Thursday, September 24, 2009

Why General Motors still doesn't get it

When I was 6 years old my family moved to Fort Wayne, Indiana and my Dad bought all his cars from Jim Kelly, the local Buick Dealer.

Jim was a friend who my Dad did business with before we came to town. We had Buicks and Opels, (which were imported by Buick 40 years ago). Later when Jim sold the Buick dealership to his son and bought a local Chevy dealer, my Dad stuck with Jim Kelly, not his son.

It was the relationship with the man in charge that kept my family loyal. Laura Ries wrote about this recently:

GM & the Implication of the Opposite


Sometimes the harder you try, the worse off you are. Why is that?

Branding can sometimes be like trying to pick up girls. It is not what you say that counts. But the implication of what you say that counts.

Asking a girl out for a Saturday night date on a Thursday afternoon doesn’t say you like her. It says “I’m desperate. Girls won’t go out with me.”

There’s an important principle here. It’s what we call the implication of the opposite. What you say often implies exactly the opposite idea.

When crafting their advertising messages, too many marketers forget about this principle. As a result, while even if they are telling the truth all they do is convince consumers of the opposite.

Look at General Motor’s new campaign and you’ll see what I mean.

GM’s latest television commercials with Chairman Ed Whitacre Jr. promotes a 60-day money-back guarantee on the purchase on any new car or truck. Only a company that is desperate and unsure of itself would do that. It’s no way to get a date or sell a car.

GM thinks the money-back guarantee says it believes so strongly in its cars that it is willing to give you your money back if you’re not satisfied. But it is the opposite message that gets delivered. We are so unsure of our products we’ll give you your money back.


Money-back guarantees have been around for a long time. And while they are very popular and many companies have used them, I don’t think they are effective. If a money-back guarantee was the key to success, almost every small company in America would be rolling in dough.

Check the yellow pages or Google and you’ll see. Hundreds of companies use them to beg for business.

A money-back guarantee says there is nothing really special or different about your company or your products. The way to be popular and get the girl is not by begging her to try you out and promising to refund her movie money if she isn’t happy with the date.

The way to be popular is by being the best football player, the best tennis player, the best chess player, the best photographer, the best singer, the best dancer or the best looking-guy in the crowd. In other words, by being a leader in a category.

The biggest problem with GM is that they don’t lead in any category. Ford is the leading truck brand. Toyota is the leading car brand. Lexus is the leading luxury car brand. BMW is the leading driving car brand. Mercedes is the leading prestigious car brand.

What is a Cadillac? What is a Chevrolet? What is a Buick? What is a GMC? None of these brands lead in anything nor do they stand for anything.

Cadillac used to be a very strong brand because it was the leading luxury-car brand. But no more. Cheap Cadillac models like the Catera undermined its luxury position in the mind. Cadillac used to outsell Mercedes, BMW and Lexus combined.

Today, Cadillac is stuck in fourth place. Here are the 2008 sales:

Lexus ……..…… 260,087

BMW ………….. 249,113

Mercedes ……. 225,009

Cadillac ……..… 161,159


Then there is Ed Whitacre Jr. Who? Exactly. Nobody knows who this guy is. Sure, he ran AT&T as Chairman and CEO for 17 years. But his Wikipedia page is smaller than mine. Ed Whitacre Jr. is not a household name.

CEO ads that work best are the ones that feature a company founder like Dave Thomas for Wendy’s, John Schnatter for Papa John’s or Frank Perdue for Perdue. Not a CEO who was just appointed by the government.

Apparently, the Ed Whitacre Jr. ads were supposed to resemble the iconic Lee Iacocca ads of the early 1980’s. GM was hoping that Ed do for GM, what Lee did Chrysler. I’ll give you three reasons why this strategy will never work.


1. Lee Iacocca was a celebrity. Ed Whitacre Jr. is a nobody.

Lee Iacocca was very well known before being hired by Chrylser. Iacocca was closely associated with the design and launch of the Mustang. During the Mustang launch at the 1964 World’s Fair, Iacocca appeared on the cover of many magazines including Time and Newsweek. Most people have never heard of Ed Whitacre.


2. Lee Iacocca was a car guy. Ed Whitacre Jr. is a phone guy.

If you want to fix a car company, why would you hire a phone guy? Only the government could think something crazy like that. Iacocca was a car guy all his life. He spent 32 years at Ford and wound up as President before being fired by Henry Ford II. When he arrived at Chrysler, Iacocca brought many good ideas, many good executives and a deep understanding of the industry. Ed Whitacre Jr. bought very little with him when he arrived at GM.


3. Iacocca’s plan was specific. Ed Whitacre Jr’s is not.

What made the Iacocca ads so powerful was not just him saying “If you can find a better car, buy it.” It was the Iacocca talking about the new K-Car. The K-Car was the way for Americans to beat the pump. The K-car was the first 6-passenger, efficient, front-wheel-drive vehicle. And it sold like crazy. Soon after the K-Car, Iacocca followed with the Minivan. And as they say, the rest is history. The success of these two cars turned around the Chrysler Company.

The Ed Whitacre Jr. ads with talk about nothing specific, because GM has nothing specific to talk about. Saying “May the Best Car Win” is laughable. If they really believed they had the best cars, why would they need the buyback guarantee?

If there was a best-car bookie in Vegas, I’d bet it all on Toyota. GM is a suckers bet.

Sphere: Related Content

No comments: