Screen shots of the new television advertising campaign, "We're building a new car company."

Marketing Mavens Advice for Chrysler

The epicenter of the domestic automobile business these days resides in Courtroom 523 at the U.S. Bankruptcy Court, Southern District of New York at One Bowling Green, New York, where Judge Arthur J. Gonzales, a respected jurist, is ruling on the corporate future of Chrysler, LLC in bankruptcy case 09-500002.

Through the legal funnel, a maelstrom of claims, analysis, counter-claims, appeals and rulings, Chrysler will emerge in a new business model. But a significant, critical key issue will remain unresolved, unsettled and unknown: How to get customers into showrooms to even consider buying a new Jeep, Dodge or Chrysler.

The facts are well known. Chrysler’s corporate image and reputation and that of its three brand names is that of severely damaged goods — product quality has been poor, designs lackluster, there’s no financing available, factories have shut down, people laid off, dealers are being closed and there’s a host of other issues and problems that must be addressed and considered.

What to do?

This is the perfect storm, cliché aside. What can Chrysler do, what must it do to attract potential customers, prospective clients and prospective consumers into its showrooms?

That is exactly the question I presented to several of the best and brightest minds I know in marketing, advertising, promotion and public relations earlier this week.

Some of those queried are key creative, marketing and executives in major ad agencies with automotive and non-auto clients, others are CMO’s or ad directors of competitive companies, big time media mavens and even academic intellectuals were contacted. All were promised that they would remain anonymous, replies strictly confidential since enough auto-ad-types are on the beach already. So here are some of their thoughts:

Maven #1: Obama has given Chrysler the chance to re-invent itself. They should take advantage of it. A little confident truth couldn’t hurt. This is news that I would tell customers. Imagine these creative platforms:

• Made in Detroit, backed by Washington
• Obama is behind our company, so yon can get behind the wheel of our cars
• We’re not going out of business, we’re re-inventing our business

On the big picture, Chrysler and Dodge should be retired. These are names associated with a loser third-string car company. Fiat and even Alfa Romeo are not much better. If I were running Chrysler, I would simply invent a new brand. A new car company for a new millennium. Call it Verde. (Italian for green). And not Verde Moors. Just Verde.   

Maven #2: What I’m going to say should be done by Chrysler and by its dealers.

Forget “image”. Forget “Buy U.S.A.” It’s a non-issue.

• Make an exhaustive list of the BENEFITS your cars have over the imported competition. Real, demonstrable stuff, like better mileage…safer in crashes…styling…whatever. In other words, don’t just say “Buy our cars”… tell the customers what’s in it for them. BENEFITS, NOT FEATURES.
• Dramatize these benefits, and bang away at them over and over and over until you run out of money.
• Make the point that “if you want (these benefits), here’s where to get them.”
• The message should be (not necessarily in these words): “We’ve got what you want. They don’t.”
• Naturally, “what we’ve got” should really be there and really be what some people want. Sure, not everybody wants the same thing, but that’s okay.
• I think Chevy’s got the right idea lately, with Howie Long pointing out the edge that various Chevy cars and trucks have over comparable Hondas, at least when it comes to mileage. Makes strong points and doesn’t look desperate. Could have more bite and edge, though.

Maven #3: These are such difficult and painful times for Chrysler, Dodge and Jeep dealers.

I don’t pretend to have answers to their enormous problems; however, if I were in their terrible positions, I think I would try to be the place to go to buy a car.

• I would do an incentive they couldn’t refuse.
• Other manufacturers are paying incentives up to $7,000. Offer more
• Pay the sales tax.
• Free gas for a year.
• Free maintenance for 5 years.
• Some wild give-away – when you buy a car – you get?
• An incentive to go to the dealership for a test drive.
• Offer birddog incentives

Maven #4: Select and use media for its economies, effectiveness and efficiencies. Personalize where possible. Get the biggest bang for the buck!

• Negotiate price with everyone
• Use the telephone to contact previous customers
• Write, email to offer service customers free check-ups
• Target within a limited geographic trade area with cable TV
• Use print ads in local shopper newspapers within a community
• Do not sell price, quality and value.

Maven #5: It’s the perfect storm of everything going wrong. And unfortunately the dealers are not in a position to solve those problems. The dealers are looking for brilliant, insightful leadership and a couple of big ideas they can get behind and support and can communicate easily.

Their dealers have the worst salespeople in the industry. The worst reputations. They have no ability to sell product or value. They have been so addicted to ‘manufacturing transactions’ through incentives for so long that they are good at putting the deal together, particularly when they have a cooperative lending institution, but they’re not able to do much more than that.

The answer does not rest with the dealer. The answer rests with Chrysler and what they need to do (from my perspective) is to address three things and to emphasize the same three things in every communication:

1. Sell the Product — They’ve got to sell the product. They can’t just say it’s an incentive, made in America or this or that, they’ve got to develop three of four cogent, meaningful, legitimate reasons why the consumer will want to buy a 300 as opposed to an Avalon or Maxima or a Taurus. They’ve got to develop three compelling reasons why you want to buy a Ram versus Tundra or an F150 or a Silverado. They’ve got to develop – you pick the SUV – on the Jeep line-up. They need to stay very focused on one or two products from each brand. Products that offer the opportunity to win.

2. Create Confidence — They must address the issue of confidence in the company. And they need to make certain people understand “you have an absolute, ironclad guarantee backed by the government” with full force and weight of the U.S. Government that if there are any problems with your product, they will be taken care of by certified technicians in appropriate facilities with genuine Chrysler parts.

3. Rebuild Reputation — We will stand behind you as a buyer or lessee and we are not going to let changes or temporary changes in your circumstance affect your ability to drive our products.

If they don’t address these three things they have absolutely nothing to talk about and dealers have nothing to sell.

Build for the future. The last thing I think they desperately need to do is to take a very aggressive approach for two and three year leases and not worry about the residual values. This is an “I’m going to get you in my products now” and I’m going to guarantee you the ability to trade into a new Fiat, a new Chrysler, a new electronic vehicle, a new hybrid vehicle when your lease is over at very favorable rates.

If they don’t create the opportunity for people to transition into their next generation of product, whatever that product may be, they’re done! The final piece of this, whenever they dispose the used vehicles, they don’t follow normal wholesale auctions. They actually set-up retail auctions in major markets around the country where the public can come in and bid for products coming off lease. There would be no traditional dealer margins, no wholesale margins and the result will be the customer knows “I’m gonna wind up getting a great late model car at a very favorable rate and I know it’s gonna be market rate because I’m bidding against other consumer customers.

If they’re not will to do something that big, that clear, I don’t think they’ve got a way to go. This message will resonate with dealers, they’ll get behind it. Customers will not have to go in and negotiate. There will be a simple payment for the existing leases today. I think it’s the only way they’ve got to go. It’s expensive, but it’s cheap relative to the money the government is dropping in the automobile business today. It is cheap relative to cash for clunkers. It is cheap relative to the other nonsense the government is contemplating. And the consumer winds up getting a fabulous deal and comes back to market in two to three years. But that’s just one man’s opinion.

The Lawyers Are Getting Paid First

One of the first motions filed by the litigious lawyers and legal leeches before in Judge Arthur J. Gonzalez was a draft order asking that legal fees and expenses be granted “superiority status” along with other Chrysler advisors. In non-legal-speak this means getting paid first.

One of the lead lawyers gets $900 per hour! And the estimated bills from lead law firm which this person works for could total $114.7 million. That comes out of the $327.4 million in court-approved payments to lawyers, bankers and accountants in the Chapter 11 proceedings. Can you smell the smoke of Cohiba’s in the conference room?

Now in all fairness and candor, there’s one question I much raise. Where in the hell is the get-a-cut-to-the-first-inline payment to Chrysler’s advertising agency, BBDO Worldwide?

According to filings Chrysler owes the agency $58 million, which makes them the second biggest creditor of the bankrupt company. And who has authorized the payment of monies to BBDO for the creative, production and media costs of the institutional advertising campaign that starts next Monday. And who set the creative strategy? Continued below.

Chrysler’s New Institutional Campaign

Chrysler’s new campaign is based on the theme “We’re Building a new car company. Come See What We’re Building For You” which is well intended … but as usual facts are obfuscated and obliterated in what should have — could have been —  a meaningful communication to assuage doubts of those who are interested, much less give a damn.

But this is a terrible marketing communication corporate campaign response to a grave need for candor, honesty and to build confidence and reliability. Chrysler can’t do a thing till Judge Gonzalez says it can. Zip. Zilch. Zero. And who knows when that’s gonna happen? (See previous rant)

Those who know and care about the company and the automobile business — 42% of American’s have said “Let ’em go broke? Or worse, “Who cares!” — already are well aware Chrysler’s in bankruptcy, which is never good.

Chrysler factories are closed, assets are being sold, people have been laid-off, and an Italian company is buying it for song and not even an operatic song at that. And one tiny fact, Chrysler cars, trucks and SUVs that were not selling anyway before the bankruptcy. Oops.

Of the five television commercials I reviewed on the media website only one resonates because it says here’s what we hope to become which is honest. And believable.

The other product spots are a sop to the 3,200 dealers (about to become 2,400) that the company is doing what it can to help them stay in business. And interestingly, these are among the best commercials I’ve seen in a very long time for Chrysler, Dodge and Jeep vehicles. Welcome back Corinthian Leather.

The media list covers the usual prime time efforts and national newspapers.

The 3,200+/- dealer/retailers of Chrysler, Dodge and Jeep vehicles have a vital role in the Chapter 11 bankruptcy proceedings in Federal Court in New York City. They are the key to the resuscitation of the once proud company and need focus, definition and confidence building … not corporate BS. How ’bout starting by telling all the facts?