“Alfred Sloan used the social media of his time to overcome Ford’s seemingly insurmountable lead in 1923. When Mr. Sloan took over GM, he realized that to overtake Ford and to become the pre-eminent brand in cars, he would need a strong brand at the entry level and at the top level.
He would need a strong entry level because the Ford Model T was predicated on a low price. The Model T owned the entry level market. Sloan needed an entry level car to build a brand for GM. People’s initial car purchase was always a Model T. This initial purchase created a bond between customer and product that is hard to break. To create long-term customer value, an attractive entry level car was essential for GM. He needed a strong luxury brand because this segment that is not influenced by the national economy. The people in this demographic bought a car, without fail, every two years. A strong brand in Cadillac would give GM a dependable revenue stream that would help fund the rest of the organization.
Sloan targeted the lower and upper segments. T he middle segments would take care of themselves. If people originally purchased an entry level Chevy, they would move into middle segments for subsequent purchases. Ford did not compete in the middle segments. Chevrolet was the critical piece in Alfred Sloan’s strategy.
“Okay”, Alfred said to himself in 1923. How do I get this strategy to work? How he answered this question should be studied by contemporary social media marketers. Alfred used social media to create a social brand at GM that is equivalent to today’s strong social media brands.
A simple definition of social media is when the brand and the consumer engage one another. The two develop a close, almost human relationship. The two become “friends”. This friendship creates many touch points between brand and the consumer. These multiple touch points create the consumer buying decision. When Alfred Sloan became head of General Motors, he traveled the country talking with customers. He engaged with them. In 1923, the General Motors brand created friendships with their market. These conversations allowed Mr. Sloan to realize that the car market was now different than it was in 1908. These differences changed the entire paradigm that the car market was based. This allowed Mr. Sloan to understand that he could overtake Ford with the right strategy.
America now had a middle class. This was in contrast to 1908, when the Model T began. People now had disposable income. They would pay extra for a good product. No longer was a low price the deciding factor in choosing a car. People wanted a car that was easy to operate and that would give them a comfortable ride. People wanted a car that looked nice. People wanted a “cool car”. Manufacturing technology had also changed. In 1923, an assembly line could be shut down and rebuilt to offer customers variety in car options. This shut down could be done in such a way that the company would not lose any money.
The new Chevrolet came in a variety of colors. It had headlights for night driving. It had indoor heaters to offset cold weather. It had windshield wipers to offset bad weather. The Chevrolet was entry level, but it was stylish, easy to drive, with options that an average customer would really need on a drive. Next to the Chevy, the Model T looked old, and dowdy, …”just so ‘08”.
Still, the Model T had a strong brand. In 1923, nine out of ten cars on the road were Model Ts. Chevrolet dealers had to be energized and convinced that the Chevy could now compete with the Model T. Again, Sloan used social media of the day. Social media is used, not just to engage customers, but to motivate workers in an organization. This is how Mr. Sloan used the social media of the day.
Bill Knudsen was a Danish gentlemen how headed the Chevrolet division. Mr. Sloan sent Bill Knudsen to dealerships around the country to excite them about the product. One meeting changed the dealer’s outlook. When asked what his goals were for Chevrolet, Mr. Knudsen answered in his thick Danish accent, “I want vun for vun”---I want one for one. “Vun for Vun” became the rallying cry for the new Chevrolet division and soon the historic Model T brand was overtaken.
Dean Hambleton
dnhambleton@gmail.com
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