First Oil, Then Water… Now What?

Up Your Business is an exclusive GEARS Magazine feature in which I share stories, insights, and reflections about real business and life challenges.

In over 20 years as an arbitrator and mediator, I’ve observed that most customer disputes are over unmet expectations or misunderstandings. The BBB reports that warranty disputes significantly outnumber almost all other categories of disputes.

In my last article, I discussed how ATRA’s Golden Rule Warranty was appropriately named because so many of the ATRA Good Guys are committed to running their businesses according to the underlying philosophy of the Golden Rule. It’s a personal statement of moral commitment to honoring others, without expectation of reciprocity.

That simple principle has served as the foundation for ATRA’s ethical standards of conduct since 1954. Additionally, in recent years, you’ve heard that one of the keys to success in today’s business climate is being “customercentric.” But, as you’ll see, sometimes enough is enough. There comes a point when a shop just has to say, “No more.”

The following story is about a shop that reached that breaking point… the point where bending over backward for the customer just wasn’t enough. In this particular case, I didn’t serve as an arbitrator; instead, I was called to help coach the shop owner, who’s one of our ATRA Good Guys.

First the Oil

1. The customer came in with an older high mileage 4X4 pickup truck that was losing transmission fluid. He stated that it had been going on for quite some time, but he hadn’t had the money to fix it. He’d recently received his income tax refund and wanted to take care of it now.
2. The diagnostic procedure revealed no evidence of leaks from the transmission, but the transmission fluid was low and the transfer case was overfilled. The transfer case was leaking from the rear seal.
3. The problem was determined to be a one-way leak between the transmission and transfer case.
4. Additionally, material in the transmission pan showed evidence of internal damage, likely from having been run low on fluid.
5. The shop recommended pulling both units to inspect for leak-related damage in the transmission and the internal condition of the transfer case. They told him that, most likely, the transfer case would only need new seals, but the transmission would probably need to be rebuilt.
6. Looking at the age and general condition of the truck, the shop thought they should prepare the customer for the likelihood that the cost would be over $3000, and possibly as much as $4000, depending on the damage. They asked the customer straight up: “Are you sure you want to put that much money into a truck that’s only worth about $2000?”
7. The customer said that he liked the truck and planned to keep it, and that he felt good about putting that much money into it.
8. Ultimately, the total bill came to almost $3600, because they also found that it needed new mounts, CV-joints, U-joints, and a carrier bearing assembly.
9. The customer authorized the repairs. The shop gave a 12/12 warranty on the transfer case reseal and driveline repairs, and a 24/24 on the transmission rebuild.

Fast Forward Four Months… Now the Water

1. After four months and about 1500 miles, the customer returned complaining that the transmission was leaking and was significantly overfilled.
2. The shop’s diagnosis revealed that the transmission cooler was leaking engine coolant into the transmission, causing the transmission to be overfilled with the all-too-familiar “strawberry milkshake.” The only good news was that there was no ATF in the cooling system.
3. The shop quoted $400 to install a new radiator, or, as a less expensive alternative, $150 to install a by-pass transmission fluid cooler.
4. They advised him that the radiator failure was unrelated to the work they’d performed four months earlier and that the coolant mixing with the transmission fluid had damaged the clutches, bands, and seals in the transmission, necessitating another rebuild. They offered to rebuild the transmission for $1250 (50% of the original price).
5. No surprise, the customer went sideways when the shop advised him that the work they performed four months prior had nothing to do with this new problem. He didn’t buy the shop’s explanation that they had nothing to do with the transmission fluid cooler failure and the related transmission damage.
6. The customer became very angry and threatened to take them to small claims court, notify the BBB, and to blast them with negative reviews on the internet.
7. The shop owner told the customer that he wanted to do what was right. He suggested that they both take a few hours to calm down and to think about a fair solution. The customer agreed.
8. After a quick phone call to his attorney and conversations with a couple trusted friends, the shop owner decided to bite the bullet on the transmission and only charge the customer to install his choice of the new radiator or the by-pass cooler. They convinced him that, even if he won in small claims court, his reputation would be smeared on social media and at the BBB.
9. The customer accepted the offer and agreed to purchase only the by-pass cooler.

30 Days Later… Now What?

Upon returning to his shop after a 3-day weekend, the shop owner was greeted by the customer standing next to his truck, red-faced with anger, and waving a tow bill. The customer angrily shouts, “You guys are either crooks or the most incompetent repair shop ever! Now my truck overheated and the engine is shot! I’m out over $4000 on a $2000 truck that doesn’t even run and it’s all your fault!”

Trying to keep his composure, our ATRA Good Guy replied, “Please calm down and we’ll look into the matter to see what’s going on.” He told the customer to give them a few hours to check things out and he’d call him as soon as he knew what happened.

1. It was readily apparent that the radiator had failed and the engine overheated.
2. To make matters worse, the engine had a blown head gasket, coolant and motor oil had mixed in the engine and cooling system, and engine wouldn’t run. The customer might have been right about the engine being “shot,” but was it the shop’s fault?
3. The shop owner called the customer and advised him that the engine and radiator had indeed overheated and suffered severe, possibly terminal damage.
4. The shop owner said that in any event, the shop had not caused nor contributed to the engine and cooling system failure.
5. As you might guess, the customer again went sideways. In fact, this time he went ballistic. He became furious, used abusive language, and renewed his previous threats. He even threatened personal harm and to torch the shop. This all occurred on the phone, but as a precaution and to get it on record, the shop owner called the local police.
6. This time the shop owner stood his ground and told the customer to get his truck out of the shop and that he was “banned” from returning there.
7. The customer sent a tow truck and never came in or called back. He did file a complaint with the BBB, which included scathing, hateful accusations mixed with some of the facts as he viewed them. In essence, he saw the entire process as a continuum, with the shop being at cause the entire way.
8. He used the fact that the shop had accepted responsibility the first time he came back with the coolant in the transmission fluid, and he was now demanding a full refund for all the work.

At this point, the shop owner was frustrated, upset, and concerned, so he called me for advice.

My Advice

After listening to the shop owner’s story, I asked him for two things:

1. Copies of all repair orders, diagnostic sheets, and written warranties.
2. An explanation of what he thought the customer’s version of the story would be. I asked him to role play with me, with him playing the part of the customer.

In reviewing the paperwork, I found that he had done a good, but not great, job of documenting all the facts. The biggest mistake was related to the second repair: He’d failed to include any form of disclaimer regarding future failures related to the cooling system. There was no mention regarding the risk associated with the customer choosing the by-pass cooler instead of a new radiator.

Finally, his role-play of what he thought the customer’s story would include was full of innuendo and opinion. But he felt that both he and the customer would agree on the bare facts.

About the Author

Thom Tschetter has served our industry for nearly four decades as a management and sales educator. He owned a chain of award-winning transmission centers in Washington State for over 35 years.

He calls on over 30 years of experience as a speaker, writer, business consultant, and certified arbitrator for topics for this feature column.

Thom is always eager to help you improve your business and your life. You can contact him by phone at (480) 773-3131 or e-email to coachthom@gmail.com.