The Auto Industry’s use of Twitter to shave costs and guide product development
I know, I know, you’ve heard enough about General Motors in recent months but the company has recently done something so outrageous that it has to be discussed. Historically, GM has shaved product development costs through a process known as “badge engineering” or simply offering the same product under different brands with minor updates to content, style, and, well, badging. You may be familiar with this strategy in classics such as the Chevy Camaro / Pontiac Firebird, the Chevy Cavalier/Pontiac Sunbird/Cadillac Cimarron (dubbed one of the worst cars of all time by Time magazine) and more recently with the Chevy Traverse, Saturn Outlook, GMC Acadia, and Buick Enclave SUVs. While this strategy worked for many years, eventually the product becomes so dilute the savings in engineering costs are outweighed by the lack of consumer interest.
Flash forward to “Now”. GM has recently exited bankruptcy with a new focus on its 4 core brands (Chevy, Buick, Cadillac and GMC), selling off Saturn, Pontiac, and Hummer to the highest bidder. The Buick brand, oft positioned as a “luxury” nameplate but only finding traction with the Bingo crowd, is being repositioned as “hip” and “contemporary” in an attempt to decrease the core demographic by several decades. Only problem with Buick is it doesn’t offer the latest “hot product”—a small crossover utility vehicle (CUV). Now, GM offers the Chevy Equinox, Cadillac SRX, and the yet to be released GMC Terrain all based off the same platform as the soon-to-be retired Saturn Vue. But the Vue offers a hybrid powertrain option which will resonate with the “hip” and “contemporary”… Viola! Buick’s answer in the form of, you guessed it, badge engineering.
So how does this relate to product planning, branding, and the web? Well you see, GM announced the new Buick CUV at the Center for Automotive Research’s Management Briefing Seminars in Traverse City, MI and within a week of the announcement, the once giant of the automotive industry was lambasted on just about every online blog, forum, and media outlet for reverting to its old ways and pulled the plug on the whole program!
“It does show that GM is now agile enough to kill a future product this quickly,” says IHS Global Insight analyst Aaron Bragman. “Or you can look at it as GM has not quite gotten its house in order. This thing should never have been released.”
Put another way, GM, is now using the web to speak directly with customers, industry analysts, and the general public through the blogosphere and social-media sites like Twitter. Christopher Barger, GM’s director of social media asserted the company reacted based on customer input on Twitter and other means. “Lots of feedback played into Buick crossover cancellation, but it does show that you CAN change the world w/140 chars or less,” Barger tweeted and that about says it all.
Is social media the preferred media of your customers, prospects, and contacts? I can’t say for certain but I can say that “breaking the mold” and using the transparency of the web to communicate with your target audience, specifically allowing your “target audience” to communicate with you will lead to far more harmonious outcomes at a much higher rate of return than any method in history.