Bob Lutz's New Years To-Do List: Fight, Take Advantage Of Consumer Ignorance

Edward Niedermeyer
by Edward Niedermeyer
bob lutz s new years to do list fight take advantage of consumer ignorance

GM’s VP got a guest spot on Edmund’s Inside Line to promote his “to-do list for 2010.” The top two spots on the list are dedicated to Lutz’s resolution to “remain focused on the product above all else,” presumably because “stop repeating self” was cut by GM PR. But number three on Lutz’s list is of considerably more interest. Labeled “change minds,” Lutz uses the entry to defend the General’s “perception gap” hobbyhorse. You see, when GM accuses consumers of being too stupid to understand how great GM’s products are, they aren’t actually calling consumers stupid. In hopes of clearing up the confusion, Lutz does what any other savvy marketer would do: call the media stupid.

Let me digress for a moment and say that I’ve seen it written that GM’s marketing strategy is based on the fact that the consumer is too dumb to know what great vehicles it makes. I take huge issue with that. That’s an example of the media trying to ascribe some of the old GM arrogance where none exists.

But wait, there’s more. Having blamed the world’s most convenient scapegoat for a reputation he later admits GM deserves, he explains that the perception gap may not even exist:

It’s not arrogant to think you have great vehicles, so long as you do, and to try to spread the word about them. No one at GM has said that every vehicle we have is world-class — we still have room to improve. And no one at GM, including me, has said that the consumer is too dumb to realize how good our new products are. All we’ve said is that the consumer perhaps is unaware of said fact. That’s a far cry from being dumb.

And the typical consumer’s unawareness is a result of one of two things. First, the consumer literally may not know about our products and what they offer; or second, the consumer knows of them but chooses not to consider them, for a variety of reasons ranging from a bad previous experience to a relative’s bad previous experience to a neighbor down the street who has a relative who knows someone else who had a bad previous experience. In short, it’s reputation.

No, nobody at GM has ever accused anyone of stupidity. Except for maybe the one time GM spokesman Gregg Martin said it was “strange” that Rep Pete Hoekstra “would want to perpetuate some of the misguided thinking that resides outside of Michigan.” Or when Lutz himself said “Detroit and the U.S. domestic auto industry need to change a lot of perceptions — often misguided and wrong perceptions — the rest of the country has about us if we’re to turn things around.” Or when he compared import buyers to suicidal rodents. Or when he said:

We’re not going to erase that perception gap in this generation. People are still going to go to the Toyota store and are still going to get a Camry. They’re not going to care that most of the models are no longer recommended, and they’re not going to care about all the quality problems. It’s a learned response. That’s going to be hard to erase.

And on and on. No, GM has never called a consumer “dumb,” just “misguided,” “strange,” “wrong,” and “lemming-like.” Which is actually just how Lutz likes his consumers, as a quote at the end of his new year list reveals:

We realize, and this may be a little inside baseball for you, that “General Motors” itself may be what someone could label a “damaged brand.” (Someone might say that, but not me!) Even if that were true, and it may be, that alone would not be the reason we would choose to emphasize our brands more than the parent company. The reason for emphasizing the brands is that we’re proud of them, and their heritage, and their vehicle lineups, and what they represent: a glorious past and a potentially bright future.

Besides, there may still be that one person out there who says, “GM? They went bankrupt! Took money from the government! I’m not buying any GM car! Chevrolet? Yeah, Chevrolet’s OK. American car, right? I’d look at a Chevrolet…”

I’d put that guy in an Equinox in a heartbeat.

Sigh. Maybe MaxBob will figure the perception gap thing out next year.

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  • Happy_Endings Happy_Endings on Jan 06, 2010
    That’s an example of the media trying to ascribe some of the old GM arrogance where none exists. Uh, aren't you from old GM, Bob? And I think there are those would label your arrogant as well. Of course, there isn't a perception gap. GM makes cars that are competitive, not great. You see, if you keep saying they are great when in actuality they aren't, then the perception gap is on your side. Perhaps that's is what he is talking about when he says "perception gap". He thinks if he keeps saying it, people may start to believe it. But making competitive cars isn't good enough to get widespread defections from the competition. It is, however, good enough to keep your customers from leaving. To attract new customers, your cars must be better than the competitions offerings. Why would someone buy your car when it is merely just as good as everyone else's? This, of course, doesn't take into account prior negative experiences with your company, questions about the future of your company, and general ill-will to your company. All those things will factor into people's car buying decision.

  • Steven02 Steven02 on Jan 07, 2010

    It is interesting how much pulling of the article there is. First, he is saying he doesn't like how people write that GM marketing is based on the fact the customer is too dumb to know what great cars GM makes. He is talking about exactly what is being done in your article Ed. Funny, in one of the articles you were quoting, talking about taking exception to a media hatchet job, looks like that is what I am going to be doing. GM hasn't always made the right choices. GM hasn't always had the right people working for them. GM had years of problems with vehicles that were terrible. Subpar, well that actually might be a complement to some of them. This article was about what GM needs to do to get better. He stresses focus on the product and lists it twice, which I believe is exactly what GM needs to do. The third item is to change minds. This can only be done if they focus on the product. In this section, he addresses what he calls a reputation deficit. One that he said was earned by GM. Let me translate for you, Bob said they earned the perception gap they have today. He also mentions a few things that GM will do to help address it. Fourth is technology and quality, which IMHO, are part of number one and two. Last is design, which again is part of number one and two. The part at the end about baseball and the customer not want GM, I don't know exactly where he was going there. But if that customer exists, which I am sure there are a few people out there who don't know that Chevy is part of GM, I am betting if a GM dealer sees them, they will try to sell to them. But, the article you wrote focuses on not what GM wants to do and criticizing that, you seem to talk about how GM has and hasn't called customers stupid. It is only at TTAC can you see a quote twisted so much to suit your own beliefs. GM isn't where it needs to be today if it is going to compete. It has some pieces in place with some great models that are selling well. GM needs to keep them selling well, by keeping them fresh and making them reliable. If GM can do what is listed in the article, then GM will be successful. Instead of taking the one liner and making the article all about that, which seems to be in my opinion a media hatchet job, why not talk about what Bob was trying to convey in his article?

    • Imag Imag on Jan 07, 2010

      Maybe it's because GM has made the same improvement claims for years, without a whole lot of improvement. Maybe it's because they repeatedly blame customers, the media, and non-American car companies for their inability to build world leading cars. Maybe because a savvy journalist will try to look past what marketing people say to what the companies actually do... Finally, the fact that TTAC is not in love with GM's hype should not be news to anyone.

  • Jeffrey An all electric entry level vehicle is needed and as a second car I'm interested. Though I will wait for it to be manufactured in the states with US components eligible for the EV credit.
  • Bob65688581 Small by American standards, this car is just right for Europe, and probably China, although I don't really know, there. Upscale small cars don't exist in the US because Americans associate size and luxury, so it will have a tough time in the States... but again Europe is used to such cars. Audi has been making "small, upscale" since forever. As usual, Americans will miss an opportunity. I'll buy one, though!Contrary to your text, the EX30 has nothing whatsoever to do with the XC40 or C40, being built on a dedicated chassis.
  • Tassos Chinese owned Vollvo-Geely must have the best PR department of all automakers. A TINY maker with only 0.5-0.8% market share in the US, it is in the news every day.I have lost count how many different models Volvo has, and it is shocking how FEW of each miserable one it sells in the US market.Approximately, it sells as many units (TOTAL) as is the total number of loser models it offers.
  • ToolGuy Seems pretty reasonable to me. (Sorry)
  • Luke42 When I moved from Virginia to Illinois, the lack of vehicle safety inspections was a big deal to me. I thought it would be a big change.However, nobody drives around in an unsafe car when they have the money to get their car fixed and driving safely.Also, Virginia's inspection regimine only meant that a car was safe to drive one day a year.Having lived with and without automotive safety inspections, my confusion is that they don't really matter that much.What does matter is preventing poverty in your state, and Illinois' generally pro-union political climate does more for automotive safety (by ensuring fair wages for tradespeople) than ticketing poor people for not having enough money to maintain their cars.