Lessons From Detroit: Protecting Our Brands

We learned this week that Chrysler has filed for bankruptcy.

The U.S. auto industry is, as we all know, struggling to balance its place in American history with the realities of its modern day balance sheets. When making the cuts that are so necessary to survive, who should go? Buick? Cadillac? Mustang? These are some of our country’s most iconic brands and it is painful to say goodbye to any of them. Surely, Detroit has felt the same way, which is why they have shied away from the decision for decades, bringing us here. General Motors stood up and made the call last week, however, when they announced that they would be phasing out its 83-year-old Pontiac brand by 2010.

I am sad to see Pontiac go, to be sure as it is a brand that is so tied into the excitement and awe that the great cars of our youth brought us. Brian Williams of NBC Nightly News reminisced about the end of the road for Pontiac on a recent newscast in a poignant way that really captured what Pontiac meant as it so clearly tied into the American dreams of our youth.

All of this makes me wonder to myself: How can a great brand that means so much to so many just disappear?

There are some real lessons to be learned from American car makers’ struggles that can be applied to our industry as we raise our hospitality brands to survive and thrive. Here are some of them – learnings and take-aways plucked directly from GM/Pontiac’s mistakes:

Sub-Brands Can Be A Great Idea… Or Not So Much
We’ve all been in meetings where we’ve talked about the wisdom of launching sub-brands and/or second-tier brands that rely on the reputation of their flagships and take that message to a new demographic. “Diversify! Maximize! Leverage,” we shout! “It’s a great idea!” And it is, as long as we can temper our dreams of greatness with a little bit of moderation. Brands are like children, and they grow up to be really great as long as you have the time and money and wherewithal to invest uncompromisingly in their futures. Ignore a child for a year or two and expect him or her to end up in juvenile hall. It’s no different with a sub-brand. If you ignore it or fail to commit to it, expect it to under-deliver. And when it under-delivers, the only way to save it will be with major injections of time and money that will take attention away from your flagship brand. Suddenly, like GM, everyone’s in jeopardy. So, a word to the wise: extend your brand with moderation and discipline. 

Quality Really Is Important
So many hospitality brands – just like car brands – speak for themselves. They’re names that we’ve known and relied on for decades. But, when the rubber hits the road (pun intended) we really need to deliver on the brand promise that we make, and this is regardless of budget cuts and reduced capital expenditures. Our guest won’t cut us slack for our reduced operating budget and, therefore, accept fewer bell hops or slower roomservice or shabbier lobbies. They will just remember the broken brand promise and move on.

As with Pontiac, GM had lots of reasons – big, important, executive board-room reasons – as to why they watered down their brand and began delivering cars that were boring and conventional. But the customer didn’t take those reasons into account. They just moved on to a foreign model or another brand that lived up to their brand promise.

Embrace What Makes You Uniquely You
In other words, remember what your brand is and be ruthless in delivering it. All it took for American’s to fall out of love with Pontiac was the departure from exciting, romantic and unique cars like the Bonnevilles, Tempests and the LeMans to generic mid-sized cars like the Grand Prix that were almost indistinguishable from the competitive Ford and Buick sedans. Because the Pontiac brand wasn’t “building excitement,“ as it once did for Americans, buyers voted with their wallets and stopped buying. Every brand has a core DNA (Differentiators, Nuances, Attributes). Be true, be ruthlessly true, to that DNA in every new launch, in every overhaul, even in day-to-day service to secure your brand’s bright future. Want to know more about being uniquely you? Read Seth Godin’s The Purple Cow.