Ed Whitacre Hosts Extreme Makeover: Cadillac Edition

June 14, 2010
2010 Cadillac CTS-V

2010 Cadillac CTS-V

Since emerging from bankruptcy a year ago -- June 10, 2009, to be exact -- General Motors has been trying to buff its tarnished image. Some of the company's work on that front has been controversial, like CEO Ed Whitacre's recent commercial touting the fact that GM repaid its federal loans months ahead of schedule. Other initiatives have been downright strange, like last week's bungled (and ill-advised) attempt to stop GM employees from using the word "Chevy" when they really mean "Chevrolet". And then, some efforts seem smart and spot-on, like Whitacre's recent series of pep talks with Cadillac dealers.

The meetings were spurred in part by a run-in that one of Whitacre's friends had at a Cadillac dealership in Texas. The friend had dropped in to test out a CTS-V sedan, but it ran out of gas during the drive. The salesman subsequently talked the friend out of the purchase, which is not exactly how sales pitches are meant to go.

In a nutshell, Whitacre's dealer chats drive home two important points:

1. Customers need a consistent experience across the Cadillac network; and,

2. That experience needs to be top-notch, leaving the customer feeling as if he or she is the most important person on the planet.

To address that first item, Whitacre has asked Cadillac's general sales manager, Ed Peper, to share with dealers some recorded phone conversations between Cadillac salespeople and customers, in which customers' complaints were routinely dismissed. (Clearly, some folks never heard that the customer is always right. ) GM also seems to have put together an image brief for dealers that spells out in clearer terms what are and aren't appropriate business practices. Giving showrooms a makeover using Cadillac's sleek, new black-tiled design? Totally on-target. Using balloons and neon to advertise sales? Not so much. This is the same sort of brief many other companies distribute to franchisees; why it's taken so long for something so detailed to roll out to Cadillac dealers, we really don't know.

To the second point -- the bit about the customer experience -- Whitacre has brought in trainers from the Ritz-Carlton, whose employees have an allotment of  $2000 per day per customer to help make up for bad service or boost a customer's experience when the time is right. Room service brought up a steak au poivre that was medium well instead of medium rare? No problem: here's a replacement -- and a complimentary bottle of Veuve Clicquot! It's probably not fair to expect every Cadillac franchisee to go that far, but it does demonstrate what good customer service looks like.

In doing all this, Whitacre is hoping to lure younger, more affluent buyers back to Cadillac. Today, the average Cadillac customer is 62, with a household income of just over $129,000 -- which sounds great, until you consider that BMW and Mercedes buyers are around ten years younger and earn about $170,000. Putting those folks behind the wheel of a Cadillac isn't going to happen until the brand becomes consistent, cordial, and cool.

Our take? Even though it seems a little late in coming, this series of dealer get-togethers is a really smart move for Whitacre & Co. But we still want to know: is it "Cadillac" or "Caddy"?


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