GM’s Saturn is scrapped: Why did customer-centricity fail?

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One time or another, we’ve all complained about cars and the car buying process. Why can’t American car companies compete better?

GM tried with Saturn. They implemented a friendlier, no-hassle buying process, improved quality, got management and employees working together and worked hard to build loyal customers.

So much for good intentions, as Saturn heads to the junkyard. The car designed to compete with Japanese imports will shut down, which will result in 13,000 lost jobs.

Why didn’t GM’s customer-centric approach with Saturn work? What went wrong?

3 COMMENTS

  1. Dick Lee: Bob – what a great question. And what a great example of how inside-out behavior undercuts Outside-In intentions.

    Fixed (no negotiation) pricing was only half Saturn’s original customer-centric premise. The other half was cars you could drive off the lot and keep on driving past repair shops.

    Unfortunately, the inside-out, GM-first culture robbed Saturn of it’s freedom to resource quality components outside GM as fast as you could say, “GM.” Hence, Saturn cars became just more GM buckets of bolts.

    As typically happens, customers regarded half-met customer expectations as unmet expectations, which sullied the Saturn brand. Not having to negotiate prices was no offset for what organizations like Consumers Union rated crap cars.

    As David Mangen and I identified in our 2006 research, customers won’t separate service quality from product quality. Either you have both or you have neither.

  2. Wow, “As David Mangen and [Dick Lee] identified in our 2006 research, customers won’t separate service quality from product quality. Either you have both or you have neither.”

    That is worth repeating for all “product people”. So often, 90% of attention is on getting the product right. But really need to pay attention 100% to the “big P”, i.e. p+service. Easier said than done.

  3. An issue with Saturn I remember from a past article: the company offered great introductory “value-priced” cars, but no upgrade path for satisfied owners. “After college, my first car was a Saturn. I have a real job now, so I bought a Nissan!”

    When GM recognized Saturn’s product suite was a virtual dead-end for consumers, they initiated building larger, beefier Saturn models. By then it was too late. Current Saturn owners weren’t interested, and few non-owners wanted to cross over from other vehicles into the Saturn line because of Saturn’s “downscale image.”

    Despite the brand’s admirable effort to shed GM’s bureaucracy, Saturn will be studied for many years for a combination of marketing, manufacturing, and product management errors.

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