Cadillac was once so strong as a brand that it became an adjective for best-in-class. Today it has a brand problem. Too many of its drivers are old and will soon age out of the car-buying market. Over recent decades, German brands have trumped Cadillac on prestige in the traditional engine market, and Tesla is winning the electric market. (Audi is fast following into electric cars.)
Cadillac tried a reboot in the past, through advertising and moving the headquarters to Soho, NYC. However, that did little in an age of transparency when actions define a brand, not spin. The top-of-the-line GM brand began a more genuine reboot in 2018 when it moved headquarters back to its roots, Detroit, and appointed a veteran engineer as president of the brand.
The brand is building for the long term, according to a recent NYT article, but let me share some lessons to date.
If you don’t change the product, you can’t change the brand
Brands have many levels. At the base are functional benefits that emerge from the features of the offering: Whole Foods built its brand by offering more organic and local options. Another level is the brand’s emotional benefits: Harley Davidson created an “I feel like the real deal” authentic motorcycle experience from its look, sound, and dealerships. The combination led to a price-premium. Then there’s brand personality: Porsche is powerful, Victoria Secret, sexy. Finally, great brands have a compelling overall purpose or aspiration. One is helping the world: buy Tom’s shoes, and you benefit a shoeless person with a free pair. Ads may affect the emotional, personality, and aspiration of a brand—but if the base level of features and functional benefits don’t change, forget it. Consumers will know that you’re only changing the icing and not the cake.
Don’t try to beat the leaders at their own game
Instead, find a significant advantage. There is little hope that Cadillac would ever displace German brands’ at their craft and the prestige it garners. Since Cadillac’s founding, its strength has been in design, not workmanship. (Remember those sexy fins?) The strategy has shifted just recently beyond design: a new addition to their cars is a best-in-class cruise control system called “Super Cruise.” The innovation adds safety and comfort advantages; Cadillac hopes that is enough to attract buyers while it scrambles to catch up on design. Super Cruise is the only system on the market that monitors the driver’s eye position. The driver’s eyes must focus on the road for the hands-free option to operate.
Focus on your core customer
Cadillac is smart to move beyond its current demographic that mainly consists of the 55+ age group; its new cars have helped to accomplish that. However, what truly defines the core loyal Cadillac customer is a love of American automobiles and brands. It is no accident that Cadillac sales in China, where American brands have an edge, have supported the company’s finances.
Go where the market is moving, not where it is
Changes take time, always more time than you think. Cadillac missed the SUV market, relying more on a car-based chassis. It is just now catching up, finally adding two new traditional-engine SUVs and an electric car to its line.
Be patient and in a hurry
Rebranding, like culture change, does not happen overnight. You must keep investing if you see signs of light (e.g., younger customers at the dealership) even if the turnaround is not showing up in the bottom line. At the same time, you must fix processes that are slowing down your transformation. In Cadillac’s case, it is rolling out its cruise control innovation too slowly across its most popular cars. Slow speed is a risk in a market that is undergoing dramatic change. Cadillac’s line will be 100% electric in 6 to 10 years. That timing could be too late as Audi and Tesla are way ahead.
Should Cadillac be too late with its electrics, we learn yet another business model lesson – a “B” strategy executed quickly and effectively usually beats an “A” strategy executed slowly.