Stream Detroit invited us on their show to talk about our Virtual Voice software. We also riff on co-design, cars and the branded content trend. Let us know what you think.
Stream Detroit invited us on their show to talk about our Virtual Voice software. We also riff on co-design, cars and the branded content trend. Let us know what you think.
What is it that motivates people to stay with their current brand or move on to others? What do carmakers need to do to captivate buyers and keep them loyal over time? The answer is…love. Brands that make love are brands that care enough to keep customers happy by delivering on their needs and wants better than competitors.
In the past few years, research suggest that the gap between the very best and worst quality cars has narrowed. Indeed, the 2014 J.D. Power Initial Quality study indicates that the once huge gap between domestic and foreign brands, as was the case in the 80’s and 90’s, is now comparatively miniscule. What’s more, the margin from the best cars to average and below average has diminished dramatically and it’s pretty hard to find a poor quality car nowadays. But still, some brands are exceeding others by creating rational and even more powerful emotional connections to their brands. Here’s our take on the look of love…
Love is Dependable
Like a relationship, we rarely fall in love with things we don’t trust. As most any buyer study will tell you, quality, reliability, dependability and re-sale are generally the top buyer wants in core volume segments. Not everyone wants a car with super sleek styling and autobahn performance. But nobody tells you they want a car with mediocre reliability. And that’s because cars (and repairs) are big ticket items and nothing’s worse than a bad and costly surprise and the hassle of a car lost for a few days in the service bay. Looks might attract us to a person or a brand at first, but trust is what matters in the long haul. A couple brands today are still suffering from quality perception issues and there are no styling fixes, nor hip advertising, that can make up for the importance of a solid quality reputation. Despite the fact that the quality difference between a Chevrolet and Toyota can be as little as one percent, the perceived gap is often far greater based on brand perception. Trust is the powerful foundation of love. The Honda Accord and Toyota Camry still stand as the textbook examples of the rational and emotional power of getting quality right. And Accord and Camry owners have powered word-of-mouth advocacy over time.
Like a marriage that remains strong after 25 or 50 years, many argue that long term durability (over 3 years) and re-sale, is the best measure of quality and brand strength. And the truth is, most new cars today will perform with good reliability (won’t break down) for over 100,000-150,000 miles. But what separates some brands from others is how that car feels and performs over time. Is it solid and rattle free? Do the seats and stitching look new or rumpled and worn out over the years of wear and tear? Does the paint and plastic still look shiny and deep at 60,000 miles? Is it possible for a car to look and smell new after 70,000 miles? For some brands that invest in long-term durability the answer is yes. That leads to higher satisfaction and higher resale.
Love Is Simple
The findings of recent quality studies show a key trend that when carmakers get too tricky or precious with technology they upset customers and risk loyalty. Complicated navigation and infotainment systems have sent some makers quality rankings from first to worst. What’s more, chasing innovation imagery and the higher margin contributions from complicated technology has created incredible frustration for car owners and lost loyalty for carmakers. For example, the inability for voice recognition to understand simple commands like entering a destination address is a maddening problem. Car journalists have told stories of needing to read a phone book size owners manual to run the navigation and entertainment system on a German luxury brand.Insane. I’ll use the map app on my iPhone thanks. And please, don’t spare the old fashion knobs for heater controls.
Let’s face it, for most folks, styling is still a real big deal. Cars are an extension of who we are. They make a statement about how we want to project an image and how we want others to perceive us. The same can be said about performance and handling. A lot of people like the sense of command, control and fun from a well-sorted car. Cars need to fulfill a rational function, but for most folks the inward emotional and outward social component (how we look to others) are just as important. A good car should invite a look back as you walk away from it. Many cars don’t though. In turn, brands like BMW have nailed the passionate part of car love for years. Look at a 3 series and you see why. The styling is fighter jet clean as are the straightforward instruments in the cockpit. The stance and tire to fender clearance are just tight and right. And when you fire up one of their legendary inline 6 engines it’s like Bono nailing the chorus in the Name of Love anthem. You’re hooked.
Love Is Different
People spend years looking for that one special person in their life. The search for the right car is the same way for some people. Cars that provide that Goldilocks blend of a unique personality and the right stuff are rare and bring fierce loyalty. These characteristics are inherent in cult brands. Like Mini and their owners. To them, no other car hits the sweet spot of iconic syling, social “go-my-own-way statement making” and go-kart-like driving fun. Mini scores high on emotional brand measures and the sales and service experience year after year. Mini is different and their owners love them for it.
Love Is Caring
As the gaps with initial vehicle quality continue to close, expect automakers to put more emphasis on the sales and service experience as points of difference and loyalty retention. Beyond the free maintenance programs we’ve seen from some luxury brands, expect non-luxury brands to make announcements of their own to keep owners happy and in the fold. Re-inventing customer care is an area that is ripe for innovation and fueled by the connected car and consumer.
In the end, good cars, like good people, earn a following because they’re solid, unique and built from love. They care a little more about people and sweat the details to keep their business. And those are the brands we are most likely to come back to.
Brandmachine is in the brand solutions business and going to newer and better places.
Most of us have worked within companies that are very task oriented. Inside these companies, there are meetings upon meetings for the latest product launch or to scrutinize every last minute detail of a new ad campaign.
In this operations-oriented culture, “busy-ness” is most usually viewed as progress, minding the knitting and getting things done. No question these are all necessary things for running brands. But here’s the rub; too often, while companies are rushing to do the right things, or caught in the rut of “rinse and repeat marketing”, they can miss out on delivering for consumers and their brands, or worse, do actual harm to the brand.
Very few companies excel at strategic marketing. By contrast, many brands are more comfortable “being busy” with tasks.
Busy Brands Missing Signals: McDonald’s
McDonald’s is an iconic American brand with superior process and operations. But Ronald McDonald has been taking hits lately. And the punches have been coming fast. Business Insider reports that McDonald’s has chalked up 12 straight months of declining sales in the massive U.S. market, with sales down 4.1% in the latest quarter. And the scarier problem is this: the number of 19-to-21-year-olds visiting McDonald’s once a month has fallen by 13% since 2011, while the number of 22-to-37-year-olds visiting has not grown. No question, McDonald’s greatest strength, and its greatest weakness, is the formula it wrote for the fast food business and its high carb sub-brands like the Big Mac and Egg McMuffin.
McDonalds is all about consistency in quality, service and cleanliness across its franchise network but it either didn’t see the emergence of a changing palette for healthier food, or it was too busy to do anything about it. McDonalds has finally seen the writing on the wall and is now in the process of adjusting menus and service experience to meet customer needs. But what took this once innovative company so long? Sure, burgers and fries are staples for the McDonalds brand, and tastes have changed, but when customers were signaling for healthier choices, McDonalds should have been at the leading edge of that change.
Getting It Right?: Chipotle
A lot of those younger customers that used to frequent McDonalds can now be found at Chipotle. Indeed, the “fast casual” food category has been growing quickly this past decade and Chipotle has been a key driver. The recipe for Chipotle has been identifying a consumer desire for higher quality food with more complex flavors but still served fast. What’s more, Chipotle has burnished a healthier and higher moral ground image using sustainably raised ingredients starting with antibiotic-free pork and chicken and avoiding cattle raised with antibiotics or growth hormones. What’s more, Chipotle has innovated with unique brandcom like the famous Scarecrow video play that tells its brand story and has been viewed by more than 16 million visitors on You Tube. Chipotle is also at work on a strategic plan looking at the next ten year lifecycle for its food and service offerings. By staying relevant to customers, Chipotle has been rewarded with 20% sales increase 2014 vs. 2013, a 31% increase in revenue and a share price increase of 57%. Ay Carumba!
Busy “Branding”: University of Michigan Football
For years, the U of M Wolverines have built a power brand with wins on the gridiron, the “Victors” fight song and the tradition of great coaches like Fielding Yost and Bo Schembechler. But recently, the brand has seriously lost its way. A few years back, the school hired Dave Brandon, a U of M alum and corporate titan from Domino’s Pizza. Brandon saw an opportunity to monetize the heritage of the Michigan brand with a more overt style of corporate marketing. He’s orchestrated skywriting, Super Bowl jet flyovers and even fireworks after games. He also created an oddball donor opportunity for naming rights to the head coaching job and put the quarterback in a number 98 jersey to salute former Michigan player Bruce Harmon. But perhaps the biggest gaffe was jacking up the price of tickets over losing seasons. In sum, Brandon has been running Michigan football like Jerry Jones runs the Dallas Cowboys; a football game wrapped in a carnival act that nobody asked for. And the whole thing just isn’t working. Indeed, as U of M’s record has slid to a humbling .567 winning percentage from 2007-2014, angry students have protested school administration to fire him while nicknaming him “Brandin’ Brandon”, a shot at his marketing sell-out of this once proud and powerful football brand. More than anything, while Brandon sought to move the Michigan brand into the future, he’s left the loyal Michigan fans who identified with its simple traditions behind. All they seem to want is a winning football team, a good fight song from the marching band and an affordable seat. That’s all. Good brands know their customers and when to keep it simple.
Getting It Right: Seattle Seahawks
In 1984, as a salute to the loyal and boisterous Seahawk fans, owner Mike McCormack retired the number 12 jersey to the city to acknowledge their importance as the 12th man on the field. Seattle fans are known as the loudest in the NFL, and were in fact the reason the NFL commissioned a noise rule in 1985. As an extension of the team, and as another salute to Seahawk fans, a 12th man flag was created that can be found throughout the city during football season and is proudly raised in a ceremony each gameday by a season ticketholder. It’s a little hokey maybe but it’s a genuine reward for the fans and now a beloved tradition for the brand.
In branding, as in good design, less is often more. But it’s not easy to see the right balance and emerging trends when everyone is so busy “doing the right things”. Is your brand in sync and connecting with your customer? Is there someone looking at strategy along with today’s tactics? If you aren’t, chances are that someone else will.
Brandmachine is in the brand solution business. And in the business of going to newer and better places.
“Lose Yourself” is the most famous track in the movie 8-Mile. It encapsulates the story of one B-Rabbit as played by Detroiter Marshal Mathers, a.k.a. Eminem. The song is a story about struggle, getting knocked down and overcoming obstacles. It’s about getting “one shot” and making the most of that opportunity and pulling through. 8 Mile was also shot on the streets of Detroit.
Now, that message of opportunity and urgency rings true for the city of Detroit itself as it emerges out of bankruptcy later this month and takes its’ “one shot” to fix what decades have torn apart. Detroit is a damaged brand, but ironically, also incredibly interesting and on the mend with some new energy. Here’s our take on the Detroit brand and the road to a comeback.
Detroit’s story is well known and dates back to the racial tensions of 1967. I was born outside of Detroit. As a kid, I remember helicopters flying over my house loaded with National Guardsmen en route to a smoky downtown to quell the riot trouble. From that summer, the city and the brand that is Detroit went into steep decline.
Over time, Detroit has been branded. Its’ become America’s black eye.
In the 1950’s Detroit had a population of nearly 1.8 million residents and over decades that number has shrunk to 700,000 with a steady stream of urban flight.
Some 80,000 structures sit abandoned in the cities’ 139 square miles. Ruin porn has become a bigger signature for Detroit than its surprisingly lovely skyline. Basic services like streetlights, EMS and police & fire response have deteriorated to unacceptable levels.
But here’s another truth. The Detroit brand is getting better. And Detroit is even…cool.
Detroit is different. And different matters big when it comes to brands. There’s an edge to this place. It’s unabashedly blue collar and real. It’s one of the last places in America that makes stuff with steel and real Americans working with it.
There’s a certain voltage with “Detroit-ness”. And brands have noticed. Chrysler was first to use Detroit’s hard edge with gritty images and the Lose Yourself anthem as its backdrop. The two-minute Superbowl spot featuring Eminem wore the tagline “Imported From Detroit” and has since been downloaded over 16 million times.
Shinola has famously set up shop with both retail and watch manufacturing in the city’s increasingly trendy Midtown District and positioned themselves around “Made In Detroit” and the proposition of a return to American-made craftsmanship. The Detroit brand allure is all about a hip urban edginess and independence.
According to Curt Cheyfitz, CEO of Story Worldwide and a Detroit supporter, “Companies coming to the Motor City for branding are wrapping themselves around a mythology that is outlaw. It is a safe way to be appealing to young people all over the country who embrace those kinds of feelings – of wanting to be outside of the mainstream while actually defining the mainstream.”
But beyond image, Detroit is also attracting newcomers with its unique brand promise.
That promise is opportunity. Nowhere in America is there a place that is trying to re-ignite the American Dream like Detroit. Since the city has bottomed out, investors, led by Quicken Loans Dan Gilbert, have been snapping up commercial and residential properties all over the city. Even Chinese investors are in the act of bidding up dilapidated buildings for renovation into loft apartments and hip office space.
Detroit is a place where cool things are rising from the ashes weekly and reports of investment hit the web with regular occurrence. Where else in America can you pick up an exquisitely-detailed four bedroom house in a historic neighborhood for under $200,000. In Detroit it happens every day. And they’re being snapped up by people that see a rare opportunity. What’s more, downtown Detroit is attracting a new crop of Millenial urban pioneers who want to live in a city with affordable rents and a place where they can be part of something coming alive. Digital start-ups are opening offices downtown. So are advertising agencies and other professional service firms. Trendy restaurants and retail are also coming back to the city.
But brands are as brands do.
And operationally, it looks like a new mayor and city council will fix the dysfunctional governance that has long been a signature of Detroit every bit as much as coney island hot dogs. Mayor Duggan, a former corporate turnaround specialist, has been able to assemble a strong team of A-list talent that looks to have a plan and a system of turning around core agenda items driven by metrics and tight status meetings where stakeholders are held accountable for delivering measurable results for city services; like blight removal, crime reduction and emergency response times. To the cities credit, crime is down 7% from 2012 to 2013. $160 million has been allocated to high tech LED lighting for city streets and over 200 houses are reportedly being torn down every week. It’s also refreshing to see a grassroots focus on Detroit neighborhoods versus the seen-it -before downtown-focused re-gentrification.
Numbers matter. But it will take more than brand metrics to truly turnaround Detroit.
Mayor Duggan has cited population growth as a key metric to judge the city’s turnaround and it makes sense. If the city can attract more residents, it must clearly be improving. But the real barometer for success will be the ability for the city to create a place where young urban pioneers might want to actually stay to raise their kids. So that will mean a radical improvement to a ravaged school system. And it will mean the creation of jobs to fill the void of a couple generations of job loss and welfare existence. And by the way, other cities are trying to attract investment to create those jobs too.
But the journey begins with the first few steps. Beyond a fresh start, Detroit has the opportunity and obligation to rebuild itself after the bankruptcy cleanse. A cool tagline will certainly be trotted out for all this. But the Detroit brand turnaround, more than anything, needs to be an inside job. The city needs to buy in to the turnaround platform and make things happen. And seeing will be believing for those inside and outside the city.
“Look, if you had one shot, or one opportunity…
To seize everything you ever wanted. One moment. Would you capture it or just let it slip?”
The opportunity is now. Stay tuned.
Brandmachine is in the brand solutions business. And in the business of going to newer and better places.
Like many, we watched the reaction from the press, the Street and industry experts as Apple launched the new iPhone 6 and the Apple Watch. Apple has become the go-to standard as a marketing best practice for many reasons. Nobody tries to meet the needs of technology consumers like Apple from product design to retail experience, and few companies have as clear an internal compass, even with the passing of Steve Jobs. While Apple remains one of the most valuable and powerful brands in the world, we think it might be time for more “thinking different”.
So we were looking forward to this announcement day for a while. And we were pulling for that classic “and one more thing” catchphrase moment which did in fact come to pass. To be sure, Apple made some significant news today. The iPhones are great examples of continuous improvement and the highly anticipated Apple Watch definitely brought some oohs and ahhs.
But it’s hard not to feel a bit let down for wanting to see more from this iconic American company. In retrospect, maybe it’s because the world is catching up to Apple while Apple maybe isn’t transforming the world like they used to. Like many recent Apple events, the recent launch was more about evolution than revolution. Is it possible that Apple might be losing a tad of their brand differentiation and therefore a tad bit of relevancy? Is it still the maverick company that has enabled more people to do so much so easily? Here’s a quick look at the Apple brand:
Innovation: From a design perspective, the iPhones and Apple Watch follow the tried and true path of beautifully simplistic Bauhaus-inspired design. But, guess what? Nobody makes a dowdy mobile phone anymore. Just ask Samsung, the world’s most profitable mobile phone maker or other Android brands that have aped Apple’s sleek cases and intuitive UX. And while the Samsung Galaxy 5 has been on a roll, why was Apple so late to market with big screen phones when so many consumers have been clamoring for bigger devices for so long?
And somehow, being sold on the Apple Watch isn’t as easy as it should be. Several mobile companies have already released or announced their own smartwatches, including Sony’s SmartWatch, Motorola’s Moto360 and Samsung’s Gear Live. However, those devices have struggled to catch on with mainstream consumers. Part of the reason for that is a killer app for the category has failed to emerge (although it also hasn’t helped that the world has been waiting to see what Apple would bring to market). Not to be “glass half empty,” but is it possible that smartwatches are an answer to a question not enough people are asking? Is there enough there, there? By contrast, nobody ever raised that question about the revolutionary Mac, iTunes or iPhone.
Pricing & Security: Apple should be a bit concerned about changes in the mobile industry external factors environment. Apple’s pricier phones have been most popular in markets where subsidies have lessened sticker shock, but now those incentives are mostly gone and consumers are looking anew at Apple features and higher prices vis a vis competitors. And, nobody, including Apple, saw the threat hackers could impose on their security infrastructure with the harvesting of nude celebrity photos. Indeed, security experts were shocked at the lack of perimeter security on iCloud. Monitoring social networks this week saw more negative buzz for the Apple brand than positive, the first time this has ever occurred. So far, Apple has weathered this storm but more needs to be done. In this case, maybe Apple needs to “think different” about the more rational and functional “ante” of the category.
Overall, Apple remains a strong and maturing brand that needs to stay hungry while it stays the course. And we have no doubt that its best days can be ahead of it. And it’s still a power brand. Think about this. What other company gets consumers standing in line days in advance of a product launch? And when was the last time you carved time out of your day to see a brand’s new line of wares in a press conference?
But Apple can do better. And perhaps one of its rivals can teach the brand a few lessons.
Google has exhibited the kind of innovation and daring that once were the exclusive hallmarks of Apple. Take for example GoogleX that makes WiFi available globally by putting satellites tied to balloons over the earth. Or, look at the gee whiz factor Google created with Google Glass. As such, it’s no coincidence that Google passed Apple in the 2014 BrandZ Top 100 Most Valuable Global Brands study.
More than anything, Steve Jobs got the concept of Wow. And “thinking different.”
And those are the things that will continue to make Apple one of the world’s great brands.
By: Kevin Smith
Brandmachine is in the brand solution business. And in the business of going to new and better places.
More progressive marketers are realizing that it’s not about what they say or how hard they sell, but more importantly, it’s about what they do inside the company and how they create value exchanges with consumers who in turn create advocacy for the brand.
Today, as ever, the recommendations of influential friends are the most powerful form of communication and that reality is in hyper-drive with social media. And so it’s no wonder that brands and their agency partners are re-evaluating strategies because the new reality is that brands must imbed a better story into the product and service as well as their corporate culture. The days of talking a good game and delivering empty taglines are surely numbered when consumers are one click away from the truth.
In some circles, industry observers are calling this transformation the move to marketing as a service. The new marketing puts the focus on consumers and value exchanges over traditional spin. And today, brand differentiation needs to be achieved through tangible ways that create real customer benefit.
Here are some examples of brands that are getting it right:
Domino’s Pizza: Domino’s research told them they had a problem. Their pizza didn’t taste very good. So Domino’s set out to make better pizza by experimenting with new recipes and better ingredients. When they created that better pizza their TV campaign fessed up and told people they hadn’t made the best pizza but asked for another chance. People tried the better pizza and told others about it. Then Domino’s created an app that allows faster and easier ordering and the ability to tell exactly when their pizza will be done. Now Domino’s is profiting nicely from an improved and differentiated product and service.
IBM: Not long ago, “big blue” stood as the poster child for safe and stuffy corporate America. But in an era of big data, IBM has created a mission and captured it nicely with a brand platform of “creating a smarter planet”. So IBM are solving critically important problems like traffic congestion and crime and using the platform to challenge their people to create ideas that are of service to humanity. Indeed, staffers must even show how their ideas help create a smarter planet when presenting their work. That’s brand glue from the top-to bottom and inside-out. And that’s an interesting IBM that some of the best and brightest want to work for.
Warby Parker: Launched in 2010, Warby Parker has quickly grown into a nice start-up success. Warby challenged the paradigm of high-priced eyeglasses (normal frames/prescriptions sell for less than $100) by designing their own frames in-house and eliminating middle-men. Warby sells direct to consumers by allowing five frames to be sampled at home in a low-pressure environment for five days. Warby also supplies frames to needy individuals at a reduced price for every pair sold. As such, Warby has looked at the customer value proposition and created a very compelling offer.
Red Bull: Perhaps no other brand has done more for the branded content movement than Red Bull. The high octane energy drink is less about spinning the Red Bull brand and far more about creating high-energy content for high energy youth. As such, Red Bull is providing value with bespoke entertainment that can’t be found anywhere else. The Red Bull space jump alone grabbed over 36 million You Tube hits as it told a bold and daring story of breaking the world sky-diving record. Coming soon will be the world’s most daring ski and boarding movie entitled Days of my Youth. Red Bull’s deal is an exchange of value made possible by their cool brand.
Going forward, there is considerable opportunity for marketers to anticipate consumer needs and wants while leveraging new technology to create better products and experiences. As an example, Nissan has been engaging consumers in product co-design projects and just announced last week that they intend to re-invent the customer sales and service experience with real-time satisfaction feedback.
There is no question that marketing as a service can create brand differentiation and enhanced loyalty for innovative marketers. But to get there we will all need to clean out our closets a bit and make room for some new styles. And we also need to see that brands are as much internal and cultural as they are external and promotional and we need to create organizations that have the customer and value creation at the center of everything they do.
By: Kevin Smith, Founder & Principal, brandmachine
Recently, in a major industry announcement, it was learned that one of the automotive industry’s rock stars has left his lead Infiniti post to join Cadillac. Johan de Nysschen, who formerly earned his stripes at the red-hot Audi brand, takes the helm as Cadillac is now well-into the second phase of a brand renaissance. Our take is that this is a strong hire for Cadillac and if de Nysschen is truly given the time, resources and wide-ranging authority that GM President Dan Ammann has promised, Cadillac can continue its rise to challenge the luxury leaders.
But first, de Nysschen will need to steer Cadillac into some calmer waters as Cadillac has hit some rough seas during the past year. Despite great buzz around the highly anticipated ATS launch, sales have been faltering and as of July 1, Automotive News reports that Cadillac is sitting on a 113 day supply of inventory; one of the highest in the U.S. industry. And the launch of the highly anticipated ELR, the brand’s flagship electric coupe has been a major disappointment having sold just 400 examples of the $76,000 vehicle since February while being packed with over $10,000 in incentives.
So here’s our look at what’s in store for Cadillac as Johan takes the big chair at Cadillac:
Setting Expectations: Cadillac spent nearly 4 decades eroding brand value with a litany of product and image setbacks. Now going on the second generation of its brand and product renaissance, it’s only recently that Cadillac has made significant headway in its turnaround. Indeed, it has taken ten years, and easily more than $10 Billion to get the brand back on the rails and moving in the right direction. But despite these investments, most industry analysts still see Cadillac as a solid tier 2 luxury brand and suggest the brand will need another renewed commitment and investment for long-term success. Cadillac is building competitive products but the premium segment trades heavily on exclusivity, leading technology and cachet; areas where Cadillac needs to raise its game again after many years of neglect. De Nysschen needs to get everyone on-board with how long the next phase of the turnaround will take and what it will truly cost. Again, he has the perspective of the Audi brand comeback from the brink during the “unintended acceleration” drama in the mid-80’s to where it now competes toe-to-toe with BMW and Mercedes—a thirty year march of persistent focus, investment and delivery. So everyone needs to buy in from the GM Board, to GM President Dan Ammann and CEO Mary Barra to let him do his thing the right way.
Culture & Governance: One of Cadillac’s core challenges is that it competes for resources against GM’s “other mouths to feed” across the portfolio. For instance, Cadillac has long-needed a premium flagship but other brands in the GM stable have had equal, if not more critical needs and wants as well. So the ongoing challenge is who gets fed first? That needs to change. Premium brands bring huge margins but also require a relentless focus and continual investment without cutting corners. At premium focused BMW and Mercedes, these aren’t the same everyday challenges. And at mass and premium brand house VW AG, where de Nysschen has extensive experience, there is a proven balance of feeding the workhorses (VW, SEAT and Skoda) and simultaneously the race horses (Bentley, Bugatti, Lamborghini, Porsche Ducati and Audi) with equal care. No doubt, de Nysschen, the former Audi executive that made a business case for Audi resources while at VW AG will have useful experience, insights and outsider perspective in this role at GM. But GM’s stakeholders also need to let Cadillac stand as GM’s “tip of the spear” without bureaucratic interference. They need to hold de Nysschen accountable for P&L and brand metrics on a realistic timetable, but they also need to give him what he needs to succeed. And, de Nyschen, with GM’s support, needs to craft an esprit d’ corp across the Cadillac enterprise. Maybe consider making Cadillac the destination Division at GM and staff it with the best and brightest as was the case in the brands’ halcyon days. Bring back Cadillac’s gold flag that flew over the headquarters building and maybe even create a physical location for the Cadillac Motor Car Company.
Product: de Nysschen is said to have a critical say in Cadillac product planning and we bet one of his first initiatives will be filling-in the low-end of Cadillac’s line-up as was his intent more recently at Infiniti. The Milennials are starting to play an important role in the luxury market and they are seeking a different luxury expression than their parents. This cohort will represent a huge opportunity for Cadillac to start anew and the affordable Mercedes CLA and Audi A3 have proven big hits with younger buyers. Cadillac needs smaller & affordable yet premium products like these mach schnell. At the upper end, Cadillac will finally get a worthy flagship with the 2016 LTS and while it will feature some of the cues from the gorgeous El Miraj concept, we are hearing comments from observers that, although evolved, its’ Art & Science design language is starting to look dated after more than a 10 year-run.
Cadillac’s bold and polarizing design strategy has definitely cut a clear path for the brand but it’s also in sharp contrast to the more simplistic Bauhaus cues of BMW Audi and Mercedes that many luxury buyers prefer. As such, it may need a fresh look and de Nysschen should have an important say in what that is. What’s more, de Nyschen will bring a much needed eye for “magische handwerkskunst”, what Germans refer to as “magical” craftsmanship”. If he can further elevate Cadillac materials and interiors and fix Cadillac’s CUE system to emulate Audi’s industry-leading Audi Connect, Cadillac will clearly benefit.
Pricing: GM leaders were hopeful that the new series of Cadillac products could command competitive premium pricing at par with luxury leaders; as such Cadillac priced directly at competing import brands. But the ATS launch has shown Cadillac is still struggling with their parity strategy. Presently, according to dealers, Cadillac products can’t command pricing in line with the top echelon brands. Pricing is especially viewed as a key challenge for the ATS and inventory has been building up, but instead of dialing down production to meet demand, Cadillac has hit the incentive button and residual values have suffered which are key to the luxury leasing business and long-term brand health. Johan will have a delicate balancing act with pricing until Cadillac earns its premium value stripes to price at par with its competitive targets.
Place: Despite years of trying, Cadillac has struggled taking Cadillac global. Cadillac has also been late to the booming China market; however, the brand is finally starting to get some traction with sales up 67% to 50,000 vehicles in 2013 with hopes to double its China sales within a few years. To that end, GM has also spent big on a new Chinese plant to spur that rapid growth. Closer to home and on the dealer front, Cadillac dealers will need some love with all the recent leadership changes but early signs are that they are impressed by the Johan hire.
Brand Image: Cadillac’s brand baggage ultimately manifests in its inability to draw more import buyers to the brand. But the problem isn’t awareness but rather a lack of relevancy and credibility to a generation of car buyers that have been fed on the performance, technology and cachet of German luxury. In a gesture that Cadillac recognizes a need to change, Cadillac’s logo has been refreshed to present a less dated look. And Cadillac’s driving dynamics, as exhibited in the ATS have raised eyebrows for beating its BMW 3 series rival. Similarly, accolades like the CTS pick as Motor Trend’s Car of the Year, are helping to further burnish the brands’ carmaking credentials.
Promotion: Cadillac still needs to find a voice and “brand glue”. Former GM CMO Joel Ewanick took a bold leap with resurrecting the famous “Standard of the World” tagline but that’s been abandoned in yet another churn of Cadillac taglines, marketing manager jobs and agencies-of-record. Indeed, it’s hard to keep count of the brand managers and agencies that have worked on the business from Modernista! to BBH to Fallon to Rogue over a stretch of just a few years. What’s more, it seems that Cadillac often ascribes to a “launch and abandon strategy” with limited advertising support of nameplates after vehicle launch cycles. By contrast, de Nysschen’s Audi has one of the most consistent strategies in the luxury game under the global platform “Vorsprung durch Technik” (global) and “Truth in Engineering” (U.S.). This is the kind of internal/external brand platform that Cadillac needs and Johan will be looking to new CMO Uwe Ellinghaus, who brings experience from BMW, to help re-invigorate Cadillac marketing globally.
Without question, Cadillac’s new leader has a long “To-Do” list. But at the same time, Cadillac has made headway on the journey and has strengths it can build on. Given a continued focus, investment, patience and non-interference from GM leaders, Cadillac’s best days can surely be ahead of it with a seasoned leader like de Nysschen at the controls.
–authored by: Kevin Smith, Principal/brandmachine
brandmachine is in the business of creating brand solutions and going to newer and better places.
By Kevin Smith
The brandmachine is big on the increasing trend of interactive and consumer participation in all things from co-design to interactive entertainment. So we were keen to learn more about a couple developments that further demonstrate consumers getting more say in marketing, product development and content creation.
First, ABC has been going hard in their promotional efforts around “Rising Star” which premiered this Sunday at 9 PM. The new reality talent show blends real-time voting and input from an interesting panel of judges. Industry observers feel the new concept can be a winner in an environment where other reality performance shows are getting lower ratings, and even the axe, which was the case recently with The X Factor, which Fox canceled after three seasons.
The Rising Star concept originated in Israel a couple years ago and is now one of the world’s hottest TV shows. The consumer insight behind Rising Star is that in a world geared to instant feedback, the more predictable and traditional delivery of shows like American Idol has played out to viewers who desire more engagement in content. Now, the shows’ producers believe it is crucial to engage viewers more intimately into the program. Indeed, one of Rising Stars producers that has been involved in over 300 American Idol episodes predicts the death of the traditional celebrity judged show without real-time viewer interaction.
So here’s how it works…Rising Star kept only 30 contestants out of over 2,500 original auditions. The program is hosted by Josh Grobin and will be judged by an eclectic panel featuring Ludacris, Brad Paisley and Kesha. Viewers download an app and are sent tune-in prompts while having the ability to download songs that appeal to them. The winner of the competition gets a Capital Records recording contract.
Early returns suggest the show has room to grow as the competition’s first episode was watched by 5.1 million viewers and achieved a 1.5 rating in the desired adult demo of 18-49. Billboard and others called out the show for a couple bugs with sub-par singer talent and a judging team that needs to establish chemistry. It also didn’t help that NBC slotted a new episode of America’s Got Talent in the same slot in attempts to blunt the launch of Rising Star. However, the concensus appears that the real time engagement aspect is a keeper. In other metrics, the app has been downloaded over 1 million times and the show led tweets of all broadcasts Sunday at nearly 150,000.
Quirky’s First TV Campaign
Crowdsourced invention company Quirky has picked up the megaphone with its first broadcast TV effort and it really seems to cut through the clutter. Quirky was established in 2009 and has gone on to develop over 300 products and a community of over 900.000 inventors. Quirky sells their inventions in an online shop or several retail stores like Home Depot and Best Buy with whom they’ve partnered.
The spot debuted on Saturday Night Live and really caught our eye with a break-through-the-clutter visual of a man strapped to the front of a bullet train. That man, it turns out, is the decidedly dispensable CEO of Quirky, Ben Kaufman, who tongue-in-cheek, really isn’t all that necessary since the community of Quirky really runs the operation with “real people people like you”.
VO: “This is Ben Kaufman, father of Quirky, AKA the world’s least important CEO which is precisely why we’ve tied him to this high-speed train. At Quirky, our products are invented by real people like people you who submit their ideas to our website…so whether our CEO makes it or not, Quirky will continue to invent incredible new things”.
Overall, with more developments like these, it’s interesting to see how technology continues to bring the empowered consumer across the red velvet rope in innovative ways. It’s a great time to be in the marketing and brandcom business.
Brandmachine is in the business of helping solve problems and going to new places:
By Kevin Smith
We recently had a chance to test drive the all-new 2015 Mini Cooper. The good news is that the new, improved and highly refined Mini is now one of the best premium small cars in the world. The not so good news is that it’s no longer as unique and fun as the Minis before it. As Mini continues to expand its product range into sedans and SUV’s, and as BMW seeks to grow small FWD cars off common vehicle architecture, it needs to make sure it maintains leadership in fun-to-drive cars that represent the core of the brand promise. What’s more, while listening to customers for ways to improve the car, they also need to preserve the attributes that make Mini advocates so loyal and passionate for the brand.
The all-new 2015 Mini has just recently gone on sale and has been pretty well-received by the popular press and buff books. That said, it’s not getting the same kind of love from “Mini Nation”; the bread and butter loyalists that write the checks and spread the Mini gospel. Their main issue with the new Mini is it’s “mini-ness”…or, more appropriately its’ increasing lack thereof.
With each subsequent Mini Cooper generation, much like VW’s Golf (and even the Mustang recently), the Mini hatch has grown in size and weight taking on more adult-friendliness with better room, ride and comfort while seemingly leaving out more of the fun-loving, playful pup of the original 2000 model year re-incarnation.
At first glance, the Gen III is not huge, but it’s certainly not “miniature” either. This becomes more obvious when comparing it in the context of Mini’s design evolution. In a nod to increasing industry pedestrian crash standards, the new Gen 3 Mini stands taller, the front overhang is longer and the car gains a bit more cartoonish grin as well. Make no mistake, the new Mini maintains its iconic shape but with each generation it moves a bit further away from its original and more minimalist retro-futurist design.
Get inside and the first thing you notice is a much bigger cabin and higher cowl height more similar to other small cars on the market. And your passenger now sits further away from you versus “right next to you” in the best of the British motoring small car tradition. Surely, many owners asked for a bit roomier interior through the IQS surveys and Mini has certainly complied; indeed, the boot area is a claimed 50% larger and knee room is equally improved. We’ve heard that a few Mini owners have also complained about the classic throwback instrumentation of Gen I and Gen II models and those complaints showed up on J.D. Power scores. So those who had issues, as well as new customers to the Mini brand, will appreciate the more conventional placement of the speedometer, moving from the big round dial in the middle of the dash to a small pod behind the steering wheel like most other small cars.
Similarly, the window controls move from their fighter pilot in-dash toggles to the more traditional in-door location and the cheap plastics and rat fur headliner have been replaced by near-BMW quality soft touches. The new Mini control panel is cute and functions nicely but it’s possibly a bit too gimmicky featuring a big ring that lights up with driver interaction for heating & cooling and radio volume.
Our first test car was a Volcanic Orange Cooper S equipped with a BMW-developed 2.0 liter 4 cylinder and six speed automatic with paddle shifters (a 6-speed manual was sadly unavailable). The new S powerplant puts out 189 HP while delivering a claimed 28MPG city and 40MPG highway and 0-60 sprints in 6.5 seconds. We immediately drew comparisons to the outgoing 2013 model and noted that the new car is more solid-feeling but it seems to have a “taller” over the road feeling which takes it one more level away from the glorious handling of the original Mini. In Sport mode, the steering can dial up a pretty nice on-center feel but the size and added weight of the new car creates more of an isolated experience and a general loss of connectedness to the driving experience.
We have been critical of the second gen Minis losing a bit of the go-kart feel of the first gens and we see more of the same with this car. However, we feel the new BMW sourced engine is definitely a keeper offering the most refinement and power throughout the rev range of any Mini engine offering to date. The paddle shifted 6-speed manu-matic is also a significant improvement and offers near DSG responsiveness and faster acceleration than the manual tranny Mini. Punch the gas and the new Mini exudes a nice deep roar with a hint of turbo twist. Hit an on-ramp and the Mini plants its feet and begs for more. Still, while this car can outhandle most any small car, we miss the more juvenile “wild thing” handling of this Mini’s older brothers that made it more unique than any car on the market.
We also had an opportunity to test drive the 3 cylinder base coupe and came away maybe even more impressed by this entry-level car versus the nearly $4,000 pricier S model. Powered by BMW’s new Twin Power 3 cylinder turbo this model is a lot of fun to drive and definitely a better bang for the buck. Mini shaved a whopping 2 seconds off the outgoing base coupe’s 0-60 time with this new set-up and while 3-pot motors have been a tough sell, we think this one is a gem. It’s basically a 3.0 liter BMW inline six sliced in half and in addition to surprising smoothness and boost, serves up 30 mpg city and 42 mpg highway. The base Cooper is on sale starting at $20,745 and offers a lot of premium small car virtue.
Kudos to BMW and Mini for making a damn fine machine that sets a new bar for premium small cars. The Mini has finally been fully injected with “BMW-ness” and we think it will be a solid performer in the showroom. But again, we feel these cars miss the mark as better Minis. Overall, much like parent company BMW has recently compromised their “ultimate driving machine” product delivery, we feel Mini needs to keep an eye on their brand DNA by building the most fun-to-drive products in their segments.
We’ve heard from our sources that the zesty Mini recipe may have been diluted to address the aforementioned ”Things Gone Wrong” customer complaints in an effort to improve IQS (quality) scores and as such gain more loyalty and conquests for the brand.
But if that’s the case then perhaps BMW overlooked the other critically important customer pleasing aspect of quality; “Things Gone Right”…the many aspects of quality that make people smile and often overlook a car’s shortcomings to a certain degree. The Mini Cooper is still fun-to-drive but it has lost its highly differentiated and relevant brand position as the King Hooligan of the hot hatches.
We believe BMW’s emerging platform strategy has a lot to do with this new and more premium Mini (both good and bad). The sweet motors, the craftsmanship and refinement are all BMW. That’s great. And we get the goal of leveraging common platforms and architectures for efficiencies. But that’s also the rub. BMW brand will soon be in the FWD car business with their upcoming Active Tour 1 Series. We hate to say it but we sniff a hint of badge engineering here as this Mini seems more like what a BMW-branded compact car would be (and soon will be) like. Again, these are wonderful small cars, but can we please get our rough-edged Mini back?
But perhaps we’re sounding the alarm to soon. After all, the crew in Bavaria have answered the critics by showing us how they steered BMW back to its Ultimate Driving Machine roots with their latest generation of 2 and 4 series cars. And certainly they can do the same with Mini.
As BMW has brought us the 2-Series as a spiritual successor to the 2002 and original 3-Series, we’d like to see a new and smaller nameplate entry slotting beneath the more grown up Mini Cooper and perhaps joined in the showroom by the uber cool Rocketman concept, which debuted at the 2011 Geneva Motor Show and that one day soon could be that car.
Couple the Rocketman to the recently teased Mini Superleggera Vision roadster and Mini is back on track with some new swagger that will surely please newcomers and loyalists alike.
By Kevin Smith
We couldn’t help but draw comparisons between two big industry events staged this week; the NFL Draft and FIAT/Chrysler’s highly anticipated presentation of their global business plan to analysts.
In both cases, we saw prospects polished up and presented to the media with high hopes and lots riding on their futures. There were bold proclamations, swagger and hype, and no shortage of criticism leveled from expert analysts.
Just 5 years ago, FIAT stepped in to clean up the mess left by Daimler and later Cerberus Capital. And now, with an IPO coming soon, we will see the companies come together as FCA (Fiat Chrysler Automotive) and enter the global car league with a unified front. Chrysler is setting the stage for that moment and their analyst presentation this week was a seminal event to build momentum toward the public offering on the NYSE in October.
Looking back over the past few years, Sergio and the Turin crew have done an admirable job to create a new culture and operational turnaround. The true believers in Auburn Hills, echoing the line in the Chrysler 200 Super Bowl spot, have truly “been to hell and back”. Still, this comeback has mostly been led by highly profitable Ram pick-ups (U.S. market share rise to 21.7 percent) and the Jeep brand (solid Grand Cherokee launch, Cherokee late but gaining good traction). Make no mistake, it’s still easier to score with trucks and SUV’s; passenger car success and FIAT’s struggles remain ever-present challenges in Auburn Hills. What’s more, platform and manufacturing integration, keys to creating more efficiency, still trail industry leaders significantly and the company has little participation in the booming expansion in China and a home EU market that remains in comeback mode. In sum, they are due a tip of the hat, but there’s still a lot of work to do before end zone celebrations commence.
So it took many by surprise when Chrysler campaigned this week that they would soon be nipping at the heels of industry leaders like Ford and Toyota in the next few years. And there’s a lot to like here. The brand portfolio, long an overlapping mash-up fueled by badge engineering dating back to the ‘60’s, is finally getting sorted out with some solid thinking. Chrysler will play “down” as the volume car/crossover brand with new products and as the sole bearer of the minivan flag. Ram does trucks. Jeep meantime will step on the gas with an eye to a million units and a bigger global footprint while Dodge will go niche as a focused performance brand. On the luxury front, Alfa Romeo will fight tier one premium players like BMW and Audi, with eyes on big volume, while Maserati and Ferrari play the halo role. All good. And overdue. And hey, not a bad little brand portfolio they’ve assembled here. Where it starts to get a little loose are the shock and awe volumes and profits and the pace of investment and growth between now and 2018.
• It expects overall sales to jump to 7 million worldwide from 4.4 million last year.
• Grow profits of $7 billion a year by 2018.
• Grow North American sales to 3.1 million up from 2.1 million in 2013
• Chrysler brand sales increase from 350,000 in 2013 to 800,000 in 2018
• Spend nearly $10 billion on its luxury brands
• Doubling Jeep production by 2018 to 1.9 million vehicles as it plans to build its iconic SUV in six countries, up from just the United States.
• Worldwide revenues to jump from 86 billion euros ($121 billion) to 132 billion euros ($184 billion) with 9 percent annual growth.
• Expanding Jeep production from four United States plants to 10 plants in six countries by 2018.
• Will build 900,000 Jeeps annually outside North America
Nobody likes perseverance, a comeback story and calling a shot like Americans. Joe Namath cemented his reputation that way. Tom Brady was passed over in the draft, played with a chip on his shoulder and went on to be an all-world QB. Even Rudy persevered and finally saw the field at Notre Dame.
But Wall Street analysts are a different bunch. They like numbers. They like them justified. And they like consensus. They look at things like the external factors environment, the capital required for R&D, platform alignment, commonality and brand equity. To them, it’s less about a moving PowerPoint presentation, Super Bowl spots and untapped brand DNA and more about how you deliver the numbers. So here’s the rub.
The Chrysler business plan looks good in a war room at Chrysler HQ. But like a football draft war room with tons of film clips, you don’t get a sense of how a recruit will do until the pads go on and the scrimmage goes live against the seasoned vets. Chrysler is just figuring out the global car game against a lot of blue chippers with big time reps. Toyota, VW, Ford and GM have been there and done that. They too have been building plans and there won’t be any red jerseys when that rookie drops back and steps into the pocket.
We think the new FCA will be more than all right over the next five years. Indeed, many analysts laughed at the projections of Chrysler’s last five year plan and Chrysler actually hit many of those targets; but we don’t see the sweeping growth laid out in the business plan. Jeep has big global volume and profit upside for sure. And Ram has shown the ability to punch above its weight (although it won’t be refreshed for a while now). Alfa has loads of untapped potential but the bar is high and moving higher fast in the global luxury game. However, it remains to be seen how core volume FIAT brand will fare longer term not to mention a trailing environmental playbook for the corporation.
With a 12% stock decline after the investor meeting it’s clear that analysts aren’t buying into the numbers. One analyst pointed out that the company is seeking a 56% increase in an industry expected to grow 15-16% over the same period. Still, we like the moxie of the crew in Turin and Auburn Hills. If Chrysler can deliver half of what they’re calling for in the business plan it will be a stronger concern for years to come; in other words, FCA could be a nice pick-up in the draft at the right price. As always, for footballers and brands, it’s less about what you say, and more about what you do on the field that counts.