Monday, August 10, 2009

Open letter to GM: think like a technology brand

General Motors grabbed headlines recently by claiming its Chevy Volt plug-in hybrid will get 230 miles per gallon in city driving. Clearly, such an audacious claim must be independently verified. But the sheer game-changing nature of this claim underscores an opportunity for GM to carve out a new place in our collective imagination by behaving more like a technology brand and less like an automotive brand.

Throughout the last century the automobile stood for freedom, mobility and joy. Hitting the open road expanded our horizons and put a bigger world within our reach. Cars represented modern life at its best. But that was then.

Today, it is technology that defines modern life. Technology liberates and connects. Each new smart phone, wafer-thin laptop and lifelike home theater joyfully proclaims that today is better than yesterday.

Technology brands are the new “car.”

I don’t advocate that GM begin behaving in some geeky kind of way. Rather, it should take its cues from brands such as Sony, Apple, Google or GE. These brands deliver a sense of boundless optimism that was best expressed by Microsoft’s old themeline, “Where would you like to go today?”

For those who question the wisdom of focusing on branding strategies given the myriad issues GM faces, I have one simple word: Malibu.

In 2007, GM revamped the Chevy Malibu from top to bottom to compete with the Toyota Camry and Honda Accord, two cars that have ruled the midsize sedan market for years. The result is a $20k car that looks, drives and feels like a luxury sedan.

Consumer Reports recommends the new Malibu. Kelly Blue Book concludes that it looks like a $40k car. JD Power ranks the Kansas City factory that builds Malibu as one of the top three quality plants in the country. It was voted Car of the Year. Nevertheless, more than twice as many people bought a Camry last year. Brand image matters.

Here are some initial steps GM can take to begin behaving like a technology brand.

First and foremost, GM must create modern cars. This isn't just about whiz-bang features or alternative fuel vehicles. Modern cars are best defined by the more relevant relationship they create with their customers. Modern cars are democratic, offering the latest technologies to all, not just in the top of the line models. Modern cars liberate us from old compromises by proving that design and performance can co-exist with safety and environmental responsibility. Modern cars are an extension of the personal technologies that make our lives smarter, better organized and more entertaining. And modern cars look, well, modern.

Second, forge alliances with respected technology brands. After all, brands, like people, are often judged by the company they keep. The success of the Chevy Volt requires that we trust the Chevy brand as a credible source for an electric car. What if GM had partnered with GE on this? (Its name is General Electric, after all.) The company is a manufacturing giant. Its growth strategy is linked to green-tech (“ecomagination”). And it is a household name with a reputation for innovation and dependability.

Third, lift a page from Apple, the tech brand that teaches the master class on marketing. Here are four lessons drawn from the iPhone launch:
  • Design, design, design: The iPhone looks like nothing else. It took no cues from category norms and wasn’t an exercise in incrementalism. Design reigns supreme at Apple. Steve Jobs is manic about design. Jonathan Ive, Apple’s head of design, is a rock star. It’s time to elevate the automotive designers to be the face of the company instead of the suits. Let's see car designers on the cover of Fortune, Wired and People, not the CEO. After all, auto companies are industrial design firms.
  • Limited supply: Here’s a very simple rule: a company shouldn’t produce more product than it can profitably sell. Sounds simple, but seldom happens. Limiting supply negates the need for brand-sucking rebates and tent sales. Apple is genius at this.
  • New distribution model: Sales associates at Apple stores are trained to be living ambassadors of the brand. Consumers may not get this same experience at the average car dealership. So here’s where an auto company needs to swallow a brave pill. Don’t sell the next hot new car through dealerships. Signal change by changing where the car is sold. Establish centrally located shopping galleries – in malls, in airports, in downtown business districts – staffed by the same well-trained ladies and gentlemen hired for car shows. GM’s recently announced plan to begin selling cars on eBay is a smart and timely step. (Dealers must still be reasonably compensated for any sales occurring in their market area since they will play a crucial role in providing ongoing service. Fixing a car is a tad more complex than fixing an iPhone.)
  • Advance buzz: When Apple launched the iPhone it generated a huge amount of curiosity by doing the exact opposite of what auto companies do: Apple said nothing. Auto companies tend to debut the concept car three years in advance at an auto show, create websites offering sneak-peeks, and give car magazines early test drives in return for good coverage. And what happens? The buzz peaks well ahead of the product's retail launch. The new mantra must be to reveal less and intrigue more. (Dealers did this quite well back in the days when they'd cover up new models until launch day to keep curious faces pressed against store windows.)
Apple did all of this and more. Breakthrough product. Inspiring design. Smart pricing. Tight distribution. Clever marketing. Seems so simple. And therein lies the beauty of Apple’s success, and the lesson for General Motors.

Last century, Detroit pioneered mass production to democratize the automobile and bring freedom, mobility and joy to more people. Cars lost this sense of child-like wonder as they grappled with grown-up issues such as safety, fuel economy and global warming. Going forward, GM can be the automotive company that best democratizes technology to solve these challenges and let us to rediscover that sense of wonder on the open road.

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