Of all the brands sold in New Zealand, none was rocked in 2015 quite as significantly as Volkswagen after the emissions scandal broke. So, if there’s one person who’s learnt a thing or two about change, it’s the car brand’s general manager Tom Ruddenklau.
On the moment the news broke
"On the Friday night, we had our annual October Fest team event, which is a hilarious evening of fun and games with 300 or 400 people. So we had a wonderful night with the team, and then Saturday night the phone range and it was TVNZ asking what my comment was about the emissions cheating software in Volkswagens.
And I had absolutely no idea what was going on. But by Sunday night I did. And the team kicked into action."
On being in crisis
"Crisis is a very unique opportunity for businesses. And while I wouldn’t wish it on many people, it’s such a unique opportunity to understand what’s important in your business, where you leaders are and how people perform under pressure."
On being disappointed
"It’s okay to be disappointed. When it first broke, I was just gutted by what was going on and I think I said that in one of the interviews. We’ve worked our guts out here and I’m really disappointed. I’m willing to work through it, but I’m really disappointed for customers. As opposed to trying to put some gloss on it and saying that everything’s good and rosy, I said it’s not good and rosy. It’s like a mate cheating on you."
On mistakes made abroad
"I couldn’t blame Germany. I couldn’t say this isn’t my problem. We work for one of the most fascinating brands in the world that has such an amazing product. If you’re willing to take the credit when things go well, you’ve got to be willing to take the beating when shit happens. You can’t absolve responsibility. You’ve just got to front it and deal with it. That was the approach I took from day one, so every media request I would front to the point where I was having a day off with family in Coromandel fishing and TV3 was ringing saying that they wanted to interview me for the news on Sunday. We packed up the family, drove back, was interviewed for two minutes, I had my two-second sound byte and that was done. If I didn’t front it, they just would’ve got comment from somewhere. They would’ve found someone to provide some opinion and it would’ve been ten times the work to reinstate a position."
On what it meant to customers
"Our loyal customers, which are a major tool for giving us advocacy, had for the first time ever, seen this whole brand that they’d stood for being questioned. And what this did was show us how strong the emotional connection was with the brand. It showed us that people own Volkswagens for very emotive reasons. And it became clear that we had to do everything we can to rebuild their trust. And to do that we had to go back to what they loved and cherished about the brand in the start. The risk you run when running a business like Volkswagen is that you start to stray from your core DNA and you start to get a bit more mainstream and you start to get a bit too clever, whereas you have to remain true to the core DNA of your brand. We had to look back at what that DNA was, and we’re very lucky with Volkswagen that’s it’s very defined. Our job now is to bring that to life again. It’s that emotional side that’s really important."
On addressing the team
"I was recently with our technicians and mechanics, and I asked them, ‘What are some of the questions you’re getting around the barbecue about Volkswagen?’ And the reason for this is because customers look in their eyes to judge their confidence about the brand. And if they’re not confident, then it flows into the customers and then the customers go, ‘Well, I’m not sure’. Right at the coalface, the mechanics and technicians are almost responsible for managing the relationship between the customer and the car. They’re almost like the love doctors, mate. So, these mechanics have to be given permission to display confidence. And this is a very un-Kiwi thing. Kiwis are very reserved, and they’ve got to be given permission. So this is what I’ve been doing at the coalface."
On the importance of internal comms
"We’ve got an inside-out strategy on this. Volkswagen Germany delivered us a newspaper article and told us to place it in all our major metros. It basically said, ‘We’re sorry.’ And I said, ‘It’s all very well that you apologise to the public, but what about my team? What about my guys who have worked their blood, sweat and guts out? And you want me to apologise to people who aren’t customers or my team?’ The first step is my team. The next step is my dealers. The next step is my dealers, then it’s our existing customers. Then it’s prospects. And then, if we get to doing something in the paper, that’s fantastic. But that’s the order of priority. It’s not about being derogatory about Germany. They’ve been fantastic and they’ve really been supportive and helpful. But inside-out is vital. Everything is built from the inside out."
On how a scandal can extend across generations
"Our big priority next year is focusing on the customers and retaining customers. Enormous amounts of our sales come from repeat customers. Families for generations buy Volkswagen. We’re not just talking about one customer. We’re talking about whole families that are potentially nervous."
On the silent treatment
"If we were a restaurant, we have effectively served up some pretty terrible food. And what happens with New Zealanders is that the waiter will come and ask you, ‘How is your meal?’ and we’ll go ‘It’s fine, thanks’ and you’ll walk away, but you won’t dine there again. New Zealanders are like that. They don’t complain, but they also don’t dine again … So what would a responsible restaurant owner do? Well, the first thing is that they wouldn’t wait to hear complaints. They’d front up, deal with it and get in contact … You’ve got to show customers the respect of personal contact, and one of the big things I’m learning is that the power of a phonecall or physically sitting with someone is almost the new media. I’ve talked to hundreds and hundreds of customers personally. They’ll email through, and I’ll just pick up the phone. If I don’t demonstrate that our customers are important and that we owe them the respect of personal contact, how can I expect my team to do that?"
On not making excuses
"Another way of looking at this is asking what a good mate would do. And a good mate would front up. He wouldn’t offer excuses. He wouldn’t try to buy back your loyalty. He’d front it. He’d take the beating and he’d understand that his actions over time would mean more than words. And he’d know that it’s going to take time and commitment to rebuild trust."
On putting customers first
"At the moment, we’re under the pump, in the vice and we’ve got a lot of pressure on us, so we’re responding. I’m ringing customers and dealers are bending over backwards, because we have to. Now, for me, the real test will be when the pressure starts to pull back a little bit and the media starts to button down a bit. The real test will be about ensuring that we continue to be proactive, show empathy and go the extra mile not just when it’s important to us when we’re under the spotlight. In six months time, customers need to have the same experience they’re getting at the moment. And the experience they’re getting at the moment is gold-plated. If you return to a restaurant that gave you a bad experience in the past, you’re not going to be looking for the good stuff. You’re going to be saying things like, ‘You think that waiter was a bit rude? I think he was.’ You’re going to look for the negatives. So we’ve got a period of time when we’re going to have to be on our A Game. We’ve got to be brutally disciplined in our approach to make sure we keep contact going not just when we’re under pressure."
On the drop in sales
"There has been a lot of deferring. Customers are sitting and waiting, quite rightly. They’ll sit, wait and see. A brand is defined by a series of promises and whether those promises are kept or not. So there will be some customers figuring out whether we are going to keep the promises that the brand stands for, and some that might take a period of time and for others it might be quite short. So, yes, we have had some impact on sales. I would say that half of that is due to the global PR and the other half is down to our confidence. When I have my whole team absolutely determined that this is going to be a defining chapter and our customers are so important, sales will fly. It doesn’t matter what’s happening with product lifecycles or the competition. You never out-perform your mindset. We have a big job to keep our team focused and confident."
On not dropping prices
"They still want the car and they still love they brand, but they’re just waiting to see if there’s actually a deal. And we’ve got to be very careful about that, because we’ve got to keep our head up … You won’t see us slash and burn our prices in our communications, and that might cost us some volume, but we maintain the integrity of the brand. We need to make sure that customers still feel proud when they’re having a beer around the barbecue over the summer."
On learning from telcos
"One of the customers I spoke to was talking to me about a telecommunications company of which he is a customer. And he said, ‘I’m sick of this company offering all these incentives and deals for people who aren’t customers. I’ve been a loyal customer for ten years. Yet, someone who just walks off the street is going to get a better deal than me?’ It really made me think that the last thing I want to be is a company that spends all its money, energy and effort trying to serve people who aren’t customers. What I want people on the outside to go: ‘Shit, I wish I could be part of that. Crikey, you get looked after.’"
On how to market a brand in crisis
"Brand communications are absolutely vital for re-instating what our brand stands for. We’re investing heavily, and we’ve got a significant focus on our existing customers first. All model launches and all our news, must go to our customers first. An example of this would be that we have a new model coming next year called the Tiguan. It’s going to be very short on supply. And we’ve got to make sure that all our existing customers get the opportunity for that first. We owe it to our customers to give them the very best opportunity, to look after them and to give them our word.
The launch is probably going to be at a very timely juncture. It’s the middle of next year, and one would like to think we’ve moved on from some of the communication around the emission thing."
On keeping things simple
"In terms of the style and tone of our communications, it’s about keeping it simple and sticking to our DNA, because that’s what people know and love. And you’ve got to be careful you don’t try and reinvent yourself. You’ve got to be authentic. Again, what would a good mate do? A good mate wouldn’t try to change. He wouldn’t go and dye his hair, get a new suit and change jobs. A good mate would continue to be authentic, because that’s what you knew and loved about them beforehand."
On thinking long-term
"[European Motor Distributors] have been distributing Volkswagen for over 40 years. It’s a private, family-owned business. We’re not short-term players. We’ve got a very long-term, considered view. Thankfully, the business understands there’ll be a bit of pain in the short term, but we’ve got to do that to be here for the long term. We’re not going to pull the ripcord, just because things get a bit tough."
On fair weather traders
"I spoke to one of the team the other day, and I was reasonably straightforward and said, ‘There’ll be a few of you here that think this feels a bit tough, and if you want me to pull the bus over, so you can get off, then that’s fantastic. The good news is that we’ve got this really cool van called the Multi Van that has electric sliding doors and you don’t have to stop to open them. We can just push the button and you can get off, and I won’t even have to stop the bus.’ You don’t want fair weather traders, and thankfully we’ve had all these people step up and say: ‘We are going to be part of the defining chapter of the brand’."
- This interview originally appeared in the December/January edition of NZ Marketing.