Category Archives: Re-Branding

Branding a Car Dealership –Ugh!

This will be the most negative blog I’ve written to date.

That’s because I can’t foresee a branding project that’s as hopeless as automotive dealerships.

We’ve all had our “war stories” concerning dealerships, whether on the sales floor or in a service department. I won’t bore you with my own – I’m sure they’re similar to your own. They all center upon the fact that the dealer is out to get as much from your wallet as he/she possibly can without regard to customer satisfaction or long-term relationships.

Now I know Saturn dealerships and one or two other dealers in the Denver metro area proclaim to be “different”. But I don’t believe it. And that’s where the rubber meets the road – customer perceptions. We’ve come to believe an auto dealership is the place you go to get screwed.

That’s why I’m going to use a car buying service the next time I shop for a new car. That’s why those customer-oriented businesses are gaining such popularity and success.

So how would I, as a branding professional, advise a car dealer? Well, I probably would turn down the opportunity except that our assignment this month as a member of the BrandingWire posse is to advise a generic dealership on branding.

Here’s the problem: the dealership that wants a “brand” that helps them get people into the dealership so they can be fleeced won’t last too long. Word of mouth, Internet rating services and blogs, BBB and other consumer advocate groups will soon expose their true nature. (You won’t see too many derogatory news reports because radio, TV and newspapers make a lot of money from dealer advertising.) Yes, I am cynical.

Dealers need a new way of thinking

A successful new agency brand must start with a new way of thinking about running a dealership. The owner must embrace a new business model based upon customer satisfaction, honesty, ethics and a long-range view of success.

This will take guts. Even though customers and prospects hate the old business model, it has up ‘til now been successful for most dealers. High-pressure, don’t let the prospect leave the showroom without a car mentality still works. Selling high-priced financing and insurance is still profitable.

Also, the car makers have high expectations and training programs based on the traditional model. And car salespersons, by and large, are single-minded in making a sale because of the commission/compensation plans they are presented. Another factor is the perception that car salespersons are only interested in money and possible recreational drugs. Now that’s a perception and not necessarily a fact or even an educated observation. But perceptions drive customer activities just as frequently as facts and expert opinions.

We all know any business wishing to establish a successful brand will need to have a brand champion in the CEO’s chair, and that the brand must be communicated and absorbed by each and every employee. Everyone on the payroll is an ambassador of the business and must personify the brand. Then, it’s making your vision, your value statement and your code of conduct foremost in all dealership activities.

It’s in these areas that a dealer needs to differentiate the business. Assuming these activities are customer-driven and based on a true desire to serve a market, there’s a chance to establish credibility over time. I’d say it’s worth exploring.

Some specific branding suggestions

Okay, let’s assume a dealer has adopted and instilled a code of conduct and in-store practices to differentiate itself from the ordinary car dealership. Now what?

Here are a few suggestions. Avoid the temptation of the owner, or a close relative of the owner, becoming the spokesperson for the franchise. I would hire a spokesperson full time. But this person will be an ombudsman (or woman) expressing customer concerns and explaining how the dealership avoids or eliminates the problems customer usually face in dealership experiences.

Next, I would make sure I did not shout at people through my radio, TV or print ads. I’d establish a strong individual graphic presence, but it would be a graphic identity that’s warm and understated. My ads would feature auto-buying hints, safety and teen driving tips, how-to articles about insurance, financing, maintenance and acquisition options. Yes, I’ll feature cars and special incentive programs and sales, but each ad would have an educational element as well.

I’d adopt a tagline that might be constructed as a challenge. “We’re on your side” might be the theme. But it will take time for that or any other theme to gain credibility. So expect this to be a long-range, relationship building experience.

One other thing: I’d become a major and visible community source of contributions in the form of cash, and more importantly, in people giving of their time and knowledge for everything from Scouts and Junior Achievement to runs for a cause and crisis relief. I’d contribute cars for student driver education. I’d help schools fund manual arts programs. I’d become a “soft touch” for one-time charitable activities.

Get prepared for a long period of relationship-building

In summary, I’d make my agency as human and warm as possible by adopting a low-key approach to promotion, by hiring and training compassionate people, by giving to the community, and by being patient.

I may be naïve in my recommendations. Car dealers will follow their tried and true methods as long as they work. But I’m afraid that old model will change as one, then another, and another dealer find the old way no longer meets their expectations, their auto maker partner’s expectations, and most important of all, their customer’s expectations.  

Now, please go to the BrandingWire to read what the other members of the BrandingWire posse have written about auto dealership branding. If I know this bunch, you’ll find new perspectives, challenging ideas and well-formed opinions that branders in general and car dealers in particular will find helpful.

Martin Jelsema
303-242-5975

How will Murdoch Affect the WSJ Brand?

Today’s news: Rupert Murdoch is about to acquire Dow-Jones and the Wall Street Journal. He claims there won’t be any change in the editorial approach or content for the WSJ.

OK, I take him at his word.

But in the minds of readers and observers, will the Journal lose credibility just because of the association with Murdoch and his New York Post approach to sensational “journalism”? How can two such disparate publications reside in the same house?

This is why mergers and acquisitions raise such havoc with the brands of the combined organizations, particularly when there’s a leader with a branded personality all his own.

The portfolio components get blurred and superseded by the leader’s brand.

The individual brands have a problem maintaining their brand identity no matter how strong that brand was when standing on its own. They tend to become associated with each other and with the parent.

We’ve all observed respected brands diluted, absorbed and/or deleted from a company’s portfolio after they have been acquired by a company that’s not invested in the brand’s uniqueness. Look to Nabisco and Kraft for instance.

I have no answers that will allow strong brands to reside side-by-side within a combined organization coming from different cultures, serving different markets and advocating different values. If it’s possible, I’d keep the component organizations as far apart as possible in every aspect of their activities. I’d not emphasize any connections. I’d attempt to disassociate my name (i.e. Murdoch’s) from the Journal. I’d bend over backwards to maintain the independent editorial practices of the Journal.

The Murdoch empire – splashy tabloids, Fox News and the Simpsons – just doesn’t align with the Wall Street Journal. Only time – and profitability – will tell if the WSJ brand can maintain its clear and respected identity in the house of Murdoch.  

Let’s hope Murdoch has the insight, expertise and patience to make this seeming mismatch work so the Journal does not diminish in credibility or in brand identification.

Martin Jelsema
303-242-5975

When should you perform a brand audit?

There are several situations that require a brand manager to review and reevaluate the brand. Quite often this is an activity dictated by an unexpected event or circumstance which intuitively calls for the review. These often occur because of competitive activity, particularly when inytroducing a technologically superior product. The event may also be something as “trivial” as a critic’s product review.

Yet there are some more predictable situations where your brand management people should perform this review, also called a brand audit. Ideally, brand audits will be scheduled annually and receive as much attention as the brand plan. But if not, they should be reviewed when any of the following situations occur:

When contemplating a decision to enter a new market or product category in which you have not as yet established a position.

When assessing the pros and cons of extending a brand into a new product category or developing a new brand for that category.

When determining whether to sub-brand or utilize a corporate brand – and to assess the balance between the two.

When a brand’s market share is slipping or is not meeting realistic expectations because of competitive activity.

When considering the establishment of a new product category in which your brand will be the first participant.

When you are not certain of your brand’s position, strength or effectiveness in relation to competitive offerings.

When it’s time to establish a cohesive branding plan, and implement it through the creation of relevant branding elements: name, positioning statement, logo, packaging, graphic standards, associations, events, etc.

On my Signature Strategies website, I’ve outlined the elements of a complete brand audit. Just click on the name Signature Strategies to review and print out this doc.

Martin Jelsema
303-242-5975

Power 150: ranked 118

One last blog on the rebranding of AutoNation

Just because they’re introducing a new approach to presenting price/tradein/financing options to a buyer doesn’t seem to be a compelling reason to change the name of the business. There’s a host of expense and planning required to change the name (and probably some trade dress as well) for over 250 dealerships.
No, I suspect AutoNation felt their reputation was in some way tarnished and that a name change could change the reigning perceptions and boost sales and profits.

I don’t think that strategy works very well. Old brands tend to linger, particularly with folks who have had disappointing experiences with the dealership. Every time they drive by a location in which they’ve had a problem, that memory comes back no matter that a new sign bedecks the facade. And a bad experience at one shop lingers for the other shops bearing the same name.

I believe most people think a business that’s re-branding itself is doing so because it wants to rid itself of a bad reputation. I also believe people believe that only the name’s been changed. That applies also to businesses that have been sold and now “under new management”. Do we really believe anything’s changed? I expect the old reputation lingers, sometimes for years.

So what could AutoNation have done to redeem its reputation and sales volume? The best strategy I believe is to “fess up”. Admit their business practices were not “customer friendly”, that their people were not encouraged to be customer advocates. In short, be honest and candid. Demonstrate through this action that they have now adopted a new way of doing business.

The publicity alone would be invaluable.

So often a name change is a cover up. But if the elephant is still in the room, elephant shit is sure to follow.

Martin Jelsema
303-242-5975

Elway retains his good name

As reported earlier, AutoNation and John Elway are parting company in the Denver market.

In that blog I speculated that Mr. Elway probably wanted more than AutoNation was prepared to pay to license the 17 dealerships they own that carry the marque name of Elway.

Seems the real story is a little different: Elway wanted to again be a dealership owner in his own right, and of course, he wanted to use his own name. So now that his original contract with AutoNation expired, he grabbed the opportunity.

Perhaps AutoNation would have renamed the Denver dealerships “GO” as they are in the process of doing nationwide. (I would have opted for keeping the Elway name if it was at all possible.)

But this brings up another issue for all branders who enter license agreements – whether for a name, the use of a song, the voice or image of a celebrity spokesperson: what happens when the contract expires?

That’s something a brand owner should consider when making the original offer. But just considering it is not enough. Utilizing a current fad celeb, and there are four or five on every TV screen in that category, may be problematic in four areas:

First, their popularity may be fleeting and you’ll end up with a dated brand in a year or two.

Second, they may pull some stunt – either drunk, high or just emotionally charged – that could tarnish the image.

Third, the celebrity may not renew, or ask more than the brander is willing to pay at the time of renegotiation, and thus the need to establish a new communication program which can cause a “disconnect” from the previous communications.

Fourth, the celebrity can “overpower” the brand, making the communications more of about him or her than the product and its attributes.

My thought that a brand should be differentiated in a relevant way through customer benefits, a company’s social responsibility, their service policies and distribution channels, the use of images and memes that convey a real promise.

Sacking John Elway: the brand not the man

Here in Denver, Colorado, we have a sports hero/legend who’s still revered by Bronco fans: John Elway. During his playing career, he purchased several auto dealerships and appended a new brand to each: John Elway Toyota, John Elway Chevrolet, etc..John Elway logo

In 1997, Republic Industries purchased the Elway franchise, and in 1999 as AutoNation, purchased another 16 dealerships in the market and co-branded them John Elway/AutoNation. Not long after that, the AutoNation logo took a secondary role to the Elway name.

Friday, AutoNation announced it will not renew its contract with Mr. John Elway, and what’s more, will re-brand its nation-wide dealership network with a new name: GO

My head swirls with ideas and opinions about this move. I’m sure AutoNation management, their branding consultants, consumer researchers and legal councel had many heated conferences before the decision(s) was made. Without being privy to sales trends, customer satisfaction research or financial considerations, my opinions can only reflect my experience in dissimilar situations, I’ve never had an auto dealer account. That said…

Assuming customer satisfaction scores were at least average for this market and that Elway did not price himself out of the market while negotiating a new contract with AutoNation, I suggest the John Elway name has a lot of equity in this market and shouldn’t be replaced. I wouldn’t care what goes on in other markets, in Colorado and environs, there’s still plenty of respect, bordering on awe, for this Hall-of-Fame QB.
I suspect on a national level, the real reason for rebranding AutoNation has to do with poor customer satisfaction and lower sales in relation to other dealerships in the markets they serve. Unless there are other mitigating circumstances, AutoNation is a pretty good name. Based on most accepted criteria a fine name, in fact. I know it was a name I resonated with the first time I heard it. I remember the name, I like the name.AutoNation logo

Here’s my take: It will be a very costly process to re-brand 272 dealerships over the next two years. There must be a lot of mistrust and bad buzz for this company to make such an investment. AutoNation has also stated they are going for a different experience on the sales floor – providing a single sheet with their best price, their trade-in allowance and their financing proposal so the traditional shopping experience will be more pleasant. But do you need to rebrand while introducing a “Saturn-like” sales experience? Let’s just say, on the strength of there public statement, I’d say no. A resounding no in fact.

Now for the last issue: the new name for AutoNation: GO. Yes, it’s short, memorable and even “catchy”. But I don’t seeing it in any way representing the company’s new effort to make buying a car less intimidating. I don’t see the name becoming a rallying flag for the “new AutoNation”. It’s a name that could fit just about any company, but few companies with relevance or credibility.

So that’s my take. I’d sure like to hear from you if you have an opinion one way or another on this move or about re-branding as a subject.

Martin Jelsema
303-242-5975