Monday, October 19, 2009

GM: Keep your foot on the gas

TV screenWhile General Motors’ new “May the Best Car Win” advertising campaign is most likely going to be judged a success or failure based on sales figures, the campaign has many virtues beyond that, if management takes a long-term view.

The centerpiece of the campaign — which made its debut on September 10 — is an offer to buyers of a full refund within 60 days of the purchase of a car. I know of nothing like it previously in the auto industry, so it caught my attention, and no doubt the attention of millions of others (although, during this recession, other car companies offered a variety of deals for people wary of losing their job or facing other hardships).

I see GM’s campaign as phase I in a much longer battle to regain the trust of the American people. A challenge? Yes. A big one. This is a company that had six months or more of non-stop “will-GM-choose-bankruptcy” publicity, and analysts were peeling the onion six million different ways, each one stimulating another story. Even before the bankruptcy speculation, there was a year or more of articles about the misfortunes and decline of GM. It was literally a tsunami of negative stories, banging the idea that “GM is dying” into the heads of consumers. Then, of course, GM chose bankruptcy, and there were literally thousands of articles about that.

Is it therefore any surprise that, as clever as this campaign may be, GM’s September sales plunged 45 percent? In a blog called "Contagious" that I wrote last April, during the “is bankruptcy possible” period, I cited a widely-quoted survey suggesting that that most consumers will not buy a car from a bankrupt company. What’s more, I think most consumers believe a company is dead when it declares bankruptcy. While this true if a company declares Chapter 7, it is not the case if it declares Chapter 11, as GM did. Most consumers don’t understand the difference.

So GM has a mountain to climb, and “May the Best Car Win” is a powerful first step. It features the new chairman, Ed Whitacre, whom the government put in to turn things around. He is a strong, admirable presence, in the tradition of Lee Iacocca, Dave Thomas (Wendy’s) and Frank Perdue. According to an article last month in Ad Age (via Automotive News), a third of consumers surveyed recently believe that having a CEO who is highly visible in the media is an important factor in terms of whether or not they trust the company. There is nothing better than having the CEO put “his money where his mouth is.” Whitacre speaks positively about GM’s products and invites consumers to put them up against anyone else’s. His offer speaks to value, exactly what the consumer is looking for in this environment. And the entire concept around the 60 day refund is an attempt to rebuild credibility with the consumer.

So I say to management, don’t be too hard on yourself if this campaign alone doesn’t result in a huge sales increase. View it as phase I, but have phases II, III, IV and V ready to go in timely fashion. GM can win, if its products are solid and competitive, and if all its other marketing initiatives are as striking as this one.

Technorati Tags: General Motors, May the best car win, Chapter 7, Chapter 11, Lee Iacocca, Ed Whitacre, Dave+Thomas, Frank Perdue

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