General Motors reported today a first-quarter profit of $865 million, as revenue raised more than $9 billion. That is, of course, good news for the auto industry in Detroit, and GM in particular.
But, while the bottom line has been improved for automakers? The true barometer of a company and brand’s success actually isn’t revenue or profit, as strange as that might seem. It’s the percentage of market share.
On that note, GM is still treading water: Its worldwide market share remained steady at 11.2%.
On one hand, you could say that’s good news. GM is not losing market share, despite its recent troubles. But market share is also the predictor of things to come (or not come). If you aren’t taking customers away from your competitors, you are not winning. Otherwise, when the entire industry pool starts to dry up, your revenues and profits go along with it and you are simply a victim of what is going on with your industry as a whole.
By increasing market share, you are in effect putting money in the bank.
This leads me to a common thread for us at Stealing Share. Why does most brand, marketing, business decisions, operations, etc., always seem so strategically defensive? You might think a particular ad or brand themeline is clever or even memorable. But does it move the needle? Does it get customers of the competition to switch?
The answer is usually “No,” because so much of an industry’s particular marketing looks almost exactly the same. Can you distinguish between advertising among the auto manufacturers? Not much, if at all. (Quick: Tell me the difference between Dodge and Ford trucks? Which is which?)
I was once in a meeting with a global automaker, helping them decide which advertising agency to hire, when one of the executives said, “We need to make sure the one we pick has experience in the auto industry. Auto marketing is a different animal.”
What the exec meant was that you had to make sure you had a stellar cinematography of a car riding along a seaside freeway with messages just like all the rest.
That is, not marketing to steal market share. But marketing to hold it.