Friday, May 29, 2009

Chrysler to Iacocca--Return Your Demo! Can Detroit Come Back?

This morning, Reuters is reporting that former Chrysler CEO and icon Lee Iacocca will be losing both his pension and lifetime company vehicle as Chrysler proceeds through bankruptcy.

Now, I don’t think that Iacocca losing his company car is any huge deal to him. He can probably afford to buy any vehicle he wants. But, the article did remind us that it was Iacocca who became a visible spokesperson for Chrysler appearing in numerous commercials proclaiming “If you can find a better car—buy it.”

This was back in the early 80’s and had more to do with the resurgence of Chrysler Corporation than did Ricardo Montalban’s pitch for the Chrysler Cordoba with its’ “fine Corinthian leather” in his inimitable accent.

Montalban, like Billy Mays, was a paid pitchman. It was entertaining though. But when Iacocca extolled the virtues of his products, we believed him. He was Lee Iacocca—the CEO, a giant in the auto industry. He was just talking to us on the TV and being honest and upfront (at least in our perceptions). Iacocca was talking about the value of the vehicles made by his company. And that’s where I’m heading with this.

The Detroit 3 are all in trouble. The only one which seems to be steadily working its way out of it is Ford. As we all know both GM and Chrysler are in bankruptcy. Very simplistically the way they’re going to survive and emerge from bankruptcy is through careful re-organization and a commitment to doing things right. A commitment which, quite frankly, just hasn’t been there for a while.

Let’s get back to that value idea for a bit. As an automotive sales trainer, the absolute foundation of sales is this from Zig Ziglar: “Buying occurs when value exceeds price.” It’s that simple. Except that too many sales staff, sales managers, dealerships and manufacturers have bastardized their approach to getting value to exceed price by discounting and rebating first and building value either not at all or as a secondary strategy (i.e. “lookit all you’re getting for a dirt cheap price”).

Back in the day, someone at Chrysler (or their advertising agency) knew this and enlisted Iacocca’s active participation. He was the first of the CEO’s to pitch his own product and no one did it better than him until Chrysler tried to reprise the approach in 2006 with “Dr. Z”—Dieter Zetsche, the Chairman of DaimlerChrysler.

Domestic manufacturers have to first engineer and build value into the products that they’re going to offer to the public. This basic rule is one which hasn’t been done well enough or often enough over the course of the last 3 decades or more by the Detroit 3. Even then it will be hard to get customers to return to their products.

“We build value when we talk to customers about what’s relevant to them,” is the next maxim that I work to impress upon sales staff as a trainer. And, the only way to find out what is relevant is to ask questions. The manufacturers are going to have to ask potential customers some questions about the products they want to own and drive and then work like hell to engineer it, make it and market it.

And finally (bear in mind that this is all in the 1st 10 or 15 minutes of the basic sales training class) as I trainer I cover the ways in which value is built with customers: “We build value when we talk to the customer in terms of what we do more of, better than and differently than anyone else when it comes to ourselves, our dealership and our product.”

Here’s my point. Most organizations don’t train their staff to approach sales in this way and yet it’s the optimal way to do it. Most organizations put the emphasis on sales at the end of the line—after the product is made and delivered to the retailer (remember that’s when the sale is counted by the manufacturer).

Chrysler and GM have an onerous task ahead when it comes to the financial and legal ramifications of their bankruptcy filings. But when all is said and done they are companies which design, build and market vehicles. Ultimately they have to do that and do it well.

What if the Detroit 3 reversed the process? Take a page out of Tom Peters. Put the focus on determining what is relevant to customers about the vehicles they wish to own and drive. Be “more, better and different” than any of the competing automakers when it comes to focusing on and responding to the needs and wants of consumers. And then deliver it to the dealer-body ready to be sold to the American consumer.

As these companies work to emerge from bankruptcy, they are going to have to do things to re-instill faith and confidence from the buying public. Maybe this is the way to go about doing it. And then maybe Lee Iacocca can get his car back.

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