Detroit doesn't need another ad campaign

SO, A HYDRA-HEADED FEDERAL TASK FORCE headed by a couple of noted economists -- Treasury Secretary Timothy Geithner and White House economic adviser Lawrence Summers -- will try to guide the rescue of the American auto industry. The group will be advised by officials from the treasury, labor, transportation, commerce and energy departments, as well as from the National Economic Council, the White House Office of Energy and Environment, the Council of Economic Advisers and the Environmental Protection Agency. That's quite a collection of experts. But I'd feel better if just one of them knew how to sell cars. The mess in Detroit isn't primarily a manufacturing problem, a management problem, or a wage and expense problem. Tougher managers and more tightfisted bean counters aren't going to fix what's broken in Detroit. It will take deep and innovative marketing knowledge.

The American auto industry needs leaders who understand how to create differentiated brands and make them relevant to evolving consumer segments in a rapidly changing media environment.

I'm not talking about cheap barkers, using gimmicks to lure suckers into the carnival tent. I'm talking about providing this keystone American industry with leadership that knows where customers are now and where they're going next.

The old model of marketing cars is broken. For 50 years, Detroit has simply saturated the media with advertising. Some jingles, a few beauty shots of cars on winding mountain roads and a huge spend to slam the ad into millions of eyeballs thousands of times. That's building something and then pushing to create a market. And that approach has sunk. Like a rock.

If we're going to pour billions of taxpayer dollars into the car companies, why not ensure that they adopt a new marketing approach? Perhaps Detroit could learn from the customer sense and marketing savvy of Netflix. Netflix realized that people didn't like going to the video store, and that they definitely didn't like late fees.

So Netflix delivers DVDs that you choose in the comfort of your home. And includes prepaid return envelopes. And charges no late fees. And because of this, video stores are going the way of eight-track players.

Now Netflix is changing again with its customers, who are starting to stream videos to their home computers. Pretty soon DVD rentals will be a thing of the past -- but Netflix won't. Netflix's position in the marketplace isn't tied irrevocably to one technology. It's all about convenience -- letting the customer control the video experience.

Know your customers and make yourself relevant to them. That's what good marketers do.

To let marketing work, Detroit's car companies will likely have to be trimmed down and focused. It's impossible to create relevant positioning in the marketplace for dozens of American car brands. The task force will have to steer the industry to consolidate, as Japan has done, using government incentives to prune poorly positioned brands and models.

And then the task force, acting as de facto car czar, will have to help the government and the companies stick to new, innovative marketing plans and ideas. One of the most innovative approaches out of Detroit (and it was literally out of Detroit) has been GM's creation of Saturn, a totally different kind of car company. Run with a family feel in Tennessee, offering fixed prices so nobody had to haggle, Saturn was all about customer service. The brand started to create a defined position -- focusing on the customer.

But Wall Street's voracious demand for immediate profits eroded Saturn's position. GM didn't hang in long enough to let Saturn's brand experience live up to its promise, and Saturn was strangled with too little investment and no new approaches. Saturn was managed quarter by quarter to please short-term investors who don't get that a brand is a relationship that takes time to build and resources to maintain. The result has been a slow death at the hands of the financial types in charge at GM.

A bailout of Detroit without oversight by someone who knows marketing will only prolong the agony.