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This week, Fox News asked me to comment on the challenges facing a bankrupt Chrysler as it attempts to win consumer confidence. [Watch the video] Here are a few things for the company to consider:
Chrysler’s reorganization is intended to proceed in record time, with surgical precision. Maybe so, but to survive as a brand, Chrysler management must now execute the most flawless marketing campaign in the history of the company in order to hold onto skeptical consumers.
First the challenges:
- The buy-American approach, used by Lee Iacocca after the 1979 bailout, won’t work in the current environment, since the company will be controlled by Italian automaker Fiat.
- New cars are probably two years or more away, so the current product line will have to do.
- Many of Chrysler’s customers aren’t happy about the billions in government funds that have gone into shoring up the company.
- The dealer base is demoralized and worried, with no clear direction about the future of the company or their contracts with it.
- The company’s past blunders, from the failed Daimler merger to unsuccessful takeover by private equity speculators have ravaged the management team and led to stale product lines and tarnished brands.
The company should emerge from bankruptcy on firmer financial footing, with favorable union contracts and reduced operating costs, but none of this matters if customers won’t buy the cars. Here is what the company MUST do to survive.
The company must demonstrate that it’s a new day at Chrysler. There can be no doubt in the consumer’s mind that new ideas and energy will guide the company’s future. Telling the public that things have changed will mean nothing given the unfulfilled hype that surrounded past turnaround efforts. Only with a change in corporate behavior demonstrated through tangible actions will the company earn back the attention of consumers.
This change must affect:
- The Dealer Experience
- The Product
- The Advertising
The Dealer Experience
The most important change in behavior will be the hardest to accomplish. The dealer experience must be completely reinvented. With no new product in the lineup the company must rely on dealers as the primary avenue for contact with consumers. That’s too bad, because car dealers are independent companies, so controlling their behavior is difficult in the best of times. Management must convince dealers that providing a reinvented customer experience is the best path to recovery and they must develop clear guidelines for this experience. Customers must leave the dealers ready to talk about the whole new approach they experienced. And while they’re at it, the company should take a cue from Saturn and move to no-haggle pricing. Nobody feels good about playing cat-and-mouse with sales people to guess the price they should pay for their car.
While the product line can’t be reinvented overnight, the company can alter the product in ways that can generate positive feelings among consumers. Chrysler should consider introducing special editions for 2010 that stand out. For example a line of “platinum edition” vehicles could come equipped with a full list of premium features, all for the regular price. The line should feature altered exterior trim to freshen the look. Promotion should focus on how the new editions are Chrysler’s way of thanking the consumer for supporting the company.
Long-term, Chrysler must stop killing its own babies. They’ve shut down consumer favorites like the Jeep Cherokee and Dodge Neon to introduce untested new products like the Caliber and the Nitro. Customers want stable, long-term brands they can trust. The success of cars like the Corolla, introduced in 1968, and the Accord, introduced in 1972, demonstrates the value of consistent improvement to trusted brands. Chrysler has been careless and self-destructive in this arena.
Once freshened products are paired with new pricing and dealer experience, it’s going to be time to tell the story in a new way. This can’t be the same old automobile campaign. It’s time to shake things up and that can happen only when you change the way you do business. Chrysler should break the rules by asking the 10 best creative directors in advertising to spend a few days together brainstorming about how to make the company a poster child for new approaches to consumer engagement — and let the press go along for the ride. Instead of tired executions hammered into submission by uninspired bureaucrats, this approach will yield original thinking and smart solutions.
On a Personal Note
I love to write about troubled brands, but this collapse hits me where it hurts. I grew up in a Chrysler family — there was never a car in the garage that wasn’t a Chrysler. My father worked for the corporation from the time he graduated from law school to the day he retired more than 30 years later. So I care about the future of this American icon and you should too, since we all have a stake in its future.