The Saturn Story

“A different kind of company, a different kind of car” was Saturn's original advertising slogan. A lot has been written about Saturn, which was one of the rising stars of the car business until General Motors starved it of new product. Going back to the beginning, what exactly did Hal Riney & Partners mean when they wrote this line?

As GM began to lose serious market share to the Japanese, it embarked on an odyssey to build a brand that could fight the Japanese successfully in the small-car market. GM did not believe it was possible to do that with any of its existing brands. The company invested billions of dollars, built a new plant in faraway Spring Hill, TN, and got the United Auto Workers to agree to an innovative new labor contract. Then it took years to get to market and, in the end, produced some remarkably ordinary cars.

Yet Saturn was a resounding success. Why? Because as the company attempted to rewrite the rules on building a small domestic car, it took a hard look at the entire ball game — how to engineer a car, how to build a car, and how to sell a car.

Saturn and its newly minted dealer body gave themselves permission to dissect the methods by which cars were being sold at the time. It was not a pretty autopsy. Customers, in the main, hated the buying experience and hated the service experience. This insight was hardly groundbreaking, but their drive to change things was. They understood the market, and they knew the customers they were targeting. They knew that most customers did not like to haggle on price and still wind up feeling as if they had been hosed down like a muddy pickup truck.

Saturn steeped its sales force in product knowledge and paid them a flat fee for the sale of each car — not a commission based on how much they could squeeze out of each hapless customer. In a burst of marketing genius, Saturn did not send its early prototypes to the scrap-yard crusher. Instead, it made cutaway display cars like those seen at auto shows and placed them in dealerships.

Then Saturn took the delivery process to a new level. With precious few exceptions, most dealers were no better at delivering a car to a customer than the counterperson who hands you a Big Mac and mumbles something about having a nice day. Virtually everyone did little more than hand customers a set of keys and wish them good luck. Maybe the car contained enough fuel to get to the Exxon station, maybe it didn't.

Saturn made its retail buying experience less like slaughtering cattle and more like a celebration. Before delivery, every car was thoroughly inspected, cleaned, and topped off with gas. Then, when customers picked up their new Saturn, all salespersons were invited to join the buyer in the dealership's separate delivery room. There they cheered and shouted congratulations as the buyer had a picture taken standing next to the new car. Customers loved the experience and couldn't wait to tell their friends about it.

Saturn also tackled the service process through technology and hospitality. Each dealership had to have its own IBM AS400 computer that was online with the Saturn mainframes. When a customer brought a car in for service, its Vehicle Identification Number would be entered in the system, causing all previous maintenance and recall work performed — no matter at which dealership — to show up on the screen. That provided the service writer with more information and maintenance history than was available at any other brand's dealership. If this was the second time for a repair, the service writer could discuss that with the customer and work hard to ensure that they fixed the problem this time, thereby pleasing the customer and avoiding expensive lemon-law problems. The service departments could also use the AS400 to download revised software to the computers on board the car.

The dealerships didn't stop there. They offered doughnuts and coffee to all their customers. Saturn was not the first company to think of this, but they executed it smartly and in every store. Saturn insisted; it did not rely on local dealers doing it only if they thought it was smart or felt like it.

Saturn's secret to success was a fresh perspective on the market, how it worked, its shortcomings, and what their customers truly wanted. The company looked at the same old bad habits that everyone else saw, but it used a different eye, one focused on the changes needed to find a better way for its customers. Saturn had the courage — and it took real courage — to attack bad sales and service that had been defended for decades by the nation's car dealers. Nissan, Toyota, Honda and many others have yet to effectively address these issues.

The Saturn brand was created by a leadership group convinced that, to compete against the Japanese, they had to build a stand-alone company independent of mainstream General Motors management and processes. Isn't it ironic that at the same time, GM was stripping its traditional brands of their autonomy and distinctiveness? History is whispering, none too softly, that GM identified the right problem but applied the wrong fix.

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This piece is excerpted from“Branding Iron,” by Charlie Hughes and William Jeanes. It will be published this month by Racom Communications (www.racombooks.com).