Cadillac & General Motors: The limitations of needs based selling

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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.

What's Wrong With Marketing

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Perception. Self-Perception. Everyone has a way of convincing themselves they're number one in some way shape or form. But that's not true.

The managers managing brands think they're OK even if they're not number one. They think OK of themselves. They come to work today to do the same thing they did yesterday and what they will do tomorrow.

Avis tried harder for a long long time. Never made it past number two. And rifled through managements faster than you can shake a stick at. So, unable to come up with a better idea (lack of abstract problem-solving skills) the linear thinking problem solvers simply buzzed their We Try Harder into a famous campaign. Famous? Yes. Memorable? Yes. But that never translated into enough rental units moved to become #1. Memorability does not always equal more SUSTAINED sales. Neither does generating impressions, celebrity endorsements by Oprah or Tiger, etc.

Apple is not a brand name that slithers off the tongue. The Ps get in the way. But Avis is even more a brand name that slithers off your tongue. A man, and most travelers were men back in the heyday of car rental advertising ordered a Hertz...it almost sounded like a beer. Shemales rented an Avis. Now, the industry is so dominated by linear thinking cost cutting problem solving managements that it's a heavily price driven loyalty driven category that spends relatively little on advertising.

Well, when someone at one of these companies comes up with something important to say I guess they'll stop "branding" (It's what you do when you don't have anything important to say) and start "differentiating" themselves with a product-based reason-for-being communicated via traditional and electronic advertising.

Hell, General Motors wasted billions on shemalish advertising every year. All those people thought well of themselves and that they were doing the right thing everyday. Now look at 'em. Problem is/was, they design(ed) and build(t) products to rental car fleet standards. So what did that say about the people who bought their sedans on their own? Not much. I can hear what the neighbors are thinking. "Jesus! He/She bought a rental car." Bye bye GM.

WHY BRANDS NO LONGER SWAY US

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So if a brand is something that a rancher puts on his cattle so that other ranchers or rustlers don't steal them why do CPG companies brand their products? So competitors or brand rustlers won't steal them. Yet in many ways products (cattle) in most categories (pastures) are the same - commodities - and like cattle heavily price driven categories at that, ground roast coffees, disposable diapers, edible oils, etc.) So if the rancher (cattle owner) wants to sell more of his cattle (brand) at auction (chain grocery and drug stores for example) what must he or she do? Make a better product? A steer is a steer. Meat on the hoof is meat on the hoof. And a better product would screw up the margins. I believe that legendary UCLA basketball coach John Wooden had it right when he said, "It's what you learn after you know it all that counts." These ranchers (marketers) have been raising cattle (brands) the same way year after year. The feed (gathered and measured data) comes from the same vendors year after year. It seems to me that the only thing that would make a difference would be to create new knowledge - knowledge that has never previously existed to be gathered and measured. After all, most gathered and measured (cattle/brand feed) data comes from consumer survey panelists who answer questions for points and prizes - they don't even get cash anymore. And if it's done online, you can't even look the panelist in the eye to see if he or she is telling the truth (suspect data). That feed could be anything! I believe creating new knowledge, that which is yet to exist to gather and measure would sire an uber brand. (It made Folgers worth $1.6 billion when auctioned to a brand rancher in Orrville, Ohio. Then everyone else could once again rush to converge on the same position (pasture) saying the same things about themselves (branding) their own way. The symbol (brand) might look different, but the meat inside is pretty much the same (commoditization). To continue doing things the same way would be illogical because no matter how much you study the past (entrenched or shifting consumer habits and practices or beliefs) it will never give you everything you need for the present. Does anyone actually believe that closing a thousand stores, recipe dissemination, a few novelty fro-you drinks and user generated input from MyStarbucksIdea.Com is going to turn Starbucks around? No. It's just trimming the fat to get ready for an auction where Starbucks is the cattle and rancher Schultz can cash out. “A leader is one who sees more than others see, who sees farther than others see, and who sees before others do.” That way the auctioneer (Costco) can't tell the rancher (P&G) how to breed the cattle (Tide). It's called differentiation, which today, can only come from new knowledge. Jeez, I think I've been hanging around CPG companies too long. Starting to sound cynical.

Christmas

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Less marketing and branding and more leadership and vision.

Over the past year many have told me there's no time in the quest for consumer ears and eyeballs to pay attention to the quaint now backburner concept of positioning and differentiating a product. "I have the next FaceBook to find!" In this hustle and bussle world I want everyone to take the time when you are frustrated in line, angry or short at another to remember that respect for others is NOT something that you have to do. It is something that you GET to do. Be thankful that you have someone else that you are doing something for - a new opinion or option to consider. It is a better medicine than any pill, beverage or pharmafood or nutriceutical.

At this time of year have the epiphany of realizing that your best present to yourself is to make yourself a better you. Everyone around you will capture the spirit. Why make you a better you? Take this lesson from mentor John Maxwell; take and apply it in your daily, personal and business life. Everyone needs to increase their LAW OF THE LID. This "insight" is my gift to you this year. I live by it.

Increase your "Law of the Lid"
You can find plenty of smart, talented, successful people who are able to take their business only so far because of the limitations of their leadership and vision. Your organization's ability to grow is directly tied to your ability and desire to grow personally in both capacities. That is the Law of the Lid. If you want to reach new level of effectiveness in your job, raise your lid. If you want to grow your company, grow your lid. If you want to increase shareholder value, increase your lid.

Here's a story that demonstrates The Law of the Lid. Is this you?

In 1930, two young brothers named Dick and Maurice moved from New Hampshire to California in search of the American Dream. They had just graduated high school, and they saw few opportunities back home. So they headed straight for Hollywood where they eventually found jobs on a movie studio set. Soon, their entrepreneurial spirit and interest in the entertainment industry prompted them to open a theatre in Glendale, five miles northeast of Hollywood. Despite all of their efforts, the brothers just couldn't make the business profitable. In the four years they ran the theatre, they weren't able to generate enough money to pay $100 a month rent.

The brothers’ desire for success was strong, so they kept looking for better business opportunities. They opened a small drive-in restaurant in Pasadena, just east of Glendale. People in southern California had become very dependent on their cars, and the culture was changing to accommodate that, including its businesses. Drive-in restaurants were a phenomenon that sprang up in the early thirties, and they were becoming very popular. Rather than being invited into a dining room to eat, customers would drive into a parking lot around a small restaurant, place their orders with carhops, and receive their food on trays right in their cars. The food was served on china plates complete with glassware and metal utensils. It was a timely idea in a society that was becoming faster paced and increasingly mobile.

Dick and Maurice's tiny drive-in restaurant was a great success, and in 1940, they decided to move the operation to San Bernardino, a working-class boomtown fifty miles east of LA. They built a larger facility and expanded their menu from hot dogs, fries and shakes to include barbecue beef and pork sandwiches, hamburgers and other items. Their business exploded. Annual sales reached $200,000, and the brothers found themselves splitting $50,000 in profits every year - a sum that put them in the town's financial elite.

In 1948, their intuition told them that times were changing, and they made modifications to their restaurant business. They eliminated the carhops and started serving only walk-up customers. And they also streamlined everything. They reduced their menu and focused on selling hamburgers. They eliminated plates, glassware and metal utensils, switching to paper products instead. They reduced their costs and the prices they charged customers. They also created what they called The Speedy Service System. Their kitchen became like an assembly line, where each person focused on service with speed. Their goal was to fill each customer's order in 30 seconds or less. And they did. By the mid 1950's, annual revenues hit $350,000, and by then, Dick and Maurice split net profits of about $100,000 per year.

Who were these brothers? If you drove to their small restaurant on the corner of Fourteenth and E Streets in San Bernardino, on the front of the small octagonal building hung a neon sign that said simply McDonald's Hamburgers. Dick and Maurice had hit the great American jackpot, and the rest as they say is history, right? Wrong. The McDonald's never went any further because their weak leadership put a lid on their ability to succeed.

It's true the brothers were financially secure. Theirs was one of the most profitable restaurant enterprises in the country. Their genius was in customer service and kitchen organization. Their talent led to the creation of a new system of food and beverage service. In fact, their talent was so widely known in food service circles that people started writing them and visiting from all over the country to learn about their methods. At one point, they received as many as 300 calls and letters in one month.

That led them to the idea of marketing the McDonald's concept. The idea of franchising restaurants wasn't new and to the McDonald brothers it looked like a way to make money without having to open another restaurant themselves. In 1952 they got started, but their effort was a dismal failure. The reason was simple. They lacked the vision and leadership necessary to make it effective. Dick and Maurice were good restaurant owners. They understood how to run a business, make their systems efficient, cut costs and increase profits. They were efficient managers. But they were not leaders. Their thinking patterns clamped a lid down on what they could do and become. At the height of their success, Dick and Maurice found themselves smack against the Law of the Lid.

In 1954, the brothers partnered with a leader named Ray Kroc. Kroc had been running a small company he founded, which sold machines for making milk shakes. He knew about McDonald's. Their restaurant was one of his best customers. And as soon as he visited the store, he had a vision of its potential. In his mind he could see the restaurant going nationwide in hundreds of markets. He soon struck a deal with Dick and Maurice, and in 1955, he formed McDonald's Systems, Inc. (later called the McDonald's Corporation). Kroc immediately bought the rights to a franchise so that he could use it as a model and prototype to sell other franchises. Then he assembled his team to build an organization and make McDonald's a nationwide entity. He recruited and hired the sharpest people, and as his team grew in size and ability, his people developed additional recruits with leadership skill.

At first Kroc sacrificed much. Though in his mid-fifties, he worked long hours, and eliminated many frills at home including his country club membership. During his first eight years he took no salary and personally borrowed money from the bank and against his life insurance to cover the salaries of key people he wanted on the team. His sacrifice and leadership paid off. In 1961, Kroc bought exclusive rights to McDonald's for $2.7 million and proceeded to turn it into an American institution and global entity. The lid in the life and leadership of Ray Kroc was obviously much higher than that of his predecessors.

In the years Dick and Maurice attempted to franchise McDonald's they managed to sell only 15 franchises, only 10 opened restaurants. Their limited leadership and vision were hindrances. For example, their first franchisee, Neil Fox of Phoenix, told the brothers he wanted to call his restaurant McDonald's. Dick’s response was, "What...for? McDonald's means nothing in Phoenix?"

On the other hand, the leadership lid in Ray Kroc's life was sky high. Between 1955 and 1959, Kroc opened 100 restaurants. Four years later, there were 500 McDonald's. Today, the company has opened over 21,000 stores in over 100 countries. Leadership ability - or more specifically the lack of leadership ability - was the lid on the McDonald brothers’ leadership effectiveness.

Why "BRANDING" Goes In One Ear and Out The Other

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John Jantsch posted his "Definition of Branding" on Duct Tape Marketing today - which always gets my blood boiling. No, not that John wrote something, but because today's branding practitioners have so fouled up the art. Here's my take.

In an age where consumer packaged goods have become commodities, top executives wonder where their growth will come from and short-lived CMOs spend more time chasing consumer ears and eyeballs deep into new media forests, I had a President at Procter & Gamble tell me that he thought branding was something you did when you didn't have anything important to say about your product. In my book, a "brand" is just something that someone started that caught on. Then "marketers" contribute to its obesity and kill it. And I have foundthis to be more true than false across the industry over the last 45 years when you consider companies such as Blue Cross and Blue Shield "brand" themselves with slogans such as "Discover The Power of Blue." Gee. I thought that was IBM. How is that "likable, knowable and trustable?" Simple? Yes? Easy to remember? Yes? Unquestionable? Debatable. But the problem with branding today, like advertising, is that it has fallen to the level of the people it targets, which is why it transmits right through us - in one ear and out the other.

So what should you do? Indelibly etch your impression on your consumer with a highly-differentiating and consumer-desired product-based selling dimension. I provide consumers over 10,000 comprehensive datapoints (product dimensions, product potentials, USPs or whatever you want to call them) in homework projects that frequently define breakthrough Special User Effects (tm).

Brand Mapping the Presidential Candidates - Courtesy of John Moore's Excellent "Brand Autopsy" Blog

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Eisenhower and Truman were the first Presidential candidates to use the new mass media of television effectively. The utilization of media has matured to the point that you now need to BE a celebrity to get elected. The difference between Regan and Bush is that Regan could speak well. Most candidates today are not only unable to impress when on stage, they can't think on their feet. As Dale Carnegie said, "If you've lived through it you've earned the right to talk about it." To me, it appears that Bush "slept" through it. When I was a child the word "competent," as a standard, was used to denote "one step above moron." Now things have gotten so watered down that the word "competent" means you're pretty good. "Average" has become so horrible in America that you can practically go to the head of the class just by showing up. No wonder gas prices are so high. The world is scared to death! So you be the judge. Is Bush competent, or average?

To continue, the type of research employed to compare Bush to Kerry here is the type of work that perpetuates the commoditization of knowledge in consumer packaged goods - transforming rapid growth businesses into mature earnings businesses. This is the type of work that commoditizes positioning strategies and consumer perceptions - that bankers at Washington Mutual wear jeans and flannel shirts while those Wells Fargo wear suits. Similarly, that smoked sausage manufacturers at Kahn's/Hillshire Farm wear blue jeans and flannel shirts while competitors at Swift-Eckrich wear (what else) suits! When will marketers and strategists wake up and realize that branding firms such as Landor take them for a ride? Excellent con men one and all! I can forgive the young MBA, they are still learning everything all over again for the very first time. But the politicians are supposed to be our representatives. We are their leaders. And they, and their strategists actually digest this ... stuff! What's worse, they pay for it with our tax dollars.