A few years ago, when I worked at Cadillac, we studied the customer-buying experience in great detail. Our customers talked about how uncomfortable they were when buying a car. They felt cheap and as if the dealer was taking advantage of them in the negotiations. The proverbial "used car salesman approach" was well earned.
Customers typically felt as though the negotiations were not honest and above board. They would make an offer. The salesman would disappear to "check with the sales manager" to see if the customer's offer could possibly be accepted. The customers believed that the salesman was actually in the break room having a cigarette, making them sweat. In that way, they would be more likely to accept any counteroffer he made.
The customers' sense was that these negotiations were insincere; they felt cheated. How could they know that they had received the best price on the car? Their neighbors bragged about the deal that they had received. Was the price they negotiated as good, or, did they lose out in the deal? No matter what eventually happened, the customer often felt bad about the experience. They said so in our research and in J.D. Power & Associates surveys about the buying experience. But we were in the business of making the customers feel good about their purchase, not uncomfortable!
‘The salesman would disappear to 'check with the sales manager.'’
When GM decided to create Saturn, the intent was to create a new customer experience. GM had not performed particularly well in the small car market. To compete with the Japanese, top management decided to locate Saturn in Tennessee, away from Detroit and all that was typical of GM. Many of the leaders assigned to Saturn were from Cadillac and were aware of the research concerning the purchasing experience. They set out to create—as they said in advertising—a "decidedly different" customer-buying experience.
Saturn management listened carefully to customers. For starters, executives decided that there would be one price, and it would not be negotiable. In that way, the buyer need not worry that someone else was getting a better deal. The "hard sell" approach was dropped. Customers were encouraged to look over the cars and ask questions, but the intent was to let the customers and cars interact on their own, without the salesperson being involved until needed or unless there was a question.
Learning process
This approach was founded upon serious retraining on the part of the sales staff. They were taught what tactics and sales strategies would create the best sales experience for the customers. The Saturn ad campaigns echoed the sales strategy: they highlighted the sales experience as being different, fair and fun. They showed salespeople driving hundreds of miles to show a car to a customer in a remote location. The message from Saturn was clear: We want you to have a pleasant sales experience, and you will love your car! Saturn executives had listened and heard their target market asking for change in how cars were sold.
The entire sales experience was designed to relieve the customer anxiety about the purchase price and the purchase decision. Saturn was the first new car division for a U.S. automotive manufacturer since Ford introduced the Edsel in the late 1950s. Saturn leaders had been given a chance to design their sales process and customer experience from a clean sheet of paper. They listened well and reinforced the message in their ads. The focus was on having a great sales experience as much as it was about the innovative qualities of the car. In a very real sense, they were selling the customer's buying experience.
Saturn's sales for the first couple of years were quite brisk, averaging nearly 1 million units per year. Saturn products and the sales experience continue to evolve. Sales growth was better than 6 percent for both 2006 and 2007. Saturn has been able to launch innovative new products while maintaining the "fun and fair" mantra of the customer sales experience.
Obviously, the experience after the customer has bought the car is important in the long run. However, Saturn was launched in an attempt to change the customer experience with GM small cars. By almost any measure, including sales, that was achieved by listening well to what the customers described as their desirable experience as well as the pains that they had experienced in the past.