Showing posts with label GM. Show all posts
Showing posts with label GM. Show all posts

Thursday, October 01, 2009

Saturn: The Long Good Bye

What do Saturn and the movies "Ghost" and "The Sixth Sense" have in common? The stars (heros: Patrick Swayze, Bruce Willis, Saturn) were dead and didn't know it. Saturn wasn't born a brand with special needs. Saturn was stillborn. Conceived in 1985 to be "A different kind of car. A different kind of car company" Saturn never had a reason-for-being. (Go to CNN article) Former GM CEO Roger Smith (of Michael Moore movie "Roger & Me" fame) wanted to start over with Saturn. Instead he stuck the automaker with another dud. Disagree? Well let's split hairs and remember that no car buyer ever said they wanted "A different kind of car. A different kind of car company." They only said they didn't like "the US auto dealership experience." So GM, in typical fashion jumped to conclusions before they jumped to the facts. When consumers said they didn't like the dealership experience they didn't say they wanted a whole new car company. They said, "fix the dealerships." But that was hard to do because people cling to their ideas more tenaciously than their most prized material possessions. No one wanted to mess with the channel guys who also held sway over each year's advertising - and what do car sales guys know about strategy?!) So, to not piss off their prima donna dealer network GM just decided to start a whole new car company with no strings attached. Fatal mistake. The start of the long good bye.

What's the back story? San Francisco's Stouffer Hotel (the one right below the Mark Hopkins and across from the Fairmont) used to be a class act. It was the hotel that hung Maxfield Parrish's "The Oak" by the elevators. And if you're a creative and don't know Maxfield Parrish you've got a lot to learn. Anyway, the Stouffer is now a Renaissance Hotel and Parish's famous "The Oak" is gone.

But there I was in 1985, gliding past The Oak and entering the elevator with Saturn's agency head Hal Riney. Hal had just won the Saturn account with his touchy feely emotional strategy for the brand. Oh great! Now consumers had an even slipperier slope to cling to. A strategy with nothing they could sink their teeth into. No product-based selling solutions. No special user effects. Just buy us because we're warm and cuddly. A different kind of car (never defined). A different kind of car company (ill defined). Hal had pulled a page from research fueling Washington Mutual's here today and gone tomorrow customer base. "We're the nice guys that wear flannel shirts and blue jeans." We're not those take your money and run American auto dealers. Remember: early Saturn floor sales personnel always wore khaki pants and unbuttoned blue oxford shirts. They never approached you unless you approached them first. Very good on paper. Very trustworthy. Very...

And I was trying to convince Riney and GM that this wasn't going to work. Remember: Saturn, as a division, has never turned a profit for GM. It has always operated in the red and has never been able to pay it's own way. So no wonder other car manufacturers wouldn't want to jump to the brand's rescue and no wonder Penske backed out of the deal. The house never had good bones to begin with. But how did I know this? The same way I knew that Philip Morris would reduce it's dependency on tobacco profit 56% by acquiring Kraft. The same way I knew Saturn would never make it. The same way Buick agency McCann-Erickson used to position and advertise the Buick Regal as "The fine line between sport and sedan." When was the last time you ever overheard the man on the street rub his chin and say aloud, "I want the car that's the fine line between sport and sedan." No one ever asked for it. People don't TALK like that! Advertising minds gone mad. As Hal Riney's pointless work for Saturn. Advertising? Yes. It aired. Success? No. The patient died. No today. At birth.

So how should the campaign have run? What reason for being should have been communicated? Something that provided a product-based reason for being. Something that differentiated the product based on it's attributes rather than the ill-directed hopes of a management whose cognitive bias created errors in judgement that led them astray.

“Today’s disappointing news comes at a time when we’d hoped for a successful launch of the Saturn brand into a new chapter,” G.M.’s chief executive, Fritz Henderson, said in a statement. What a pitty. Had Mr. Henderson stopped to consider the fact that his Division's reason-for-being had never been properly Socially Engineered? No! The company and it's strategic partners (dealers and ad agency) simply shot from the hip and ran with it never realizing that they'd first need to have their intended customers first sit down and match themselves to the brand based on over 500 dimensions of product compatibility that GM and Hal Riney did not possess. That process would have worked much like eHarmony for Saturn and would have done more to ensure the brands success. But GM and Hal Riney were much smarter than that. Instead of doing their homework they tried to wing it. Well, in all fairness, they did do their homework, with me. They just choose not to listen. Cognitive bias. They wanted to hear themselves speak. They didn't want to tell consumers what consumers said they wanted to hear about a new car brand.

They said they wanted products that "didn't look 10 years old before they were new." Good for Saturn but a definite slam to other GM divisions. So how would history be different today had GM played THAT hand and consequently forced the other divisions to shape up? Consumers wanted "To own a car that says smart things about me." Which is the reason why all those Honda Accord and Toyota Camry buyers say they buy Accords and Camrys. A far better tagline than a different kind of car, a different kind of company because it answers/answered the question, "What's in it for me?" That's important when you consider that Honda and Camry sell about a million vehicles a year while it would be a surprise if Saturn on whole ever sold more that 65,000 units a year. By the way, the two product-based advertising/positioning solutions we developed scored off the hook for top two box intent to purchase while Hal Riney's work never tested top two box intent to purchase above just below 12.3 percent probably/definitely would buy.

So there I was in the Stouffer Hotel elevator arguing logic with Hal Riney and GM executives who like Burger King wanted it their way. And look what they got. In closing I'd like to recall some emails I traded with Cultureby author Grant McCracken who reminded me that it's a shame that corporate memories of their histories and what they've learned or not learned are so short. Here's one more vote that GM add the position of Chief Culture Officer (Grant's group on Ning) before it's entirely too late. Because if they don't the words that I'd hear from the real change agents that hired me before they folded their hands at GM will ring true. "No one's going to save GM single handed."

In the end Saturns were too much the same and not enough "smart cars." And when GM found a savior in Marketing Director Mark Hans Richter what did they do? They let him go. Proof again that working to drive scads of traffic to your sites won't necessarily bode sell for your corporate career.  My predicted future again for GM? That GM sell it's brands to Toyota or Honda if they want them. Let Toyota or Honda build and sell the names. Then GM can just end the long good bye.

Tuesday, September 29, 2009

Cadillac & General Motors: The limitations of needs based selling

Charles H. Green's Trust Matters blog is always a good read. And the relevance of his post on the limitations of needs based selling remains fresh two years later when you read it and contrast his views against the efforts of companies in financial crisis attempting to affect turnarounds. My case in point? General Motors.

A company's advertising is its mouthpiece. And no where else will one find greater expression of needs based selling than in a company's advertising. And nowhere else can one find greater evidence that absolutely nothing has changed within a company than in the way they express "our" needs - for this is how they "see" us.

Look at General Motor's advertising for Cadillac's SRX Crossover. It says this "is the Cadillac or crossover vehicles." IS THAT my need? I thought MY NEED, if I currently had one, was to see signs of life from General Motors! Proof that someone was listening! Not "proof" from Ed Whitacre that when he came to GM he "liked what he found." Ed's just not my "needs" barometer.

So once again GM offers evidence that even though someone is home no one is "listening!" Like the scene in The Hunt For Red October where the Soviet Navy is banging away with their sonar so hard they couldn't hear a submarine if it was right under them; GM isn't listening to my needs. As Charles Green says, GM is trying to drive me (like cattle) to my needs.

GM and Cadillac are still my grandfather's brands. Telling me I need "the Cadillac" of crossovers just doesn't cut it. I look at the vehicle and see a design that "looks 10 years old before it was even new." The SRX is not "a product that says smart things about me." And in all of the advanced strategy research I did for GM that GM ignored and continues to ignore, these two needs still rate higher in GM's turnaround efforts than do money back guarantees. Who wants a money back guarantee if I'm not going to consider buying the car anyway!?

Cadillac is not my gold standard. There are just soooo many other luxury crossover and SUV brands that anyone over and under the age of 54 would rather have. So how does Cadillac address this? General Motor's Cadillac Division must Socially Engineer® a reason-for-being - the posuitioning strategy - that proves the brand is once again relevant to me. Social Engineering® is a process that matches consumers via "Culturally Influential Consumer Groups®" to products based on over 500 dimensions of product compatibility GM does not possess. Social Enginnering® is not accomplished using judgement for here we see General Motor's and it's partner's cognitive bias at work: advertising based on errors in judgement brought on by the false positives of old thinking.

Being "The Cadillac of Crossovers" is a claim without substantiation. Like "branding," it's something the lawyers say you can say when you don't have anything to say. As legendary UCLA basketball coach John Wooden says, "It's what you learn after you know it all that counts." So I'd welcome a fresh round of calls from executives at Cadillac and General Motors. Just don't ask me to wait 120 days to be paid like last time. Your needs are not being met by your existing roster of vendors and strategic suppliers. They have not helped you worship at the alter of effective needs based selling.

Wednesday, September 16, 2009

Laura Ries Dishes on GM at Ries Pieces

If you haven't read Laura's posts at Ries' Pieces get a move on! Her current installment on GM, called "GM & The Implication of the Opposite" hits the mark and commenting readers are posting interesting follow ups. Now, my chief strategic problem with GM's promotional money back guarantee is that it doesn't build positive business OR brand perceptions, it tears them down due to one immutable law of marketing, advertising, branding and sales. When one trades on price, your brand equity sinks so low you have to climb up a ladder to get to the bottom. This strategy is installing the "Kill Bits®" in people's minds and perceptions that depress their response to advertising, marketing, branding and sales efforts - a far cry from correctly Socially Engineering® the company and brand's turnaround. We're observing Fall of Rome calibre strategy at GM because they really don't understand their consumer and they are unwilling to listen in the ways required to give them what they want.

Monday, March 30, 2009

Free at last. Free at last. Thank God Almighty. General Motors is free at last.

It's not that General Motors product management ignores new product ideas that have a 97% top two box intent to purchase score among import-minded and domestic car buyers in bread and butter and higher margin luxury segments. It's not that they ignore those ideas even though they were presented with enough lead time to address current market conditions. You knew General Motors is/was really in trouble when letters on the subject sent to CEO Rick Wagoner went totally ignored. When those letters never reached his desk. When those letters were redirected by staff to underlings powerless to do anything about them - and who didn't have a care in the world about addressing company saving information further. But more importantly, you knew Genberal Motors is/was really in trouble when you followed up on those letters and you were told to call back because it takes Rick Wagoner's or any staffer's office five days just to acknowledge receipt of that letter. Way too slow in the information age and marketplace. If it takes five days just to log in a letter, imagine how slowly the organization responds to doing important work - like developing and properly marketing the products people want.

The answer isn't cost-cutting, delaying health benefit and pension plan disbursements or renegotiating union contracts and worker pay. Those are all the solution of linear thinking managements. The answer, rather than ignoring what people want and making what GM wants is to make what people want, not what trend forecasters say will sell. That's how GM and Detroit got stuck with all those SUVs. The problem is the results are , well, just too general. Not creative. Not abstract and interesting. Like one ex-head of GM strategy told me time and time again, "No one was/is going to save General Motors single handedly." Wagoner's ouster verifies that; but does it? He's been with the firm since 1977; steeped in the corporations culture so deeply that he never stood a chance. And that's the problem for other insiders. So if I were President Barak Obama, I'd bring in an outsider like Jim Sinegal who knows how to get things done at the speed of Kirkland as the CEO of Costco. Humble, efficient, a cracker-jack manager and he knows how to sell pallets of product everyday. Just the kind of volume General Motors needs. And you know what? American consumers are predisposed to want to buy cars a new way. We knew that 20 years ago. And GM didn't like the dealers either - always looking for new ways to eliminate those lengthy obligations, Abandon the dealers, streamline the pipeline and let people just order cars the way they shop for any other consumer good. Here's my credit card. Here's my down payment and my permission to automatically deduct each payment over the next 36 month. Kind of gets rid of the people with the bad credit and the whole finance infrastructure. Not needed to make the second most expensive purchase in your life today.

Why not take Saturn and make it the Kirkland brand. That'd be an interesting test! Then of course, there's my other solution for GM. Stop building cars altogether, lease the brand names to Toyota and let Toyota make the products in exchange for a payment on each and every sale to GM. What then to do with GM? Easy! Clean slate. Start over. Invent new product lines and brands. Sound hard? Not at all. At one time American's only had sticky paste and roll-ons as antiperspirants and deodorants. Then we invented a new form; Mennen Speed Stick; the first solid antiperspirant and still the most popular item in the category today. Just takes a little abstract thinking to determine what people want before they know they need it; then give it to them. Plenty of people happy to get paid $48 an hour to build cars since receiving their pink slips from the Japanese auto companies too.

Thursday, January 22, 2009

General Motors Pisses On Consumers Again

As part of the agreement made by Ex-President Bush to give General Motors part of an industry $17 billion bailout The Associate Press reports General Motors has yet to clean house of dunderheads who forget to engage brains before opening mouth.

According to an Associated Press article which sites GM's loss of the number one auto sales position to Toyota GM's Executive Director of global market and industry analysis Mike DiGiovanni downplayed the significance of the drop to number two saying the automaker is focused on profitability rather than sales volume. "I don't think being number one in vehicle sales means all that much at all to the American consumer. I think what matters most to the is consumer is strong brands and strong products..."

Jesus Mike! How do you have strong products and brands if you're not number one? Those are the strong products and brands! This statement is about as intelligent a move as your CEO flying to DC on a private jet asking for a handout. Seriously. It's in the same league. Did your PR department approve this statement before you let fly? Are your advertising agencies reviving an Avis like "We try harder" campaign? Mike, this type of thinking is why GM stock was trading around $3.50 yesterday. Oh, that's right Mike, I forgot. It's OK to say stupid things that influence consumer perception by telling us being a winner isn't important. Or did you never learn that Americans love winners? Your excuse for being stuck on stupid? ...GM is a penny stock company and penny stock companies don't employ the best, the brightest or those with much common sense. That's why they're penny stocks instead of corporate leaders. I won't even have to look today to know GM stock selling even lower.

But this type of gaff reminds me of another GM story years ago when GM hired a Deputy Director of the US Census named Vince Barabba to come in and give the company "a voice of the consumer." Vince met me in his office to explain he believed there was "a market for people who wanted cars that didn't look good." I had to ask Vince to repeat the objective of that new product assignment before I graciously declined to participate. I left. Vince stayed. Vince didn't last long at General Motors and neither did his Chevy Lumina.

If GM was Dorothy in The Wizard of Oz do you think they and CEO Rick Wagner wake up each morning tapping their heels together saying, "It's not about sales. It's not about sales."

Wednesday, July 16, 2008

GM's TurnaWhat

Do you remember that old Hot Tuna rock album You Can Tune A Piano But You Can't Tune A Fish (or was that REO Speedwagon)? Any way - Wagoneer GM CEO Rick Wagoner is up to his same old tricks again slashing jobs and cutting costs in a bid to save GM and keep his "turnawhat" on track. Isn't this what Wagoner does everytime GM's "turnawhat" hits a speedbump? Does he not know that doing the same things the same way and expecting different results is the definition of insanity? Calls to Rick's office went unreturned soliciting the company's need and ability to create new knowledge rather than gather and measure information regarding GM's future new product development efforts. (Hint: unless you come up with bread and butter vehicles like Camrys and Accords GM is going to be SOL. Gone are the days when a Corvette's or Solstice "halo" could save you. And you can also forget the goodwill or excitement of auto shows and good press. That's just stuff you're supposed to do.) Based on latest inquiries we were able to ascertain that it takes GM at least 5 days just to acknowledge receipt of an email or letter to Rick Wagoner. Apparently the earth is slow, but the oxen are patient. I did not invent that line - I stole it from Tom Selick and Bess Armstrong in the movie High Road To China. Well, insider wisdom has it that no one at GM is going to save GM single handedly. How's that for an insider unity statement. When Wagoner turns around to look I'd like to know who he sees following.

Now I've been waiting for GM's turnaround throughout CEO Wagoner's reign, but like the problems facing Starbuck's head Howard Schultz, all I've seen are a lot of "turnawhats". Closing stores, recipe dissemination and throwing a few fro-yo new drinks into the equation will not quite cut the mustard at Starbuck's "turnawhat" either. There's got to be a sale or merger discussion going on in there somewhere - that's what these leaders always do. Just no inventiveness or creativity can be seen galloping to the rescue. (No pun intended with George Gallop or all the other pollsters and information harvesters currently selling data to GM and Starbucks.) Without the ability to create new knowledge to lead the company away from the brink what else are the straight forward linear thinking problem solvers to do? Can I trademark that term (TURNAWHAT) like Pat Riley's "Threepeat?"

Tuesday, July 15, 2008

Bush - Capades

Why is the United States (or General Motors) a country of people who like to run with scissors? Because there is no adult to tell their leaders not to.

I read an article in this morning's Nation/World section of the Orange County Register suggesting that President Bush will blame the Democratic Congress for continued high gas prices if Congress does not approve his bid to open offshore drilling. Why is this wrong? And what's wrong in general today?

Lack of leadership. Just because execs like Bush or Wagoner have the title doesn't mean they are the leaders. Leadership guru John Maxwell calls this "the myth of position". There is no gas or oil shortage. Lack of confidence in President Bush's National/Global leadership is what is fueling rampant oil price speculation. There is no gas/oil shortage (we don't need any new wells) because if we were running out of oil you'd see oil and gas companies diversifying into non-oil and gas businesses. That's what Philip Morris did when tobacco became taboo and they acquired Kraft. That isn't happening.
What's wrong with companies like GM? Simple. It takes 5 days for GM just to acknowledge receipt of a letter to company head Rick Wagoner. Small things like this add up into a behavior pattern that caused one writer yesterday to call GM a "pointless" company. How is a company to reap the benefits of becoming forward-thinking and outward looking if receptionists at companies like GM and Starbucks are not even allowed to identify decision makers when asked? The knowledge conduit gets capped by the operator.

Regarding business intelligence in America. It is as suspect as the no doc/easy doc loans that got the mortgage/credit industry in trouble. Any research that does not cause an executive to make direct eye contact with an end customer should be suspect.

George Bush, Rick Wagoner. They have a lot in common. What is America's stock price right now? That is what fuels speculation and high gas prices - so if you are a Democrat or Nancy Pelosi (and I'm Republican) don't fall when running with these scissors.

Monday, July 02, 2007

Interpublic's Turnaround Effort Suffers Pair of Major Blows

Give a stew assignment to an advertising agency and the agency will extoll stew's features and benefits a hundred different ways (calling them campaignable ideas and USPs - Unique Selling Propositions). Give Calle & Company a stew and you get The Soup You Eat With A Fork. Chunky Soup was stew - positioned as a soup - and that's the difference between agency creativity and Calle & Company's definition of a product's Special User Effects ®.
For 100 years, companies and products have focused attention on features and benefits, the lowest common denominator, turning today's brands into commodities, contributing to clutter and inefficient advertising. Abstract Dimensioning ®, Calle & Company's proven comprehensive, trademarked process for the definition of a product's Special User Effects ® defines far more effective and consumer-desired new product and product positioning directions. The company's proven Consumer-Creative ® methodology exhaustively exposes consumer minds to the existence of over 10,000 Product Potentials ® - instantly stretching minds to expand a product's audience, reach and appeal. This Multi-Dimensional Creativity ® is homework unavailable from market research departments, product design, marketing, or advertising agency gurus and leads to the instant consumer creation of new and highly consumer-desired directions.