Julie Roehm on the GM, Chrysler bankruptcies—Part II


Given the news that GM declared bankruptcy this week (and Chrysler recently as well), Fox Business News contributor; marketing consultant to numerous businesses; former marketing guru with Chrysler and Ford; and Meta CEO Julie Roehm spoke to RBR/TVBR regarding radio and TV advertising for both automakers–How will this affect the local dealers and what should Radio and TV do to help the local dealers move inventory? Any advice for broadcasters over the next six months going into 2010?


Julie Roehm Audio:

A lot of the advice you had given in the last interview—it sounds like that’s resonating with them as well. They have to put out the message. “we’re still here, we’re still producing cars, you can still count on us for service.” That should be at least one of the branding messages they should throw out.
Absolutely and I think hopefully the country’s becoming a bit more comfortable with the idea of bankruptcy doesn’t mean that you’re gone, it’s a restricting process and I guess for better or worse because we’ve had several of them really administered by our government in the last couple of months.  People are becoming probably less shell shocked over it then they were maybe say Q4 of last year.  Hopefully with the reinforcing message and some good product…the public is obviously very smart and to be able to show them something even if it’s coming out in six months. I think is going to be what is necessary to give future consumers hope about what they can look forward to.  It’s just showing the same things that they’ve seen that’s not going to be great. 

It’s one of the things I liked best about the Chrysler commercial that I did see with the three brands in it.   Unfortunately they waited until the end but they highlight three vehicles at the very end which are three of their electric and hybrid versions.  Unfortunately I don’t think those got enough air time because that is what I think is exciting.

How will all of this affect local dealers, at least the ones that are going to be left and what should radio and TV do locally to help their local dealers move inventory?  Is there any advice for those locally on the street that are approaching their local dealers?
The dealer body is the lifeblood of these companies and I know that they are being diminished. Frankly, in order for the company and those dealers to be successful it has to be diminished.  We have to be able to start to put through the same number of units through each of our dealerships as our successful counterparts in Toyota have done in the past.  My friend Jim Schroer [former Chrysler Group Executive Vice President of Global Sales and Marketing] who I worked with at both Ford and Chrysler where I call it the “Jim Schroer Economics” — if you look at the number of vehicles that Toyota puts through each dealership it’s 1,500 a year.  They have roughly 600 dealers if I’m not mistaken for Toyota and you’re looking at I think the last I heard that the GM with the four franchisees left are going to be down to about 4,000.  Well if the four divisions, if the 4,000 dealers that represent those four divisions were to put through the same number of vehicles per year that a Toyota dealer does then those 4,000 dealers would have to sell six million units.  That would be at least you know a good year, not this year or last year but in a decent year that would be a 50% market share.  I think we all know those days are gone. 

Even in the current plan for reduction I think that the dealers are at risk.  I think the company’s at risk and probably the dealers are at risk and no dealer wants to raise their hand necessarily and be the one that’s put out of business but if we’re going to be successful and have a thriving dealer base and have a thriving auto industry I think we have to have a much more sound approach to distribution and that means fewer dealers that can sell a lot more a year.  I guarantee you that any of the dealers that GM or Chrysler would be thrilled with 1,500 a year and we need those kinds of dealers. 

From a marketing standpoint that means for the people who are out there knocking on the doors is a couple of things.  One if you can get to those dealers that are going to be there for the long term so after Chrysler and GM have gone through and determined what their structure is moving forward I think it’s best to keep in mind that we’re going to need to find those that have the best potential for the greatest crew put in a dealership. Those dealers are likely going to spend a good deal of their money on their own advertising message.  They’re going to do some of the lifting that Detroit’s not doing for them these days and they’re going to want to put out what makes them different from a service and quality perspective.  They’re going to want to show the kind of price points that they have as well, I mean that’s what dealers do.  We’d say buy here on the FDAF [Ford Dealer Advertising Fund] or the dealer association level. We used to say buy here from us and then on the individual tier three level with the individual dealer it used to be buy here, from us now.  What those dealers are going to do is still that, it’s trying to get people into the marketplace right now not 60 days, not 90 days, that’s really what the national messaging is hopefully trying to get in the long term for people to consider. 

I think that there’s still a very good opportunity.  Dealers are very comfortable with radio in particular. Television, those that can afford it always have loved to do it.  There’s a visual aspect about selling cars that you can’t necessarily mimic in a lot of other different mediums and I’m very happy that a lot of dealers are going interactive.  That’s where a lot of the conversation is being had, that’s where leads are generated, that’s where you can really qualify customers and so I would also say to those who are out there pounding the pavement for radio and television, by the way I have great friends in there, that they need to be thinking about an interactive message and how they’re connecting the two.  It’s really in there that they’re able to start to measure the actual impact of that money spent and that messaging for the dealers.  Not that these guys are lazy by any stretch, but it’s not the time to be lazy and be just singular in their media.  I think they really have to bring it and they really need to be thinking about how they can that what they’re doing, i.e. they being the media side, is going to help impact their business objective both in the short and the long term and that means really upping their game because it’s a tough market out there and every alternative media opportunity is knocking on those doors.

Drive people to the website — whether it be the dealership and the station or both but that would be a good piece of advice.  Well, thanks very much Julie for again a great interview and good advice to our fellow broadcasters out there. 

See Part I here