Friday, September 11, 2009

GM Offers 'Satisfaction Guarantee'

Sept 10, 2009
- Noreen O'Leary

In an effort to win back the trust of American consumers, General Motors has started offering a 60-day "Satisfaction Guarantee" to eligible buyers of new Chevrolet, Buick, GMC and Cadillac vehicles.

The new promotion, part of GM’s "May the Best Car Win" campaign, fronted by the company’s new chairman Ed Whitacre, allows customers to return a vehicle to their dealer between 31 and 60 days of purchase and receive a refund. The program runs from Sept. 14 through Nov. 30, although the company left open the possibility it may be extended.

In a conference call, Bob Lutz, GM vice chairman, marketing and communications, did not reveal the level of marketing support behind the effort. However, he said that on an index basis the auto company is matching spending levels of its closest competitor in the U.S., Toyota, and will out-spend the Japanese company in this current initiative. In the first six months of this year, Toyota spent $261 million in measured media, per Nielsen; in 2008, it spent $835 million. Prior to its bankruptcy reorganization, GM spent $520 million in the first six months of 2009 and $1.85 billion in 2008. (Those Nielsen amounts do not include spending in marketing areas like digital and direct.) GM became a U.S. government subsidiary after it emerged from bankruptcy in July.

GM previously spread that marketing support across eight brands. But post-bankruptcy, the company is focused only on the four brands covered by "Satisfaction Guarantee," as GM sells off non-core assets. 

"We know that we'll need to work very hard to get people's attention and encourage them to give Chevy, Buick, Cadillac and GMC a try,” Lutz said in a statement. “We think the ‘May the Best Car Win' campaign and the Satisfaction Guarantee offer should help re-instill confidence in the excellence of our products. We're putting our money down that if people buy one of our vehicles and don't absolutely love it, we'll take it back. We will stand behind them both in the short-term and over the long haul."

The commercials featuring Whitacre, the former CEO of AT&T, are reminiscent of former Chrysler chief Lee Iacocca’s "If You Can Find a Better Car, Buy It" pitch in the early 80s. The new GM spots break on Sept. 13 during Meet the Press, and will also appear during NFL football games that day. They will run until Sept. 20.

The next phase of the campaign will compare the attributes of GM models to those of competitors and is scheduled to run through December 2010. The broadcast, print and digital pitch is being handled by GM roster agencies Interpublic’s McCann-Erickson Detroit and media shop Publicis Groupe’s Starcom MediaVest.

In August, GM said it sold 246,479 vehicles, down 20 percent from the same year-ago period. However, thanks to the government’s “Cash for Clunkers” program, the company noted it was its strongest sales period to date in 2009.

Guarantee is becoming more popular these days across categories, but the latest one from GM can be the biggest item. Couple of things to consider to execute this promo for your brand may include:
  • Above all, make sure the product can deliver its promise without any doubt before even think of doing this kind of promo.
  • Make sure that unconvincing benefit is the real consumer barrier to try the product.
  • Don't be trapped in the communication by guaranteeing the mechanics instead of the satisfaction.
  • Prepare the system to avoid boomerang due to flawed mechanics, eg bad WOM due to high number of return or unclear terms & conditions.