Why your reputation should matter more than a small financial savings

In front of over 58,000 screaming football fans, Purdue student Zachary Spangler lined up his third kick. But he wasn't the Boilermakers' placekicker. He was the contestant in a contest during a break in the game.

Local car dealer Rohrman Honda was sponsoring a challenge during a timeout in the Purdue vs. Indiana State game. Kick the football through the uprights from 20, 30, and 40 yards within the short time limit, and the prize was a two-year free lease on a new car.

Spangler had already connected on the first two kicks; now, a 40-yard field goal would secure his prize. His foot struck the ball, and he watched as it sailed through the uprights. The massive Saturday crowd at Ross-Ade Stadium, home of the Boilermakers, went crazy for the student, and it was announced to all -- including the television audience -- that he was the winner of a new car!

Great story, right? The student performs unbelievably well under pressure, the dealership gets an enormous boost of publicity and goodwill, and all who witnessed the event or learn about it in the next couple of days have a great feeling for everyone involved.

It's too bad that's not where the story ends. According to several published reports, by email on Thursday after the game, Trey Rohrman, director of operations at Bob Rohrman Honda, informed Spangler that he would not receive the car because the football left his foot five-hundredths of a second too late.

It's not too difficult to speculate on what happened here. Rohrman Honda paid a small premium to an insurance company to sponsor the contest. This kind of coverage is typical at everything from "hole-in-one " challenges at charity golf tournaments to half-court shots for big money at NBA games. The local cancer society, for example, doesn't want to risk $10,000 if someone lucks in a golf shot -- but paying a small premium to a specialty insurance company to make such a promotable attraction possible might draw more interest, and therefore revenue, to the tournament. Rohrman Honda likely did exactly that for the promotional value it would receive in front of tens of thousands of fans in their hometown.

The problem is that the insurance company refused to pay up because, they contend, the kick wasn't made in the allotted time. (Football fans will tell you that as long as the ball is hiked to be placed in kicking position by the holder within the time, the kick is good. Unfortunately, we're playing by insurance company rules -- not the rules of the game here.)

However, imagine the uproar over Rohrman Honda taking away the prize from a local student -- especially after the goodwill and publicity they received by presenting him with the award on the field in front of cheering fans!

No matter your business or profession, reputation is everything.

That's not to suggest that we have to be perfect people or organizations. That's impossible -- we will all make mistakes, some bigger than others. I know that I certainly have. However, the key is that when we make an error, we should sincerely apologize, suck it up, and make it right.

What does a two-year lease on a Honda cost the dealership, anyway? Maybe $15,000 —probably much lower for the dealer. What will this disaster cost the dealership in lost reputational capital that leads to a loss in business? I'd bet it is significantly more.

To add insult to injury, Curry Auto Center, Inc. in Bloomington, Indiana—home of Purdue's archrival IU Hoosiers—has contacted Spangler and is offering him a free two-year lease on a new Chevy Blazer to make things right for the young student. That, of course, is now big news in Curry's hometown in their favor and makes Rohrman Honda's decision look even worse in retrospect.

Anything we do in business involves some degree of risk. Rohrman Honda's reputational risk regarding customer care and marketplace distinction was much more significant than the insurance premium or cost of the lease.

We should never be spendthrifts as we lead our respective organizations. However, it's not just "pennywise and pound foolish" here.

This is about our choice between being seen as an average (or below) player in a hypercompetitive market that talks a good game about the customer experience -- or stepping up and creating distinction by living the commitment to customers and community that you espouse.

Which would YOU choose?