Jul
The power to change perception
Bruce MacLellan
Several months ago I had the pleasure of hearing a presentation by Dave Power. You may know him better as JD Power, the founder of the customer satisfaction, service and product rating company. Dave is passing the leadership torch in his firm now, but he has an amazing depth of experience in the business of serving customers.
I asked him how long it takes to turn a negative image into a positive one when a company has taken steps to fix past problems. He frowned and shook his head and then estimated it would take at least two product cycles. His words and his body language told me how hard this would be for a company.
I’ve kept that in mind as I watch the challenges faced by General Motors. Our agency does work with GM so I declare my bias. GM says that change is happening fast, and I don’t doubt that. GM plans to become the industry fuel efficiency leader in each vehicle segment where they compete. They plan a North American vehicle lineup that will include eight hybrids by the end of this year (more than any other company). And the new Chevy Volt electric car is expected to begin North American production in 2010.
On the cost side, their historic healthcare agreement with the union will shave off billions of dollars from the price of building cars. But it doesn’t take effect until 2010. So GM is in a race to win back consumer interest and confidence to gain market share and be able to enjoy lower production costs in two more years. Those two product cycles defined by Dave Power will seem like an eternity to GM management. Innovative ideas about how consumers can experience, test and purchase vehicles might be a way to shorten that time.
Therein lays another problem - the dealership. All of the car companies delegate their consumer interface to entrepreneurs in cities and towns across the nation. The car buying experience is notoriously unpopular with consumers. There are too many dealers also. That oversupply can be confusing and it limits the ability to create better experiences for the consumer. The new image would come into focus much faster if GM could build an automotive green centre in every city, staff it with only people who have scientific training, create one fixed price for each model and invite WWF to also use the space.
The challenges faced by GM, Ford and other businesses in overcoming real or perceived problems are enormous. Dave Power also points out that modern consumers want more, they want it fast and they will move their business without hesitation if necessary. Navigating this attitude is the assigment for those of us who work in marketing and we should all be proud to help these historic brands reassert their reputation for bringing fun and function to consumers. I’m cheering for them.
As someone who has also worked on GM business (there’s my disclosure), I’ll add a thought (or two). A challenge GM must also overcome is to be relevant to young and future car buyers, who will ultimately make or break the company as the population ages and older loyalists die. Notwithstanding the notion some people have that young people automatically rebel and do the opposite of their parents, many teens and young adults grew up (or are growing up) hearing outdated horror stories from their folks about poor quality domestic cars built in the 70s and 80s. “American cars aren’t built well,” their parents say, “you’re better off buying an import.” But what is a domestic and what is an import these days? GM’s new, highly fuel efficient Saturn Astra small car is built in Belgium. And Toyota’s full-size Tundra pickup and giant Sequoia SUV are built in Indiana (yes…Green Toyota makes its fair share of gas guzzlers too). So the domestic vs. import argument is increasingly irrelevant. As for the quality issues, ALL cars are basically made well today — it’s the price of entry. How else can most car companies offer standard 100,000 km warranties? (GM offers 160,000 km, by the way). People who dump on the quality of “American cars” should visit a GM, Ford or Chrysler showroom and get an update. So…back to the question of how GM should become relevant to young car buyers? 1. Blunt the outdated criticism from Boomers and (even Gen X’ers) about poor quality and design — it rubs off eventually on even the most rebellious, adult-hating youths. 2. Be where young people live, work and especially play. On this front, GM deserves kudos for its product placement in movies like Transformers, its annual GM Style cars and stars fashion show (Mary J. Blige, Jay Z, Christian Slater, Jimmy Kimmel and uber surfer Laird Hamilton + cool cars) and rock videos (yes, those really are Chevy’s and Buicks in Gwen Steffani’s latest video), among other smart moves. Next, they need to get more of their products into videogames. 3. Keep going green. While today’s car buyers are finding eco-religion and rewarding greener models (at least while gas is $1.30/litre), future car buyers will expect nothing less. GM’s eight hybrids by the end of 2008 and an electric car by 2010 is good progress on this front.
I too have had the opportunity to work on the GM business and had an interesting phone call with Dear Old Dad last night regarding a new vehicle purchase he’s considering in the near future. This otherwise extremely traditional consumer (think: small town, military man) had made up his mind that import cars were the only option for him when it came down to quality and getting all the bells & whistles he was looking for. He was surprised to learn (from his daughter at that!) that domestic vehicles such as the Chevy Malibu and Saturn Aura have been cleaning up at the big auto shows and getting rave reviews from consumers in head-to-head test with the import competitors. Stylish, fuel-efficient AND good value?! Talk about changing perceptions.
Excellent topic - it’s easier to turn a positive perception into a negative one, than the other way around. GM’s Road to Redemption is going to be a longer journey than most expect. Mr. Power says two product cycles - that’s 8-10 years for the Japanese, and unfortunately, more like 14+ years for the domestics. I suspect it will take a generation. Hyundai is a good example - their early models were unreliable and didn’t stand up to the Canadian environment. For at least 10 years, they’ve focused on improving their quality. Quite some time ago these improvements showed up in JD Power/Consumer Reports studies, but only more recently have brand perceptions start to shift.
Powerful brands are built on the strength of consistency - clearly define what you stand for, and reinforce it consistently through messaging, quality products, and the retail experience. Toyota and Honda have excelled at this for decades, and a quick scan of Power data or Consumer Reports reliability data backs this up. While GM has some exceptionally capable vehicles (trucks, Malibu, Lambda crossovers), and has some that have achieved enviable quality records (Vibe, Buick, and Malibu looks promising), it also has far too many that haven’t. Having too many models and brands to support also dilutes consistency. The lack of consistency creates confusion and concern in the marketplace, and makes it too easy for shoppers to conclude that they’re safer with an import. Since Canadians keep their cars for the long-haul (8 years), this really matters.
I have high hopes for the Chevrolet Volt - the plug-in hybrid. It will never sell in huge numbers, but it GM can pull this off without any major quality/technology disasters, it will help re-establish GM as a leader in innovation and the environment, and may influence a new generation of buyers to consider GM products.