OK, so GM launches a money-back guarantee for its cars and trucks. A kind of riff on the old “Try it! You’ll like it!” campaign. Except of course, those of us who actually remember the old Alka Seltzer ad (before Kathy Griffin murderized it) will recall that the exhortation to experimentation was ironic. The line—repeated by tens of millions of people ad nauseam—came from the waiter. The waiter, the bad guy of the piece, led the protagonist to try food which later made him want to hug the porcelain god. And that’s the key difference. The Alka ad was selling relief from remorse. The GM ad is selling the customer on the idea that they won’t need relief from buyer’s remorse. The GM ad highlights the possibility of buyer’s remorse, on the second biggest purchase of their customers’ financial lives (after their house). Which makes the nationalized automaker’s buyback campaign as dumb as rocks on toast. The man behind the plan, Maximum Bob Lutz, is completely oblivious to this analysis. In fact . . .
General Motors Co. could extend its offer of a 60-day, money-back guarantee for consumers when the marketing program expires at the end of November, GM Vice Chairman Bob Lutz said today.
“It’s possibly renewable. We’ll see what kind of experience we have,” Lutz said in an interview on CNBC.
Lutz said that GM expects “way under 1 percent,” of consumers who buy new Cadillacs, Chevrolets, GMC or Buick vehicles will return them in the guarantee program.
Now I’m not sure if it’s Lutz or Automotive News [sub] who’ve made a great landing at the wrong airport: judging the program’s success (or lack thereof) based on the lack of returns, rather than increased sales. But point not taken.
Oh wait, Maximum Bob is focused on the bottom line. My bad.
Lutz said GM was pleased with the initial results of the guarantee program.
He said research by GM and outside analysts showed it had increased the pool of consumers who say they would consider buying a GM vehicle even though it had not boosted sales yet.
Limbo, limbo, limbo! How low can you set that bar, Bobby baby? Would you believe . . . lower?
“We never did want to look at this program as immediately driving sales,” Lutz said.
See? Now that’s fucked-up. You create a program using a wrong metric, use the wrong metric to judge it, then suggest that it did well by the correct metric, and then suggest that the right metric is the wrong metric. Automotive News end the piece in a desperate search for perspective, but when you’ve already fallen down the rabbit hole, even ritual appeasement comes hard. So to speak.
GM expects 2009 to end at around 10 million to 10.5 million in total sales with 2010 sales recovering to near 13 million.
In 2008, U.S. total sales were 13.2 million. This year will mark the fourth consecutive one of falling U.S. sales.
Lutz said GM dealers are low on inventory of better-selling vehicles but have “plenty of inventory” of full-sized sports utility vehicles and pickup trucks.
If you look at it from the perspective that it’s getting GM a ton of coverage from the press, bloggers, and armchair analysts then I’d say this article proves it was a success.
mikeolan
By that measure, the Explorer tire debacle was an even greater success for Ford. [Hint: George M. Cohan was wrong.]
Robert,
GM estimates that only 1% will be returned, and that anyway most people will be glaq to accept the $500 to waive the 60-day money back guarantee. We’ll see if they are right this time, they have been wrong for 35 years in a row…
PS all Lutz is doing is what that charlatan Iacocca was doing in the 80s, only Iaccoca’s K cars were 100%, USDA choice POS’s and he did not dare back them with a 60 day return.
I did look at a K-car before bought an econonbox back in 83. It looked big on the outside due to its square styling (cars with corved corners look smaller, it is an optical illusion), but it was thirt-world POS inside, with a… bench which would cut the knees of the taller person if the wife or girlfriend drove it… What a worthless POS!
Robert Farago :
September 27th, 2009 at 1:24 pm
By that measure, the Explorer tire debacle was an even greater success for Ford. [Hint: George M. Cohan was wrong.]
We’re comparing a safety problem that cost lives to a silly marketing gimmick?
Come on, Robert. You’re reaching here.
Did Bob Lutz run over your childhood pet or something?
Man, does this site give him crap…just about every day. I’m not saying he’s faultless or a miracle worker, but Jesus himself couldn’t singlehandedly save the mess that is GM, and Bob Lutz has been a supporter of some of GM’s better (or at least more interesting to the enthusiast) cars of the past several years.
There are many, many idiots, villians, and incompetent assh*les who have hastened GM’s long, painful slide into the garbage bin… the troubles began LONG before Lutz showed up on the scene. I say that AT LEAST he’s willing to try unconventional tactics that GM, in it’s brain-dead inertia, would never consider without his prodding.
If some of these efforts fail, well, they were on a ‘toboggan ride to hell’ anyway, so no big loss as far as I’m concerned.
Can’t see why a money-back guarantee would make consumers less confident about a product.
Retailers that have liberal return policies are very up front about it. They see it as a way to let consumers know they stand behind their merchandise. The ultimate example may be Lands’ End’s “Guaranteed. Period” policy.
Having sufficient confidence in your product that you’re willing to take it back no questions asked has traditionally been considered a strong selling point.
Saturn had a similar policy in place in its early years. And we all know what a great rep they had.
@Robert Farago
I suppose so, but there may be some key differences in judging that metric:
1) It’s a promotion, not a flaw that runs the risk of killing or injuring individuals leaving the company in damage control mode.
2) Nobody has died so far due to the 60 day promotion.
What these articles do is establish legitimacy of the program. The worst thing that could happen is for this program to be swept under the rug by the mainstream press and only picked up when a bunch of people are scammed. Instead you’ve got people asking “Is this for real or is it a scam?”
Now, here’s the whole part you’re missing RF: what marketers call the “lagged” effect. Someone may not respond to this particular promotion, but it if it’s successful, it’s a small feather in GM’s cap. Down the road it may eventually persuade someone to buy a GM car, and it’s starting by Lutz getting up on the TV screen and saying “We’ve improved the quality of our cars.” When people become disgusted with Honda and Toyota’s steep decline in quality in the current generation, what he’s saying will be more relevant. So no, he’s not using the wrong metric at all- he’s actually looking long-term.
@Autosavant: Iacocca did something more expensive and more valuable than a 60 day return. In a world of 12 mo/12000 mi warranties, he brought back 5/50 for the powertrain (and IIRC 5 yr unlimited mileage rust-through protection.)
When the 1980-81 Imperial electronic fuel injection proved to be not ready for prime time, Chrysler is reported to have spent $10K per car to retrofit the car with a carb, which also included fuel pump, fuel tank, computer reprogramming, instrument cluster and a whole bunch of other stuff necessary for the conversion. So, even though the buyers had to put up with quite an inconvenience, Chrysler stood behind the car.
How many people know within 60 days if the car is going to be any good or not? The 60 day refund works if you just don’t like the car, but I figure that most people will know this during the shopping phase. When the car has problems outside of an average warranty, a forgone opportunity to take the car back before you knew about any of the problems is not very helpful.
GM Ad Czar Bob Lutz Misses the Point. Again. Still.
One of those dog bits man kinda headlines don’t ya think?
jpcavanaugh is right–a 60 day refund doesn’t really do much, so it’s a safe bet for GM. I’d actually be surprised if they got even 1% of buyers to turn their cars back in, which is an ad campaign in the making for the future. On the other hand, as a couple of others have suggested, it got GM some apparently positive vibes when it needs them. jp is also correct, IMO, that the famous Iacocca campaign the first time that Chrysler emerged from a near-death experience was fundamentally superior to GM’s. As a matter of fact, though, is it just me, or does this whole thing (“Let the best car win”) sound pretty familiar (“If you can find a better car, buy it”)?
Frankly, the only thing that surprises me is that every other car maker hasn’t offered the 60 days/money back. It’s a very small gamble on the manufacturer’s part.
I hope Lutz says that the 60-day guarantee will continue because GM “agrees that it’s pretty much too good to get rid of”.
Then three days later he can issue a retraction on the Fastlane blog because when he puts on his “marketing hat” he decided it isn’t a good idea after all.
.irony
i mean, common, this is great news!
now everybody gets to try GM vehicles and
experience POS first hand. it can only speed up
GMs mega failure, right?? RIGHT???
i dont get why farago is ßitching?
./irony
Lutz’s primary blindside is his fixation with this bogus “perception gap” nonsense that the GM KoolAid drinkers love so much. He doesn’t understand the problem, so he doesn’t offer a decent solution.
Forget for a second whether or not you believe that GM products are fully competitive or if they aren’t. Whether GM builds the best cars in the world, or they build garbage, or they build something in between, GM’s problem in any case boils down to a lack of trust from the consumer.
The solution is to win that trust back. You don’t win back trust by telling those who don’t trust you that they’re stupid. You don’t win it back by creating limited-time refund programs offered in lieu of a rebate.
How you win it back is with a conspicuous, continuous 110% commitment to a zero defects policy, coupled with a 120% commitment to coddle, comfort and woo the customer in every way possible. It comes down to turning ownership of a GM car into a pleasurable, no hassle experience, so that things go right as often as possible and that problems are fixed quickly and smoothly from the customer’s perspective whenever they do go wrong.
Lutz is too busy aggressively defending GM to remember that GM should be about the customer, not about corporate ego. He is the single worst hire that they could have possibly made at a time like this, and the PTFOA was negligent in not preventing it.
Give me a 10 year 100,000 mile bumper to bumper warranty and I’ll consider a GM product.
All cars are nice while they are new. 60 days is not enough time to determine whether or not a car is a POS.
A car needs to have 5 years without unscheduled maintenance, and still needs to feel relatively solid to be considered a good car.
Unfortunately for GM, every GM product in my family needed multiple major services before that 5 year mark, and the cars felt every bit as old as their service records suggested.
My 5 year old German cars still have good steering feel, tight suspensions, and interiors that don’t buzz and rattle.
GM’s cars don’t feel like that at the 5 year mark, and that’s when buyer’s remorse sets in.
-ted
forget Lutz, watch this week’s AutoLine Detroit with Tom Stephens as featured guest. this guy is impressive, knowledgable, and intelligent. witty too. restored some faith in GM for me.
http://www.AutoLineDetroit.tv
I believe the return rate will be much greater than 1% for the sole reason that those consumers with the guarantee have bought the guarantee for $500. Some (more than 1%) will take the trouble to get their money’s worth at the first sign of discontent.
GM’s message in this deal is: “You can either pay for quality, or take your chances for less”.
Doesn’t the consumer get the same quality vehicle whether they buy the guarantee or not? Of course… so why do they make people pay for it?
Hey GM: Offer the guarantee to everyone, all the time, for free, and then maybe your return rate will be 1% or less.
If I was a dealer, I wouldn’t even offer the deal due to the paperwork nightmare that’s involved in a return.
Lutz is the Glenn Beck of GM. I can picture him tearfully saying “I just love this company so much…”
If the return rate is expected to be less than 1% with no bump in sales, what exactly has been accomplished here?
Actually, the 60-day return guarantee is somewhat of an insult, if you ask me. Just about any car built today will hold up for 60 days…even a GM. As others have said here, put your money where you haven’t for the last three decades…solidly behind your product! Offer a useful, long-term warranty on ALL of your vehicles. Show us, the perception-gapped consumer, that you truly believe in your products, and not just for the first two months of ownership. Does GM continue to think that people are really this gullable and stupid? Oh, wait…this is the “new” GM right?
Buickman :
September 27th, 2009 at 10:12 pm
forget Lutz, watch this week’s AutoLine Detroit with Tom Stephens as featured guest. this guy is impressive, knowledgable, and intelligent. witty too. restored some faith in GM for me.
Are you SRERIOUS???? I watched that entire show (not just the 22 mins on Sunday) and this pathetic Stevens clown looked TERRIBLE, came up with the same lame-ass excuses that Wagoner and his just as bad successor henderson used all the time. He does not even seem to know exactly how that fraud 230 MPG for the stupid Volt was actually DERIVED.
Stevens (stephens) sickened me, as a TAXPAYER, that I shell out more than a million a year fcor this bankrupt welfare queen!
I can’t help but wonder if folks won’t figure that this is a great way to rent a car for 60 days at virtually no cost. If I didn’t already have two perfectly serviceable cars, and actively avoid using them, it would be an alternative for an upcoming driving vacation…
BTW, I disagree with those who think that Mr. Farago is too hard on Lutz. This is a guy who still believes that marketing gimmicks, and not substance, will “save” GM. It is a long, slow crawl back to legitimacy for GM and if they’re going to make it, they will do so by instilling pride in every car they make throughout the corporation. Lutz is an overpaid soft-shoe guy who still believes in quick fixes. Keep skewering him, Robert!
Mr. Lutz may be able to fly a whirlybird, but he’s not so good at listening to the market, or listening, I suspect, period.
So it took GM dealers screaming at the top of their lungs to point out to Mr. Lutz that Ford dealers were eating their lunch with an F-150 sale and that Chevrolet and GMC (not GM for godsake…) should get off their duffs and have a truck sale?
Thank god. Know why? Trucks make money. Cars don’t. GM owes taxpayers billions. Duh.
If Mr. Lutz, who claims that he was vested in an “image building” campaign…….called “May the best car win”….and it was more important for GM right now than retaining a competitive share of the full sized pickup truck market….he needs to step aside.
If Mr. Lutz thinks that comparative ads that put GMC CUVs head to head with “Minis” is “image building”…he needs to Step aside.
If Mr. Lutz thinks that identical ads depicting Buicks and Cadillacs diffentiate the brands…(as good image and brand building advertising does)…..he needs to step aside.
In short, GM marketing has become worse, not better already, under his watch….there is no individual brand strategy, its as if the “take over” healthcare advocates got into Lutz’ head and unduly influenced him….so that GM “socializes” its brand building……..
Its that bad. The only brand Mr. Lutz seems to have differentiated, is Mr. Lutz.
Call it a day Mr. Lutz…and Mr. Henderson….you might want to join him if Bob’s current assignment was your idea……….
sfdennis1:
“But such is the irresistible nature of Truth, that all it asks, and all it wants, is the liberty of appearing”
– Thomas Paine
# Robert Farago :
September 28th, 2009 at 2:02 pm
sfdennis1:
“But such is the irresistible nature of Truth, that all it asks, and all it wants, is the liberty of appearing”
– Thomas Paine
Had to look up quite a bit to get the joke.
Maximum Bob is unquestionably a great Car Guy, but I’m still of the opinion that he should have been allowed to follow Gene Autry and Roy Rogers off into the sunset.
I like what pch101 said.
Maybe slightly off topic but has anyone considered just how cluelessly insulting the whole “may the best car win” ad campaign really is?
They start off with a “survey” where they ask people what they think is the most economical car, the most reliable car, etc.
The obvious intent here is to gather the results (in which GM products will undoubtedly not rank in the top) and then do their “reveal” where they show that: Ta-Daaah! GM products are, in fact, the most economical, most reliable, most whatever (based, of course, on highly questionable “statistics.”)
The obvious intent of the campaign is to validate the notion of the “perception gap” (we really do build great cars but nobody knows it!)
Like the “try it, you’ll like it!” theme, this one, too, is based on an old TV commercial: The “hidden camera” commercial where the customer in the fancy-schmancy restaurant orders coffee, only to be told by the waiter that he is not drinking brewed coffee, but is in fact drinking “Folgers Instant Coffee Crystals” or some such instant brand. The customer smiles and then remarks at how completely he was fooled.
The obvious difference here is that it’s not some nameless schmuck in a restaurant who’s being “punk’d”, it’s YOU, the consumer, the person they hope to goad into buying one of their vehicles.
IOW, it’s basically saying “You’re stupid. Now buy one of our cars.”
I’m not a marketing professional but somehow I don’t think insulting your customers is a winning strategy.
What happened to the edit function?