VW SouthTowne Sees Soaring Sales During Volkswagen Emissions Crisis

The Volkswagen emissions crisis has added to one of the heaviest years of recalls in the history of automotive retail. Volkswagen dealers across the U.S. and Europe have had plenty to deal with since the emissions recall news broke on September 21. In light of these events, we visited Volkswagen of SouthTowne in South Jordan, Utah – one of the top TDI dealers in the nation – to see how they were able to have a record breaking sales month in October immediately following the recall announcement.

We sat down with VW of SouthTowne’s general manager, Josh Osborne, and their e-commerce director, Bryan Armstrong to find out how they implemented clear messaging to their customers regarding the recall and leveraged it as an opportunity to sell more cars. First and foremost, VW SouthTowne recognized there was a problem that needed to be addressed.

Osborne explained, “There was a lot of unsurety about the brand, a lot of people unsure about whether or not they wanted to stick. Before Volkswagen stated whether or not they were going to be giving out assistance, cash, whether or not they’d be helping out in any way with the guests, we wanted to get that message out loud and clear and hear it first from VW SouthTowne rather that VW corporate.”

Osborne noted customers were unsure of the brand and as Armstrong explains, dealers are the face of their brand.

Speaking of brands, Armstrong said, “Whenever there’s any type of a cloud that covers a brand name, its not just on the impacted model, it tends to be over the whole brand as a whole and because in most of our customers’ eyes, we are the brand we are the face of the brand, we are VW SouthTowne. So, we wanted to get the message out there that hey regardless of what’s happening in Germany, we here at SouthTowne, we’re a South Jordan dealer. We have a lot of clientele. These are people who have supported us. So we wanted to be able to reach out with benefit and reach out and become their source of information.”

While this VW crisis could spell trouble for VW dealers who are unprepared, Osborne explained that perspective is everything.

“We really did see it as a huge opportunity, not just a black cloud, no pun intended,” Osborne said. “When we first got the news, we knew it was going to be a big deal, we knew that it was going to be detrimental to sales, we knew that it was going to be a struggle. We safely assumed that most dealers were going to panic. Most dealers were going to lose confidence. Most dealers were going to see dark clouds on the horizon and we wanted to approach it completely different.”

Now that VW SouthTowne had strategically identified the issue, they sprung into action. The first stop was marketing.

Speaking about their marketing efforts Osborne explained, “We got with our marketing company immediately. We started to figure some strategies about how we could get ahead of it, rather than be reactive to it. We decided to put out a promotion that not only reached out to our clientele and reached out to our customers basically stating that we’re with you, just because of this (VW Crisis) happening, doesn’t mean we won’t continue to service our guests better than anybody in the region, doesn’t mean we won’t be number one volume and the reason we were there is because of their immense help and their assistance and they’re wonderful customers and we reached out to them.”

In addition to the promotion and marketing meeting, Armstrong said VW SouthTowne carefully crafted a message to their customers

On the subject of details, Armstrong said, “You’ve got to think even down to the detail of how the receptionist is going to answer the phone in a case like this, is she informed about what’s going on and are the lot techs ready, is the rest of the lot, is your used car manager pulling things up. When we got the news on the 17th I believe it was of September, we immediately went to our blog site and we repurposed some of the OEM content that there was a recall pending and then we shared that out though other social media outlets, over onto Twitter and Facebook as well as with an email blast out to our customers, not just on the effected models, but on all models.”

In addition to crafting a no-spin message for their customers, Armstrong went on to explain how his store adjusted inventory pages by substituting VW turbo models in place of recalled diesel vehicles, and showing the similarities in gas mileage, with gas being a cheaper fill-up. VW SouthTowne coupled their reworked inventory pages with a promotion to pay 125 percent of KBB trade-in value for customer’s used vehicles. In certain circumstances, the right combo of discounts and financing lowered vehicle prices almost 40 percent. Osborne also indicated recalls will happen and when they do, dealers have to make their message clear.

“Recalls are going to happen,” Osborne explained. “Stop Sales are going to happen. You generally get the word far in advance of when the actual recall is put in place so just be as proactive as humanly possible. Try to look for opportunity instead of look for the clouds. Look for someway you may be able to capitalize on this rather than just the rainclouds that are gathering on the horizon. Try to be proactive in the sense of what cars could replace this car. If I needed to trade people out of it, if I needed to get a message out to my customers, they would obviously be upset; they’ll obviously lose a little faith in the brand. What message do I want to send to them and how quickly can I get it out to them and I think that’s what critical.”

Armstrong echoed Osborne’s sentiments noting the importance of being the message bearer in uncertain times, such as the VW crisis.

Armstrong noted, “If you’re not providing the information that your customers, your guests, your clientele needs, then somebody will and I want to ensure that they got it spin free, that we communicated very openly and that we said hey this is all we know, however we are going to keep you apprised.”

Armstrong also noted the dealership staff was asked to step up to the plate.

“We stepped up with some spiffs and some other programs and then we asked them to do a lot of work to reach out and communicate with a lot of customers and they rose to the occasion,” Armstrong said.

Armstrong feels that transparency in this type of situation is critical.

Armstrong said, “You can be transparent and set up that level of expectation of what’s going to happen and you can communicate with value so you alleviate fear.”

With all of the work that VW SouthTowne put into their customers amid the VW diesel emissions crisis, you may wonder what results they saw in terms of new and used vehicle sales.

Armstrong explained, “It’s been our best month. It’s been our absolute best month in new and probably will be one of our better months overall in both new and used.”

“We’re hovering in the mid-hundreds to low hundreds,” Osborne said. “We have a good shot with today’s business and tomorrow’s business of exceeding or hitting two hundred (units in October).”

Finally, Osborne explained, “we’ve not only had our best new car month of the year but our best total volume month of the year amid a scandal, amid a recall amid all the challenges we faced.”

Clearly the staff at Volkswagen SouthTowne showed an expertise in identifying a problem, relabeling that problem as an opportunity, crafting a strategy and jumping into action. What part of the VW SouthTowne approach to the Volkswagen crisis stood out to you the most? How do you handle recalls and stop sale orders at your store?