GM Employee Discount For Everyone
by Adrian Hanft, (9 comments)
You may remember I am a Toyota person. Don’t worry, I haven’t changed teams. Actually, my dad worked for General Motors for a while when I was growing up and my ears still perk up when I hear GM mentioned in the news. It has been nothing but bad news lately. Losing market share, cutting 25,000 jobs, and junk bond status have all colored the company recently. When I saw their new commercials proclaiming an “Employee discount for everyone,” I was skeptical. Reading between the lines, I assumed it really meant “We can’t afford to give our employees a discount anymore, and we are passing the savings on to you.” Surely the public wouldn’t be hooked by that promotion. Well, I was wrong. GM just had their best month since 2001, and the employee discount promotion is getting the credit. Good news for GM, I just hope their success doesn’t mean other companies will copy this promotion. I am tired of employee discounts for everybody already. Do you like the commercials? Was it designed better than I think? It is pretty impressive that they can overcome all the negative press with just an advertising campaign.
Comments (9)
Michael Dogan said:
I don’t think it was a so much a campaign intended to steer the behemoth back on track as much as it was the standard fair being pumped out by the marketing team. It just happened to hit enough hot buttons that the campaign did really well.
I know it sounded skeptical to me at first, but it’s like most brand-new campaigns: the idea is wholly left intact “provide customers with the same employee discount that we give our own.” If they can keep it untarnished by not polluting the campaign with more and more ‘legal stuff’ each time they roll it (assuming they do this campaign multiple times), then they’ll truly have something. Because, of course you know, telling your customers that they’re going to receive the same discount as employees is unimaginable, inconceivable to John Doe. So it is a major hot button. Of course, the graphic designers did a good job communicating it. I like the girl in the ad who says “You pay, what we pay.” Pure and simple — the message is communicated.
I love it!
Posted on July 4, 2005
christopher said:
A couple of comments.
I’m skeptical that it’s the “real” employee discount. My grandfather worked for Pontiac, so I too get the employee discount. (Children, Grandchildren and Spouses were eligible for the employee discount as well.) The discount is eaten at the corporate headquarters and doesn’t come out of the commission. (My parents bought a Saab a year ago and got the discount. And the dealer could have cared less about.) Word up in Detroit though is that the dealers are not happy about this employee discount program. I’d say that means there is some cost sharing that isn’t normal to process and it’s coming out of the dealers pocketbooks.
GM loses over a thousand dollars on each U.S. car it sells. So now they are losing more? This reminds me of an old SNL or Monty Python skit about losing money on each but making it up in volume. It’s basically impossible. So I guess marketshare will increase, and it gets people into the dealerships, but the money will still bleed here for awhile.
I could go on about this but won’t.
Posted on July 5, 2005
Ed the Chevy Guy said:
And if I throw the original invoice on the desk this guy will say: “I’m skeptical that this is the “real” dealer invoice.
As for this specific program, the factory is still making money on each unit but, more importantly, is clearing lots for ‘06 models without having to cut their production.
For them it’s “win/win”. For us it’s work twice as hard and absorb twice as much brain damage for less money.
For the customer it’s truly an unprecedented great deal — believe it or not!
Posted on July 6, 2005
Adrian said:
It looks like the trend is catching on. Ford announced they will match the employee discount program of GM. I heard some commentary that said this is going to do more harm than good to American car manufacturers. They said that once the prices drop so low, they won’t be able to raise them to the level that they were before. I wonder if foreign car manufacturers will get on the bandwagon. I also heard that some non-car companies are going to start employeed discount incentives…
Posted on July 7, 2005
Ed the Chevy Guy said:
…and what about the glut of trade-ins and the impact that they will have on the used car market?
My dealership’s new vehicle inventory was cut by approximately 50% in June but our used vehicle inventory increased by the same percentage. Plus, we’re now short of ‘05’s with which to continue the Employee Discount Program with.
Posted on July 7, 2005
JonSel said:
I’ve wondered whether this does long-term harm to their brands or not. On one hand, it’s getting a lot more people into their cars, which could translate into bigger future sales if these customers become loyal. On the other hand, price wars almost always do long-term brand damage, as they remove emotion from the purchasing equation. I don’t see cars becoming commodity items like coffee anytime soon, so this probably isn’t such a big deal. It’s possible the airlines didn’t think it was a big deal either, but we can see the state of that industry.
Posted on July 7, 2005
Bennett said:
Adrian, Were you listening to Market Place as well? It sounds like Chrysler is going to be the next to follow suit. One of the other comments on Market Place was that deals like this are destroying their brands. I would have to agree.
When I first saw this promotion for GM I noticed the Saturn logo lumped in with all of the rest of the GM brands. It is sad to see Saturn’s entire brand (i.e. one price, no haggle) thrown out the window for one stupid promotion.
Posted on July 7, 2005
Adrian said:
Bennett, Yeah I think I must have caught part of the same broadcast as you. I thought they named some other non-car companies that were going to offer employee discounts. Do you remember? Maybe that was somewhere else, I am not sure.
Posted on July 7, 2005
Adrian said:
For anyone not completely convinced that the “discount for everyone” promotion was a bad idea, maybe you can agree that their new promotion stinks. Fool.com. reports that GM’s next gimmick is a $500 gas card with every gas guzzler they sell.
We had an RV dealer client last week who was considering a gas card promotion. He rightly decided that it wasn’t a good idea to bring the gas issue to the consumer’s attention right now. Than again, maybe I am wrong. It isn’t like the consumer doesn’t know that it is going to cost a fortune to fuel an SUV or RV. If you really want an RV or an SUV, maybe relief from gas costs would seal the deal.
Posted on October 17, 2005