How to Lose Friends and Alienate Customers: The GM Way

As if General Motors does not have enough to keep itself busy as it has spent the last several years scrambling to remain relevant with consumers, it is facing another negative ding on its image with its handling of some of its On Star customers. The driver assistance service has approximately 500,000 customers that are being affected by the discontinuation of analog service. The change, brought about by government policy, will mean that On Star subscribers who have GM cars manufactured before 2002 (and some cars built between '02 and '05) will have service that does not work come December 31st.

GM's solution? Sell them a digital upgrade kit for $15. It sounds like a small price for consumers to pay, but it would be an even smaller price for GM to pay. While comping subscribers' digital kit fees would cost $7.5 million, it would buy a lot of goodwill... and keep subscription fees coming in. It would be shortsighted to not consider the potential effect on the On Star subscription revenue stream, but this is GM. Link