I had a chance to present to members of the Luxury Marketing Council of Southern California a few weeks ago, and they challenged my thinking -- and got me thinking -- about how to apply a brand is behavior approach to selling autos coming out of Detroit.
One of the prompts was a simple question: "What could Cadillac to get me to forsake replacing my Acura RL with another one two years from now, and buy domestic instead?" Another participant commented “Will the Chevy Volt be a success, considering both the wait (two years or more), and likely price point of $40,000 or more?”
I had to think about things a bit more before I could formulate a reasonable response. And then it hit me:
There's nothing that the traditional branding and marketing playbook can offer Detroit. If the next round of vehicles are churned through the same communications machine that last year burned through $6 billion, the companies are doomed. There's just not enough time to effect the incremental change in consumer buying habits; remember, the switchover to Asian imports took decades, not years. And that would presume that the marketers could invent marketing that actually worked.
Further, there's just not enough variability in the metal and functions of the vehicles to build a case for differentiation.
More and more, cars are tending to resemble one another, perform like one another, and last about the same amount of time. Sure, there are differences, and some of them are very nuanced, but I don't think that claims of a smooth ride or handy cupholders carry the legitimacy that they once did. Service offers and promotional prices are effectively generic.
Add on top of it all the fact that credit is still tight, and people are feeling financially strapped, so there are some serious externalities affecting Detroit's ability to sell cars, even if people want to buy them. Branding can't overcome these problems.
But I think a radically new business strategy might do it. I think the Detroit automakers should function as if they were mutual funds.
Instead of buying or leasing a hunk of metal, consumers would buy a share or portion of the company; they'd literally "buy into" the idea that these companies matter, and can provide goods and services that other people would want to buy. Actual vehicles and service coverage would "cost" some level(s) of investment in the company; you could buy a portion of a future vehicle, and hope that the value of your investment would increase over time.
More importantly, this set-up would create a number of positive, shared incentives:
- For starters, the value of your shares would go up if other people bought in, so there'd be a real incentive to evangelize for your company
- As a shareholder, you'd take a more serious interest in how the vehicles were manufactured and distributed, which would provide the basis for lots of social media interaction and collaboration (instead of chat about whether or not you like the ads).
- Shareholders would vest more fully over time, providing a growing and powerful incentive to both stay engaged, and be a loyal buyer. Imagine frequent driver points as an added benefit.
I have no idea how it would be structured, or whether it would even work.
But imagine if the U.S. government didn't give the bailout money directly to the automakers, but instead handed Americans checks, and told them to make an investment in one or more of the companies.
Talk about building accountability into the disbursement. And maybe it would be a business strategy that actually had a chance of working?