GM has turned to MTV for advice on how to market to a younger generation of car buyers. I found the article in the New York Times that reported on this rich with irony, yet packed with insights to opportunities for where to go next.
Let’s look at a couple of these.
First of all, this is a matter we’ve got lots of experience with. We’ve been inside of GM headquarters, the GM Design Center, and the GM Image Program (dealerships) programs, providing strategy and design consulting services. In each of these cases, we could not find authenticity. That is, the connection between the people who develop the product, the people who shape its brand presence, and the people targeted as consumers of its products is broken.
The New York Times article finds this disconnect in several levels –
The next generation is not buying cars I commented recently about observations I’d made at a breakfast meeting in Chicago. We sat in a corner window and over the hour that we sat there I saw about a thousand people walk by, none of whom were older than thirty. While I remarked on the youth of the city, a local colleague noted that we were a block away from a transit stop. His point was that it cost a lot to own and use a car in Chicago, and only more mature and rich people drove to the city. What I was seeing was the mass transit demographic. This is a big thing. The world is urbanizing rapidly. Great opportunities lie in global cities. Young people flock to these 25 global cities. A car is a burden in these places.
MTV does not belong in GM headquarters The cultural misfit is enormous, although I am not sure that the suits from MTV are much different from the suits from GM. I once sat in the offices of a GM exec in charge of strategic planning. He swept his arm around the room to designate all of the consultant reports shelved on the walls and remarked of the millions of dollars spent on outside advice that went no further than these shelves. And don’t forget that one of the more prominent current advisers to GM is its 80-year old long time exec, Bob Lutz, famously known for the generationally-aligned statement, “Global warming is bullshit!”
GM headquarters is still the Death Star The MTV Scratch consultant hired by GM refers to GM headquarters as the Death Star. GM, like many corporations, engages architects and interior designers for its workplace through a facility management function. Facility managers are afraid of taking chances, script everything going to execs and, since their success is measured by cost reduction and not more positive metrics, manage for their jobs and not the jobs of the people they provide space for. This makes every floor the same regardless of the type of work that you do, and the latest version of those floors was delivered through a real estate “compression” program. There is nothing here that aligns with a youthful culture, and nothing in this workplace that would attract a new generation of employees.
Nobody in the generation is selling cars to the generation We thought that the best chance for real change at the dealership level was with the electric car. Here was a product that broke cleanly from the past. It was a product that necessarily required a new approach in the delivery of information to the consumer, new behaviors on the part of the consumer, and an entirely new potential on the service side of the business. The targeted demographic must certainly be a different generation, and closing a sale them should certainly call for a retail force with compatible cultural, economic, educational and community values. Instead, electric car sales are stagnant and the dealerships where they are sold have been in a process of renovations ever since the bankruptcy. These dealership updates, called “facility image programs” are now one of the largest contracts for one of the world’s largest architectural firms who are delivering the types of programs that a new study from the National Auto Dealer Association concludes with “our belief that the economic value of these programs remains only weakly demonstrated, our worry that program cost is excessively high, and our concern that such programs may not be best preparing automotive retailers for the future evolution of our industry.”
It all takes much too long and costs much too much, and then what do I do with it? Consider the product cycle of the most popular devices on the market, Apple’s, and compare that to GM’s. Consider the cycle and popularity of the apps that are downloaded over the life of the device to enrich our experiences with it. Consider the transportability of data and experience from one device to the next via updates and the cloud. Now compare that to the depreciation and terminal life cycle of the automobile.
All the values have changed The design culture that generated the nostalgic image that leads this post grew up in a time of geographic expansion and love of the highway. We now live in a time in which the recent economic collapse leaves massive potholes in the economic miracle that built the highways. As roads decay to off-roads and build a huge market for SUVs, the younger generation, driven by both values and value, squeezes into small cars swallowed up by those roads. Who wants to drive on our roads anymore? What romance can be formed, what lyrics could be written, what literature would be inspired by the crumbling infrastructure we now experience?
GM’s best strategic play may be not with MTV but with the oil companies and the government and a sustainability philosophy. Constraining one, stimulating the other, and comprehending the third might bring people back to cars – cars providing authentic experiences designed, built and sold by people who’ve had those experiences.