and journos that will have a field day with this. Who doesn't love a good story.  

Point 1: So just to be clear - the first point is that on economic terms, it would have paid for Porsche to foot the bill to minimise the damage to Porsche's reputation that was once tied to quality.

This leads us to the second point of quality. When someone, who has plenty of options to choose from, spends 2-3 times what they would spend on an alternate luxury car, it is 'reasonable' for them to have higher expectations. My expectation in buying a Porsche was that I was buying something of higher quality. Quality is achieved by paying attention to detail. So let's explore that:

1. Your letter has my name spelt incorrectly. Thanks Been. 

2. You say my car is 11 years old. According to math, that would be impossible.

3. Forget the math, we're talking about an engine. Engines are not judged by age, but by mileage. This engine had only 85,000 kms when it failed and it had been serviced as per Porsche's schedule. Let me point out that I had, prior to this incident, spent over $5.5K on replacing numerous parts - none of which I hold Porsche responsible for because I understand wear and tear, although that's a lot of money for just one year. 

4. Forget maintenance. The part that failed had nothing to do with maintenance. It has to do with poor design and quality which is why this part has been re-designed a number of times and has been now completely designed out of the engine in the latest models. Let’s not try to kid anyone here.

Point 2: The argument you present does not stack up. Any reasonable judge or jury will agree that they would not buy a car that has an engine that only lasts 85,000 km. Even if this was the case, they would surely not buy this car for the kind of money asked in the second hand market when it already had 70,000 kms.

A key provision (s54) in Australian Consumer Law 'is a statutory guarantee of acceptable quality enforceable against the suppliers of goods (i.e. retailers, dealerships, etc.), as well as manufacturers.' Your North American operation finally saw the light, albeit after a class action case http://www.imsporschesettlement.com/, to agree to do the right thing. Is that what it's going to take in Australia? If so, move to point three.

Point 3: There is legal precedent and a legal framework that favours customers like me. We may be stupid, but we're not dumb.

All of that aside, it boggles the mind that Porsche is willing to allow its customer stories to be 'You're not in good hands when you buy a Porsche. Porsche doesn't sell quality and high performance. Porsche sells ticking time bombs that will cost you a bomb. And when they pop, Porsche will leave you by the side of the road.' Because that's the true customer experience - just search the web and I can vouch for it.

So,  

1. I have already initiated discussions with a law firm to understand what is involved in a class action case.

2. I will be sharing my story with anyone who cares to listen and will be targeting specific motoring media, web sites and academics. 

3. I will be approaching the appropriate government authorities.

It is human to err. My error was believing that I was paying for quality when I was buying a Porsche. Everybody makes mistakes, but when we don't learn from them... well you know the term for that. You can only fool the stupidest among us for only a period of time. 

The question is whether we are going to correct our errors before it's all too late? 

Over to you, once again... Please note that I will proceed down the path outlined above in a week, unless I hear back positively from you before then. I hope nothing is lost in translation.

UNFORTUNATELY THE BENEFIT OF THE DOUBT WAS UNWARRANTED. HERE'S BEN'S SECOND RESPONSE. THIS TIME HE GOT THE CUSTOMER NAME RIGHT...

Ok... next steps:

1. Lodge a case with Department of Fair Trading - DONE... stay tuned.

2. Speak to lawyers of North American Class Action settlement - DONE... Turns out Porsche settled the case very quickly. If there was nothing wrong with their cars, why would they?

3. Evaluate merits of class action case in Australia - Currently talking to a few law firms... stay tuned.

Is it any wonder that this guy donated his 911 to a shooting range?

Is it any wonder that this guy donated his Porsche 911 to a shooting range after its engine went pop - the cost of repair was more than the value of the car: 

Knowing this, would you buy a Porsche?

Did you know that Porsche engines have a ticking time bomb that can go pop at any time? We didn't. And when they pop, it will cost you an arm and a leg ($20-45K), unless you are still on a valid warranty. Given it's an engineering design flaw and Porsche pride themselves on engineering, you would think Porsche would be eager to help. 

Think again. This is how they treated a customer that had this unfortunate experience ... Here's a summary of the facts: 

• Porsche 911 2003 model purchased in Australia with only 70,000 kms on odometer - no warranty
• Added 15,000 kms during which time a few repairs required, from replacing the water pump to other smaller issues (eg engine mounts, remote keys, etc). Spent about $5,500 - acceptable and understandable
• Then on 85,000 Kms, engine fails. Intermediate Shaft (IMS) bearing failure causes catastrophic engine failure. Required either a new engine $44K or an engine rebuild - $20K. This is a known issue. Porsche North America class action settlement agreed to cover all the costs for owners of vehicles (2001 - 2005 models) with this issue.

This resulted in a letter being sent to the Porsche CEO in Germany. The CEO was too busy to deal with customers so he passed it on to his Customer Commitment Team who was also too busy so they passed it on to a Customer Relations Manager in Australia. 

He said he would investigate and asked for the vehicle identification number. But then he too got busy and six weeks passed by. The customer followed up and finally got a response but wasn't sure if it was meant for him, because it was addressed to someone else - they spelt the customer's name wrong. Here it is ... 

Given all of this, would you buy a Porsche? 

Please tell us via the Comments below - we would like to hear what you think?

If you were Porsche CEO, how would you respond to this?

A quick summary of facts first:

• Porsche 911 2003 model purchased in Australia with only 70,000 kms on odometer - no warranty
• Added 15,000 kms during which time a few repairs required, from replacing the water pump to other smaller issues (eg engine mounts, remote keys, etc). Spent about $5,500 - acceptable and understandable
• Then on 85,000 Kms, engine fails. Intermediate Shaft bearing failure causes catastrophic engine failure. Required either a new engine $44K or an engine rebuild - $20K. This is a known issue. Porsche North America class action settlement agreed to cover all the costs for owners of vehicles (2001 - 2005 models) with this issue.
• A key provision (s54) in Australian Consumer Law 'is a statutory guarantee of acceptable quality enforceable against the suppliers of goods (i.e. retailers, dealerships, etc.), as well as manufacturers.'  The determination is the 'reasonable consumer' test that is whether it is is reasonable to expect an engine to last more than 85K. If not, should a car be sold to a new buyer when it has 70K?

Owner in the above scenario sends Porsche CEO the following letter:

PORSCHESTRAßE
71287 WEISSACH
GERMANY

Dear Mr Matthias Müller,

I would like to share with you a story to show you how powerful your brand is and what a strong impact the team behind Porsche have on the average person. I hope you find this story worth sharing with your chief of engineering and chief brand officer.

EVERY kid has a dream. Mine was to own a Porsche 911 one day. Richie (my good friend in high school) and I spent countless hours in Algebra drawing 911s in our notebooks. Richie’s drawing were always much better than mine. And that’s not all he was better at.

About thirty years later Richie was a seasoned motoring journalist who would get called up by all the big car companies. He would get invited to test drive the latest models in exotic locations. He spent his days travelling to places like Monte Carlo, California and the Australian outback to test drive Lamborghinis, Ferraris, Porsches, Bentleys and other more mainstream cars. Occasionally, over a beer I would get to hear from him what was wrong with the latest Aston Martin.

Meanwhile I had spent those thirty years making a living the more traditional way. Not only were all those cars a distant fantasy, I knew that the cost of one of the wheels on a car like that was more than what I had paid for any of my cars.

I quietly made a wow to one day experience being behind the wheel of my dream car. The dream came true when I visited a good friend in Germany and he knew how I loved Porsches. So he took me to Avis and we drove off in a 911, down the autobahn and around the Rhine. Thank you Mr Ferdinand Porsche – Germany never looked so beautiful.

This was such an experience I decided to write about it so I could share that with Richie. I sent him the link to the blog, but didn’t even get a courtesy response saying he was happy to hear from me.

Little did I realise, the dream car itch had been far from scratched. In fact, I had only aggravated the itch. So I decided a couple of years later to dabble in nice cars that had been depreciated enough for me to afford them but not so much that they would be a burden. I started cautiously. First a used Jag. Richie didn’t even let out a healthy yawn when he heard about that car. Then it was a pretty powerful Lexus sports car. That got a small nod from Richie although I wasn’t sure if he was actually dozing off or approving of the purchase.

The thing with Richie was he could abuse those dream cars as much as he liked and then return it to the dealer who would kiss his hand as he handed over the keys. I, on the other hand, had to kiss the dealer’s hand to get them to agree to a test drive.

After a few years of owning a couple of awesome vehicles I decided it was time to get more than a yawn or a nod from Richie. It was time for the dream car. The benchmark.

Finally there was a Porsche 911 in the garage. Thirty years of dreaming had materialised. No other brand in the world has had that power. Not Ferrari, not Lamborghini , not Aston Martin.

This is where it gets interesting. After buying the 911, I decided to keep it quiet. I didn’t want clients to think I was charging too much and also wanted to avoid all the head shakes and murmurs of ‘mid-life crisis’. Unfortunately the only way to keep a purchase like this quiet is by keeping it hidden in the garage and never letting it out. That wasn’t going to happen given I found myself spending more time in the car than at home.

The response to the ‘mid-life’ crisis comments was prepared. I told people it was my third mid-life crisis and by far it was the best one. My wife’s response was better – she would tell people that at least I still had the same wife.

My neighbour commented on how I appeared to have a smile on my face every time I got home. I agreed and suggested that may be everyone should buy a Porsche to make the world a happier place. He laughed out loud and suggested Porsche run an advertising campaign with the slogan ‘buy a Porsche and create world peace!’

This little purchase was resulting in numerous conversations. Old clients started sending me text messages telling me they heard about the car. They asked me if business was really that good in such a crappy economy. They suggested we catch up for a coffee. They wanted to know what I was up to. I was glad to catch up.

In the one year I owned my 996 (a 2003 model) I actually managed to convince two other people to buy a Porsche. I had to replace a few things, which was completely understandable and acceptable. On one trip into the country, the water pump gave up and started leaking – no problem – fixed. The engine fan failed and had to be fixed. Done. The engine and transmission mounts gave in and had to be replaced. All understandable.

My plan was to upgrade the car to a newer model every 3-4 years. But then, catastrophe. The worst thing you can think of happened.

Oil started gushing out of the engine. I had to get it towed to the mechanic and learnt that the Intermediate Shaft Bearing unit had failed and the bearings had gotten into the engine and done some damage. Reading about this issue on the Internet, it appears to be not as uncommon as one would expect from a car of this cost and quality. Because the car is not new, there was no dealer warranty.

Shattered! My two friends have put their decision to buy on hold until they learn more about the situation. My wife is concerned about having a car with an expensive engine that could give away at any time. Most importantly, a dream of over 30 years has ended in tears.

So I write to you in the hope that you can help me make sense of this situation. I beg of you to not ignore this letter. I still harbor hopes of being a life-time customer. Please help me rebuild the trust in the Porsche brand. Please help me to convince everyone who’s asking me about the car that when you buy a Porsche, you’re in good hands.

Over to you…

PLEASE TELL US HOW YOU WOULD RESPOND TO THIS LETTER IF YOU WERE THE PORSCHE CEO... HERE'S HOW HE RESPONDED...