Why did your customers choose you in the first place?ByRaymond D. Matkowsky
For much of its 116 year history, Cadillac defined luxury. However, in recent years it has lost much of that shine. Cadillac’s market share and reputation has dropped. This year General Motors (GM), for the eighth time in two decades is revamping the nameplate.
GM wants to attract the millennial to Cadillac. In doing so they are turning their backs on the seniors that have been the mainstay of the model. GM used to hold Cadillac out to the public as an award earned after years of hard work. By going after the millennial, they are essentially abandoning this marketing lure.
Although older people continue to be the major purchasers of the brand, many have left. The model has been losing buyers since the 1980s. In 2014, the brand had a 10% share of the luxury market. This is lower than it was in 1980. It now has dropped to 8%. In the past it has not been able to attract the millennial and it may not be able to do so this time around either because the reasons haven’t changed.
In the coming year, GM will introduce the XT4. The car will sell for about $35,000. It will cost about $50,000 equipped with the most popular options. Most millennial cannot afford it. With starting a family, student loans, and buying a house, they do not have the financial resources to do so.
Also, in order to keep costs low, GM has resorted to cutting corners. As an example, most luxury brands use real wood trim in their interiors. So does Cadillac. However, Cadillac uses less and when they do, it is usually narrower than with the competition. Customers notice!
I was a GM buyer for many years. Like many people, I would work my way up to the luxury car market. In the 2000s, when it came time to buy the top of the line, I switched to the Lincoln-Mercury division (now known as the Lincoln Motor Company) of Ford. I did so because Cadillac no longer offered what I wanted, what I expected, and what I demanded of a luxury car.
Again, I am not alone because many seniors have left GM brands. They raise the question, Where is the luxury? Cadillac actually sells more cars in China than the United States. Why? There are many theories. The one that I subscribe to is that Cadillac in China is considered a step up. In the U.S., by comparison with the past, it is considered a step down.
My point here is not to criticize GM. There are probably many factors that I am not aware of. The point that I want to make to my readers is not to forget the reasons why your customers chose you in the first place. Cadillac has forgotten them and they are paying with hemorrhaging market share. This is not to say that you shouldn’t try to capture a new market, but do it in a manner that doesn’t upset your existing customers.
If you have any further suggestions, do not keep it to yourself. Help your fellow readers!
If you have any questions, comments or suggestions drop me a line at rdm@datastats.com.
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