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Reputation Management: The Straw Buyer and the Black Benz
Welcome back to Reputation Management! We’re rebooting this series to reveal the underbelly of local automotive retailers—places like car dealers and service shops—with fictional service tales inspired by real customer reviews. How do we make these stories seem like they could really happen? Because of my years of experience with a Fortune 500 automotive retailer as a—you guessed it—reputation manager. —Sajeev
Let’s dig into the world of the straw buyer. These are would-be customers who visit the dealership on behalf of the person ultimately taking the final delivery of the vehicle. They are not co-signers on a loan. Many straw purchases are bought in America only to be re-sold in foreign countries. This is not illegal, but OEMs do not like it when their region-specific sales channels cross paths. Dealerships caught in the straw buyer’s web can experience repercussions for inaction if they are party to such transactions.
It’s all very cloak and dagger. That is, except when a straw buyer lacking the usual discretion plasters across the Internet their failure to seal the deal. What follows is how an expert Reputation Manager would handle things.
***
Something about this online review did not add up. I read this customer’s story about a failed Mercedes-Benz GLS sale with a skeptical eye. Why? Well, I am now in my fifth year with CarCountry, one of the largest automotive retailers in the nation. My job is to address bad reviews and, hopefully, fix them. Turn one star into three, maybe.
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And as the general manager of a CJDR (Chrysler, Jeep, Dodge, Ram) store in East Texas once told me… “If the customer’s lips are moving, they are lying.”
To craft a response on behalf of the dealership, I needed context from my co-workers on the front line. I sent an email to Brent, the general manager of this particular Mercedes-Benz dealer in our network, using a highly canned introductory message via email. (A company as large as CarCountry gets hundreds of customer reviews daily, so streamlining is mandatory.)
Brent wasn’t interested in staring at his computer anymore this afternoon, so he called my cell phone (provided in my signature) to blow off steam. I kept my phone on 24/7 for “my” General Managers. We were a family as far as I was concerned, so Brent was my brother. Here was what he told me:
Sajeev, I worked with this young woman directly. I showed both her and her boyfriend the door, watching them leave the property in their wrinkled clothes and a beat-to-hell Nissan Murano. Check their other reviews, they are blasting every Mercedes store within a two hour radius because they are working for (REDACTED).
(REDACTED) is a known straw buyer by Mercedes-Benz USA, and we knew the woman’s money actually came from him. Buying a G-wagen or a GLS can be a cause for concern, as the commission chargeback from Mercedes also results in serious ramifications for our franchise next year. NO THANKS!
That was not the response I was expecting from Brent. To my knowledge, straw buying had long ago gone the way of the dodo because of Big Data (and thus, databases that talk to each other) making it very difficult. But lo and behold, I went to (REDACTED‘s) website and saw he was openly recruiting anyone with a pulse to help him buy luxury vehicles. And if you sealed the deal with an unsuspecting dealership, it was worth anywhere from $1000 to $3500 to the successful straw buyer.
Not gonna lie, that’s a sweet deal for a day or two’s work. Brent was still on the phone blowing off steam about the whole thing, but I had enough material to craft a reply. I normally inject some levity to the end of these conversations, in the hopes it makes me look like less of a corporate schmuck to the hard-working people on the front lines. This time was no different.
“So Brent, was it a black GLS?”
“Brother! We can’t keep those on the lot.”
“You know you ruined some warlord’s day by denying him that truck, right?”
“Probably. But I’m also not the moron who inadvertently supplies limos to North Korea.”
“That’s a fair point. Anyway, I got what I need to respond to this review, thanks Brent!”
Before we get into my response, let me explain something, dear reader. Yes, I am paid to defend the reputation of car dealerships. But that doesn’t mean I don’t care about the silent majority of people researching car dealerships. Potential good-faith customers need to understand why this seemingly legit review was in reality a liability for a small-town Mercedes-Benz dealership. And for a business to thrive, it needs to stay in business. In this case, that meant staying in mama-Mercedes’ good graces.
Just to confirm my suspicions that this was indeed a straw buy gone bad, I checked elsewhere across the Internet. The same person posted similar reviews on Facebook and Reddit, not to mention trying to pull the same maneuver on two more Mercedes-Benz dealerships owned by CarCountry. So, my keyboard and I sprung into action.
Cutting and pasting a variation of this response eight times was surprisingly rewarding. Even more so when two similarly affected general managers in the CarCountry ecosystem blew up my phone.
“Sajeev, I am going to send you a bad review we got at my store becaus…”
“Mr. Mehta, yesterday my Internet Sales Manager told me that…”
To which I replied, “Lemme guess: You had a straw buyer for either a G-wagen or a GLS. I’ve got you covered. Just don’t forget about me when our bosses ask if my department is taking care of you.”
They never forget. My actions are valued—an expert who can perform a task nobody else wants to do, or can do with the light touch that makes such problems go away, rather than blow up. Like a garbage man with an MBA, taking out the trash. That’s reputation management, for ya.
The Reputation Manager will return…
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Conflict resolution and critical conversations are a big part of my job, and not many people like doing them.
You do a great job of demonstrating what my mentor always told me about responding in critical situations.
“If you’re going into a gunfight, make sure there’s bullets in your gun.” Aka, be armed with the information you need to succeed.
You’re great at what you do sir, and I that was an entertaining read.
You know, in my years of doing this, I never considered the fact that I was doing conflict resolution.
I am glad you enjoyed it, hopefully you like the next installment!
Your content on here and Ethan Gaines as well are consistently my two favorites to enjoy.
That is great to hear, I hope you like the next installment! (I am researching it now)
I’m not sure how I like how the general manager of a store in East Texas views his customers: “If the customer’s lips are moving, they are lying.” More often than anyone, it’s the salesman who will lie to close a deal. The only lie I’ll tell is the lie of omission to keep the salesman on track. I’m not going to go down the path of the four squares or tell you what I want my payment to be, etc. If you ask about a trade-in, you’ll get a vague answer (“It depends on the price I get”), but that’s because I need to keep the salesman focused on the sales price and not use the classic tactic of burying profit in other areas. So if the GM hates that I’ll walk away from a negotiation two hours or one week into it because he wants to tack on some kind of required add-on (alarm systems, undercoating, window etching–there’ve been too many over the years to remember them all), that’s on him, not me.
Oh I have seen both sides lie to each other. This is 100% a two way street.
So…the attitude of dealers is the customer is always wrong? An unusual attitude since most folks rank car dealers right up there with members of Congress. I had an experience a number of years ago when trying to purchase a Certified used Mercedes 4-Matic wagon in a specific color combination from a Rhode Island dealership. When I made my inquiry and expressed a strong interest from my Pennsylvania home, I was informed that the price advertised online was incorrectly low. It was only when I threatened to report the issue to the BBB that they honored the advertised price. I realize that I was not a straw buyer but why should the dealer care where or to whom the car is going as long as they are paid?
Because if the manufacturer finds out your dealership caters to straw buyers, you could find yourself without a franchise.
EDIT: or a highly unprofitable franchise because the manufacturer decides you aren’t worthy of getting the correct allocation of vehicles in the coming years.
It is just too bad the entire process is predicated on both the buyer and seller lying from the get-go Always has been, always will be, no matter what is being sold.
The alternative is to buy direct from the manufacturer and hope they don’t enter in a price war with their competition. The moment they discount new inventory is the same moment your vehicle tanks in value, which is much harder to happen when dealerships set the price as individuals across the country.
I’ll tell you some time about the new Pontiac I bought from “Uncle Harry”.
Sajeev, you have enlightened me greatly! A nearby dealership employs a good friend of mine, who complains that the two manufacturers they represent doesn’t give them much inventory. The owner of the store buys all of the vehicles personally (no bank flooring) and has just recently lost his Ford franchise because, the story goes, he wasn’t willing to invest in EV vehicle servicing/charging upgrades. This “auto group” has several locations, and willingly sells vehicles to anyone, anywhere, including online transactions. I think I now know why brand “T” and brand “S” restrict his allotments. Thank you for the information!
Thank you for reading Anthony! I would caution you from coming to that precise conclusion, because there are a million reasons why a manufacturer can dislike a dealer. Straw buying is likely one of the rarer examples, but it certainly makes for a great story.
Having seen some of these canned “I hate so and so company” reviews before I have spring into the defense of some of these places because they were not giving a valid review. This restaurant sucks and I’m never coming back” but then you look further down and you find the real reason was they have some political or some other thing up their rear end that was their reason for giving the place a bad review. It wasn’t the service or the food or anything that should affect your review so negatively. One was seriously because they hears some “religious” music song that played on the system so they gave the place a 1 star review. I often go to restaurants and don’t care for the music played but I have never given a negative review because they played something I think is crap.
If only there was an edit button for the typos. Oh well, no regerts!
I thought North Korea still used old Lincoln Limos
I think they now only have one for funeral duties.
I’m still missing something here. Why does the manufacturer care if a car is sold to a straw buyer, as long as they get their money? A sale is a sale, isn’t it? Are you saying that they don’t want cars sold here to be shipped overseas where they can normally charge a lot more for them? Please elaborate.
PS – a dealership GM implying that all customers are liars is the height of hypocrisy. For one thing, most customers aren’t even good liars anyway. They are amateurs who buy a car once every few years; salesman are professionals who sell cars every day. While they may or may not be outright liars, they are masters at manipulating the customer. To avoid dealer shenanigans, I buy new cars for cash and negotiate for a bottom line, out-the-door price. And I avoid trading in an old car whenever possible since this is where most people get screwed the worst. Not only does this approach result in a fair deal for both sides with a minimum of hassle, it also prevents me from buying (or, God forbid, leasing) cars I can’t afford.
Correct: If a dealer in America takes a deal away from from a dealer in Saudi Arabia, the manufacturer has to clean up that mess. I don’t know for sure, but it seems like competition between dealers in the US makes them cheaper relative to other countries. VINs can explain a lot of things once they roll into a dealership for warranty work, like if a car was sold in America but being fixed in Kenya. In my experience, a dealer that sells to a straw buyer gets a “chargeback” from the manufacturer, essentially negating the profit made from the sale.
Do that too often and the manufacturer will start modifying your allocation of vehicles to correct the bad behavior. Its a problem that solves itself, if the dealership fails to blow off the straw buyer.
So yes, a sale isn’t just a sale.
As someone who works in the field of financial crimes investigation, I can say straw buying is alive and well unfortunately. It was interesting to read about it from the dealers network/associated perspective.
I’ve had the opportunity to be involved in many “new” dealership car-buying experiences. I have to say that I’ve seen lying on both the dealership and customer sides. I was recently helping my Dad negotiate his latest new car purchase from a luxury car dealer here in town.
I was watching a couple come in and immediately demand to see a particular car and barking orders to one of the newbie salespeople who had walked up to offer assistance. He was asking what I thought were pertinent questions, such as:
“What are you driving now? (as they seemed to appear out of nowhere) and “What do you like about that particular vehicle that we have in stock?” they responded with, “That’s NONE of your business. Just show us the **** car we want we are here to buy it now!”
The salesman looked stunned and said, “Well, let me go find the keys.” I could tell the newbie where those keys were. I grabbed them off our salesperson’s desk and pocketed them when I heard what car they wanted to see.
The newbie returns within a few minutes, looking exasperated, and tells the couple, “I’m sorry, but those keys are checked out to someone currently on a test drive.” This, of course, sent the couple into a further rage, saying: “That’s an old trick! You are a liar! Nobody ever actually has keys checked out. You don’t want to sell us a car!”
At about that time, I wandered over, looked at the couple, and said, “He’s being truthful to you and doesn’t have a reason to lie. I have those keys, and we just purchased the car you walked past to get in here.”
The couple didn’t say a word and just about faced and walked out, kept walking to the furthest point across the parking lot, and stood in 20-degree weather with no coat for an incredibly beat-up car to pick them up.
At that point, the General Manager walked over to me. He started apologizing for the situation and told me how he had just gotten a call about the couple from another store and to be aware of them. He came out to intervene when I made my way to them first. I told him it wasn’t his fault he couldn’t help who walked through the door. He said, “If you want to buy the car, we will take good care of you.”
That’s how my Dad got the best “deal” of his 67 years in buying new cars, which he’s still taking about 3 weeks later.