Here you go.....I actually saved this......you'll find each of Buickman's "steps" followed by MHOs of his "steps." I may be no Evok, but at least this gives you something to ponder.....(sorry for the looooong post)
This whole plan seems to be a Michigan-centric proposal that does next to nothing to really address the major challenges that GM faces….those challenges being over-capacity, excessive costs, lackluster product, and in many cases, a severly-ineffective dealer body. Not much of this plan seems relevant in the “real world” outside of Michigan or the Midwest, nor does it address the challenge of selling, marketing, and promoting GM vehicles to conquest buyers. GM’s problems are far larger than depicted in these twenty points.
A RETURN TO GREATNESS
Step One: When "The Return" is initially announced, we proclaim the
elimination of Destination Charges. If you want to pay freight, get a
foreign car.
· First of all, GM needs revenue……and the destination charges are something that’s acceptable industry-wide. There is no reason to get rid of these charges as long as they are in line with other manufacturer’s charges. To do so will reduce one source of revenue for General Motors.
Step Two: Ten days after the original announcement we release the next step,
the elimination of mid-year price increases.
· Customers neither care or probably realize that mid-year price increases actually take place. GM needs to build value in their products and if you build products that people actually want to buy, then occasional mid-year price adjustments won’t be a factor in GM’s success.
Step Three: Announcement of simplified quarterly incentive changes. No more
pressure to buy now, hurry before it ends, only to be followed by another
program.
· Simplified incentives are fine. However, you will ALWAYS have the situation where someone buys a car and the next day the incentive changes. This will happen whether the incentive is monthly OR quarterly. The very NATURE of the retail automotive industry, in fact ANY sales-oriented industry, is that there will be pressure to “buy now” as companies attempt to meet or exceed monthly, quarterly, or yearly objectives. Furthermore, customers will ALWAYS worry what the “deal” will be. It is in our very nature to negotiate. We do that on houses, and we do that on cars. This is NOT a GM-only fact of life. Furthermore, even if GM WERE to take this step and reduce the “urgency” of the sale, other auto competitors will NOT….and therefore, their existing sense of “urgency” will give them more powerful momentum.
Step Four: Destination Detroit is move number four. In this announcement we
explain our decision to bring all future award winning dealers and
salespeople to Detroit as their reward for a job well done.
· If you are trying to motivate dealers and salespeople, I’m sorry….but a trip to Detroit is NOT going to do it. Hometown pride is great and admirable but it’s a fact of life that Detroit is NOT a leisure or entertainment destination and trying to convince dealers and salespeople to work harder with “Detroit” as a reward will be fruitless at best. I like the idea about a trip to the proving grounds, but in this case, a trip to the Phoenix Proving Grounds would be much more enticing with all the attractions, spas, resorts, and golfing of the Phoenix/Scottsdale area. The expenses saved from executives NOT traveling for this meeting would be minimal and would not strongly impact GM’s bottom line.
Step Five: Home Deliveries. We announce an effort of working with our
dealers to bring the customer the vehicle of their choice, directly to their
place of employment, or residence.
· With every “docs-out” or “home” delivery you do, you take profit opportunities AWAY from the dealership, primarily in the finance department. Maybe home deliveries would be more popular in Michigan, where so many retail customers ARE GM employees….and for them, buying a car is not as big of a deal. In fact, when most GM employees buy multiple cars in a year, and work in the industry, they don’t “need” to take delivery at the dealership. This is most assuredly not the case in the rest of the country. Additionally, customers STILL need to come TO the dealership to shop and negotiate. And in many areas of the country, “spot” deliveries (where the customer takes the car home THAT day) are commonplace. Having a customer wait for a home delivery only reduces profit potential at the dealership AND gives the customer additional time to “rethink” their decision and back out of the deal. It happens.
Step Six: We announce a very simple and easy to understand incentive...Got
GM Get GM. It is a loyalty incentive that anyone can comprehend. If you
currently own or lease a GM vehicle, you receive $1,000. It is stackable and
compatible with any offering, transferable to family member at same address.
No goofy rebate if you own a non-GM car. Who thought of that one anyway? Why
reward disloyalty, or have to ask customers if they own a competitve
product? Let's only give something to those who already support us.
· A GM loyalty incentive is a good idea. However, you cannot stop offering incentives to owners of competing makes. GM cannot survive on its current owners, employees, and retirees for the purchase of GM cars. GM needs to gain market-share from owners of competing makes and one way to do that is to give them a reason to come into a GM dealership. Unfortunately, at this time, the GM product is NOT enough of a reason to entice these consumers. It may be someday, but not now. Incentives are here to stay and as long as GM remains REASONABLE with their incentives and rebates, that’s not a bad thing.
Step Seven: Annual Model Change.
· Once again, if GM does this, they will be at a severe competitive disadvantage. One of the reasons that vehicle introductions became staggered throughout the year, was to gain the “upper hand” against a competitor that was also bringing out a new and competing model. Back 50 years ago, when competition was much less, the Big Three were a mainstay of the U.S. retail auto industry, and all manufacturers introduced new cars in the fall timeframe, this was a great idea. The very nature of the industry now and the number of competitors makes this an unrealistic practice. GM may decide to wait until the fall to introduce their new models, but their competitors surely will not. The competition will be more successful in pulling consumers into their showrooms to sell them their newest products instead of consumers “waiting” until fall to see what GM has to offer.
Step Eight: Increase Dealer Margin.
· Realistically, any increase in margin will be followed by an increase in price. NOW, if GM products get to a strong enough point of acceptance in the marketplace, this increase in price should not be a big issue. They are NOT at this point of acceptance yet. Asking GM to increase margins without a corresponding increase in price is asking GM to give up revenue they desperately need right now.
Step Nine: Get On The Street. Each month, each salary member of VSSM would
be required to spend one day in a randomly selected dealership service
department, preferably in write up.
· All GM employees, (and employees at any manufacturer for that matter) should spend time working in a dealership to get a true feel for the retail environment. However, I don’t see this as being a big impact to the dealership’s productivity. It’s a good idea, but not a big enough impact to probably be included as one of the points in GM’s “Return To Greatness.”
Step Ten: AARP. This is a fantastic demographic, and another opportunity to
simplify incentives. Make it a year-round program.
· AARP is a good program, and a good targeted marketing incentive. However, like above, the impact is likely to be way too small to add to GM’s “Return To Greatness.” AARP, in the overall scheme of things, is a highly-targeted demographic and a correspondingly small proportion of the car-buying public. This incentive would primarily be aimed at GM retirees or Buick consumers. This incentive would do next-to-nothing towards helping convince shoppers at BMW, Mercedes-Benz, Honda, Toyota, or Lexus stores to come into a GM dealership.
Step Eleven: Brand Merchandise Offerings: Include with each delivery a
coupon for $50 off, or towards, merchandise from an affinity catalog.
· Good idea. You could target the brand merchandise offerings to match the individual GM divisional brand image. HOWEVER, once again, the impact from this promotion would do little to correct GM’s market share slide. GM’s problem today is WAY bigger than this.
Step Twelve: Auto Shows. Instead of the current practice of giving rebates
to certain residents of surrounding counties, let's offer auto show tickets
to those who test drive our products.
· Auto shows cost, $9, $10, $11 to get in. I don’t see this as making any impact. Auto show tickets alone aren’t going to bring new consumers into a GM dealership.
Step Thirteen: At year end, instead of giving our employees a cash award for
profit sharing, reward them with stock, and make them true partners in the
company's success.
· A nice idea, however, this does nothing to help fix the “core” problem at GM….and that’s the competitiveness of their products and the perception of GM products in the marketplace by those consumers that GM NEEDS to attract from the Japanese and European car shoppers.
Step Fourteen: PEP Cars. Quite often, GM executives turn in their factory
demos with the mileage just under the next price discount level. This
practice is both frustrating and annoying. The inconsideration shown to
fellow employees, and retirees, is inexcusable and unacceptable. GM needs to
announce a policy of driving the unit to the next mileage category whenever
the driver is within say 250 miles of the next price break.
· No impact from this point. GM PEP cars are a phenomenon that only merits any importance from people living in Michigan (or surrounding states where people work at GM factories, etc.) where the majority of GM company cars are in service. Furthermore, these PEP cars are usually sold to GM employees and retirees. Complaining about losing out on an additional GM discount, when you are already getting a substantial discount on a PEP car is a needless and petty point to argue when it has nothing to do with GM gaining market-share in places like Los Angeles, Dallas, Atlanta, and New York.
Step Fifteen: Referral Savings Account. Similar to the GM Card (another
crisis), GM announces a program to accumulate a savings of $50 for each
referral who buys or leases a new vehicle.
· At $50 per referral, a consumer would never accumulate enough dollars to make the incentive strong enough to pull him/her into a GM dealership. Once again, maybe GM employees in Michigan might utilize such a program but in the REST of the country, how many people do you really think would refer a significant number of people to buy a GM car, then to actually redeem those dollars at a GM dealership? GM has to get people to CONSIDER their products for purchase FIRST before you can think about those consumers actually referring someone to buy a GM vehicle.
Step Sixteen: Free GM Smart Care Maintenance Agreement to all GM Retirees.
This 36 month 36,000 mile program would offer free recommended maintenance
to all GM retirees.
· Simply MORE “legacy costs” at a time when GM most assuredly does NOT need them. GM retirees are NOT going to save GM so there is little point in spending money in this way to further incentivize them. They are most likely going to continue to buy GM vehicles ANYWAY due to the discounts they receive. GM needs to spend money to improve product and increase market share….NOT foster goodwill with retirees.
Step Seventeen: GM Card. This was one of the best programs GM has ever had.
That was until someone decided to take earnings away, and thereby alienate
thousands of employee cardholders.
· I cannot comment as I am unfamiliar with the GM Card and recent activity that has supposedly made it a less-than-desirable incentive.
Step Eighteen: Sales Guilds. For years GM had brand specific sales guilds.
Now, everything is combined into the GM Mark of Excellence. It's a decent
enough program, but it would be more effective to return to the old days of
Buick Salesmaster and the Chevrolet Legion of Leaders.
· Unlikely to strongly impact GM’s falling market-share. The salespeople need good, competitive product to sell. That’s the first step.
Step Nineteen: Direct Factory Communication: Imagine going to your local
dealer and ordering a new vehicle.
· What percentage of GM vehicle purchases are actually custom-ordered? Not many. Due to this fact, this point has very little impact on GM’s overall challenges.
Step Twenty: Reinstatement of Regional Sales Training Classes. Years ago, GM
offered professional sales development classes at their regional training
centers.
· This point adds serious cost, which GM cannot afford right now. Sales training is ALWAYS beneficial, but most manufacturers these days utilize various computer and internet tools to train salespeople. Additionally, the dealership sales managers should be empowered to make sure their respective sales forces are properly trained. That is one function that the individual GM district sales manager should be responsible for on a local level. Regional sales training centers are an unnecessary expense. If a salesperson is not disciplined enough to utilize the computer, internet, and print materials available to him/her, than they shouldn’t be in the business in the first place.
Please respond with your thoughts, and PROXIES.
I just did!
