Much Ado About Chrysler - George Murphey interview examines Chrysler Group marketing strategies and plans - Company Profile - Statistical Data Included

Brandweek, April 9, 2001 by Karl Greenberg

In the auto business, dealers call us "factory" and we call them dealers. But they are really our retail arm. Unfortunately there's quite a bit of debate about what's our responsibility, what's theirs, who owns the customer. It's a crazy debate. We ought to have one face to the customer. Whatever that face is, it ought to be shown by us and the dealer together.

Another big difference [with GE] is that while people aren't emotional about buying a lightbulb, there are few products out there with as much emotional value attached to them as cars. I think in the end, that's the hook you need to build loyalty.

BW: What did you learn about customer loyalty that you can bring to cars? Why is loyalty so poor in this business?

Murphy: When I was in the lighting business, the purchase loyalty of a GE light-bulb was 80%. Purchase loyalty to a vehicle--commodity, or mass brands--is more like below 50%. That's nameplate loyalty. Corporate loyalty, if you're lucky, you're in the 60s. Which are awful numbers ... there are basically [one million] people a year that each of us loses.

[Loyalty comes down to] three things. One is great products, which doesn't mean every vehicle has to be a home run PT Cruiser. It means delivering to the customer what the brand said the product would deliver. For example, you get into trouble when you get into one platform with two body styles. Consumers aren't stupid, and badge engineering is something that won't work anymore. You can't re-badge a car, run it through a different distribution network and not confuse the consumer. The market won't allow that now. We have to get the product side more tightly defined around what the brands are.

Second, you have to treat people right in the service and sales experience; even if you bought this vehicle and it's exactly what you wanted, and you went to the dealership and felt ripped off, or you went to your service call and couldn't get it scheduled, or the bill came out wrong. [That's] the gist of our 5 Star program; 55% of our dealers and 77% of our volume are 5 Star.

Third, communication. There's no relationship between brands and customers. If there is one, it's between the dealership and the customer, so we're not bringing the full power of the brand relationship. I don't mean inundating customers with mailers they throw in the trash. I mean, as an industry, we need to figure out how we should dialogue with them on a technical, branded, event-driven, issue-resolution basis. The only level we talked to customers was warranties and complaints. This mindset of going out to the field, doing clinics, spending time at drive events ... these are not revolutionary, but culturally--never mind that the processes aren't set up--it's a whole different mindset.

BW: How about incentives? Chrysler, like most automakers, is no stranger to using incentives to sustain sales.

Murphy: I'd much rather spend the money retaining and delighting our current customers than putting out incentives. The problem with incentives is you have to put them everywhere, [and] you can't identify the group you just lost. You get into incentive battles because none of us have retained the customers, quite frankly, we should retain.