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I can understand why the dealership feels extorted, as media these days tend to be unfathomably rude and fact checking is rather limited.
However...
They're in a customer service industry, where reputation matters and there is a great deal of competition and choice. You fight the undeserved press with every ounce of your being, but you own your mistakes. In this case, based solely on the many things I read, I feel bad for the dealership, and much much worse for Hoop. The dealership was screwed because of one joyriding knucklehead, and their insurance is probably giving them the anal probe. The media are performing a simultaneous anal probe.
Discomfort probably doesn't begin to describe it, and a lot of people's jobs are being affected.
But the fact of the matter is that a customer's car, in their care, was totaled by one of their employees. They can play their Chinese math games when buying and selling. Now is not the time. Make this man whole, and do so in a spectacular fashion.
Had they offered him the keys to a new 2014 ZL1 or a well-equipped Stingray, the story would still have made headlines – here and in the mass media. The free press alone would have offset their costs. Working in mass media and advertising, I can nearly guarantee this. Now, if they want to clean up this mess, it's going to cost well more than dealer price of an car Chevy makes.
Missed opportunity and a solid lesson. If you're in the wrong, sack up and exceed expectations. Works out better that way.
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