Repositioning ThriftAugust 3, 2008
One story that I always tell my MBA students is about the demise of Oldsmobile. For many years, decades really, Oldsmobile was an aspirational car for the retired and almost-retired crowd. If you wanted a big luxury car with a little more of a sporty appeal than a Cadillac then Olds was the ticket. But then, gradually, tastes for automobiles began to change and General Motors found themselves with a dying brand, a nameplate that was losing sales year after year.
What did GM do with Oldsmobile? Well, they tried to do what marketers call reposition it. And a radical repositioning it was. They wanted the public to think of Oldsmobile not as a big, dowdy ride but an exciting, sporty car for the younger driver. They were trying to totally reinvent its brand image. To do that they brought out new, completely redesigned, models with racy body lines and higher revolution engines.
Accompanying this new engineering was a very expensive advertising campaign with the slogan “This is not your father’s Oldsmobile.” Even though those advertisements have been off the air for years now you may remember that phrase — its exposure was so broad and so often repeated.
Did it work? No. Oldsmobile was discontinued in 2004. Why didn’t it work? Well, GM certainly had and continues to have a myriad of problems so I doubt there is only one answer. But here is an important part of the answer. No one believed that it wasn’t “their father’s Oldsmobile.” The nameplate had such strong perceptual associations with images and thoughts of being old, having the added problem that the word “old” was imbedded in the name of the vehicle, that no amount of reengineering and marketing communications could change it. In marketing, we understand that changing people’s minds about a product, or an idea, or a political candidate, is immensely difficult. And GM failed with Oldsmobile.
I think we are failing in how we communicate the goals and benefits of savings to younger workers. The average 25 year-old does not aspire to “retire.” Much like the “old” in Oldsmobile the word “retirement” brings with it a host of perceptual associations, often born of the stereotypes of “tired” old people. The twenty-something set does not look forward to the day when shuffleboard is their daily recreational activity. Even the word “thrift,” a word that is contained in the title of my book on the subject, conjures images of someone knitting while scanning the paper for coupons. These are not thoughts and images that inspire action. Retirement seminars, retirement planning sessions, on-line retirement calculators all suffer this important deficiency in the way they are presented, or packaged.
Younger people do aspire to “financial independence.” Rather than speaking of retirement, conversations and tools which help people determine how to save so that they will achieve financial independence earlier in life are likely to be better received. While the economics of a “Financial Independence Calculator” or a “Financial Independence Planning Session” may be nearly identical to their retirment counterparts the marketing is much better.
We need to begin speaking in new terms to the Millenial generation, a group that on the whole saves very little. The language of “pensions,” of “retirement,” of “security,” while certainly effective for those who remember the Great Depression are less potent now than the language of “independence” and “self-determination.” The math can remain the same, but the marketing needs to change.