The information deluge in which we are all
immersed causes certain terms to become so overused they lose focus. Some words first
sweep into the lexicon of strategic consultants as a way to simplify a complex thought.
The terms then move into boardroom presentations, from there into publications and
ultimately they floodplain into everyday discussions.
“Paradigm shift,”
“re-engineering,” “lean production” and “customer driven”
all had their time in the vocabulary of entrepreneurs working to build businesses. Now
each of those terms is considered overused or at least unoriginal because of that overuse
(and excessive misuse).
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The automotive industry also has its share
of terms that have been abused by excess, even though they continue to be used in 1999.
It’s worth a quick look at several of these before they, too, are laid to rest in the
word graveyard. Each phrase long ago served its purpose. Now unfocused, but still
repeated, these phrases leave more misunderstanding than clarity in their wake.
Looking at the Lingo
The first is “retail revolution.”
How can revolution take place when the industry continues to incentivize behavior that
prevents the very change revolution implies? With incentives of all types topping $2,000
per new vehicle retailed in the U.S. in 1998-and the level of vehicle inventories dipping
only because of UAW strikes-retail process changes have hardly been revolutionary. The
pressure for change continues to build. Change will not be accelerated, however, by
repeating a mantra of revolution while dealerships continue to depend on the welfare
payments created by incentive pricing. Customers demand value, not revolutions.
Another overused term is “scale
economies,” as in “…the search for scale economies.” Wall Street
continues to wait for the increased efficiency of larger and larger chains as if facility
count matters most. All dealership retail owners know that savings in advertising, bricks
and mortar and even infrastructure are marginal compared to the leverage of people
productivity. With personnel remaining the single largest expense in dealerships of all
size, the shift toward training and learning will eventually bury this term that implies
the physical dealership more than the human creativity.
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By GlobalDataHas any term been more used and less
understood by the automotive industry than “brand management?” Setting aside the
obvious fact that little agreement exists on what the actual brand is within a model line
or distribution channel, this single term has come to define the final automotive decade
of the 21st century. Billions have been spent in its name on product promises, “share
of shout” and customer dialogue. The collective head and heart of the industry knows
that the product matters more to customers than shout. But like nuclear disarmament,
everyone continues “branding” campaigns. This term will be replaced with
“marquee management” or channel management because of the growing inefficiency
of the current programs. Brands may be immortal as promised only if they are not reduced
to expensive disconnected sounds bites undifferentiated from other noise in the media.
Value is both emotional and practical and
ultimately delivered by people, not airways.
Who Invented the Internet?
Even if Vice President Al Gore didn’t
invent the Internet, does it really have the near-religious status said or implied by
commentators? If the Internet will change the world, then it is clear that the automotive
industry will change also. Surely someone in the industry has concluded “what is good
for the Internet is good for General Motors.”
The truth seems to be that this term has
personal meaning to increasing millions of consumers including dealership owners and their
employees. Because of the near mystical status already granted the Internet, new terms
such as e-commerce and e-retail are emerging. These new phrases will bring the aura of
Internet into the realm of utility and appliance.
Once it is merely a tool for retailers,
their employees and their customers, some of the “humanware” creativity of the
Internet will unlock ways for dealerships to build value and delight for vehicle buyers.
Relating to Consumers
Finally, what better example of widespread
misuse is there than the term “relationship management?” (When is the last time
you tried to manage a spouse or significant other?)
As it’s now used, the phrase implies
that consumers want to be managed. That may be the primary reason the term fades from
general use by automotive executives. Individual lifestyles and life stages can be
documented and used with respect and confidentiality to help consumers find inherent value
in their ownership search and experience.
But this will require cooperation and
participation of “unmanageable” consumers who will relate on their own terms. In
effect, they will change the very industry that is trying to manage them.
The common theme is evident: people and
their relationships are more important to the way the industry will change than words that
merely imply change. Phrases often miss the creative power and adaptability of the very
audience that repeatedly hears them.
Next time you are assailed by such phrases,
take solace knowing that adaptive people are the creative solvers of complex problems that
can’t be condensed into short, oft-repeated phrases.
J. Ferron is the Automotive Theater Leader
at PricewaterhouseCoopers.
