Saturn Shoots for the Moon

Brushing aside rumors that his brand will be orphaned by General Motors Corp., dealer Todd Ingersoll proudly shows off his new Saturn of Danbury (CT) dealership as a vote of confidence in the division's future.

Ingersoll, who started as a salesman at the dealership and went on to purchase it six years ago, says that constructing the new facility was done because a lease expired on an original building nearby.

“Saturn's partnership with its retailers gives me a degree of confidence to invest in the brand and in the future,” he says. “Above all, I'm an entrepreneur.”

This investment simply boils down to good business, Ingersoll suggests. He has not yet begun to revitalize another Saturn store that he owns in Watertown, CT. He is waiting to see how the economy plays out.

Saturn of Danbury is one of only seven in the 440-store Saturn U.S. network that have been revitalized or rebuilt, says Jill Lajdziak, the brand's general manager.

All of those projects have been completed in the last six months and many of the remaining Saturn dealerships are in various phases of the effort. “Revitalization is working,” she insists.

If the Danbury facility is an example, Saturn, with a refreshed and expanded lineup, is also doing a good job as GM's primary import fighter. “We're running more than 70% conquest sales (at our store),” Ingersoll says. “Toyota, Honda and Hyundai are the primary trade-in (brands) for us,” he says.

“We don't look at Chevrolet or Pontiac as competitors,” Ingersoll says of two other GM brands.

Saturn of Danbury sold 700 new cars and about 400 used cars in 2007. On average, Saturn dealerships sold 481 new cars in 2007. That's drastically down from the peak of 920 average sales annually in 1994. What's more that was achieved with only a single model.

Now Saturn's portfolio not only includes a compact Astra, but also the mid-size Aura and the crossover utility vehicles, Outlook and Vue. In addition, Saturn has the iconic Sky roadster in its product lineup. Despite that business is tough for Saturn dealers.

“We're seeing a tough market, but our business is up 2% this year,” Ingersoll says. Other franchises in the Danbury area are down about 6% so far in 2008, he says.

Ingersoll's world class facility is located on a 10-acre parcel on Danbury's auto retail row. It features a 25,000-sq.-ft. showroom that is open instead of being packed with cars.

There's one of every model on display inside. But most of the inventory of 150-200 new cars is neatly lined up in rows outside the showroom. Customers are driven around in golf carts to inspect the models they're shopping.

Chris Bauer, Saturn's manager of retail strategy, leads the brand revitalization project. It was spurred by feelings that the once-benchmark Saturn retailing experience was no longer far ahead of other automotive brands.

Other brands have copied Saturn's innovative principles and closed the gap. “We want to increase the gap again,” Bauer says. “We can't get stale, we can't get old.” Above all, Bauer stresses that Saturn “should be the leader in automotive retailing.”

In February and March, he personally led teams visiting an array of stores in the San Francisco and Detroit areas that are deemed to offer the best retailing experiences for customers.

Only three automotive brands were surveyed: Mini, Scion and Hyundai. The team focused on more than 30 other retailing establishments that included Apple, Home Depot, REI, Whole Foods, Ikea, Target and Westin Hotels, among others. Bauer says the teams reported that the best overall shopping experiences were in stores that displayed:

The teams went out alone and as couples to buy things and observe. Sales interactions and purchasing experiences were documented with maps of the stores, diagramming of behavior, flow interactions, merchandising and layouts. Still and video photography were also used. Later the photos and reports were minutely studied.

Bauer says he went to a Lush cosmetics store to buy some hand-made soap for his wife. What does that have to do with buying a Saturn?

“Great retail experiences are like well-produced plays,” he says. That includes the “cast” at the dealership: sales personnel, managers, cashiers and any individuals who interact with customers. Attire has to be right also, he says. This includes uniforms, dress codes and name tags.

The “set” or layout of the dealership has to be right, as do the “props.” These include the cars themselves, brochures, web kiosks and mementos. Lastly, Bauer stresses a good script that lays out the events, actions, behaviors and dialog of the shopping experience.

But Bauer is perceptive enough to understand that dealers don't control all the action. “The customers have climbed on stage,” he says.

There are customers who want to shop on their own, while others require assistance or want everything done for them to save time. “How we choose to interact with customers reinforces what the brand is about,” Bauer says.

Some of the best retailing experiences result in customers consenting to pay more for a product. Bauer says that in the future Saturn must recognize that there are two front doors. One that opens into the actual retail showroom and the other that leads into the virtual showroom. “We must innovate and integrate the experience of both,” he says. The Internet should provide an ability to schedule service on line, with live, real-time assistance to web visitors and even a test drive at home.

At Saturn of Danbury, the sales persons wear uniform blue shirts with their names and date of employment.

The store shines in every way. One of the most impressive things at the facility is the service department. There's not a speck of grease on the floor and it looks cleaner than those in hospitals. A Zamboni-type machine is used once a day to make sure the floor is spotless, says Shep LaBree, general manager of the franchise.

From the time Saturn began selling cars in 1990, the brand has been a benchmark for customer service. General Motors cherry-picked dealers with superior customer service records to become Saturn franchisees.

The results showed that customer service could bring in customers that shunned other GM brands in favor of Japanese imports.

No-haggle pricing, pressure-free buying experiences added up to a new era of automotive retailing. Even with only a single small car to offer, Saturn sales grew to 286,000 units in 1994. Most customers were completely new to GM.

The experiment seemed to be working, but Saturn's volume has not grown even though it now has an inviting portfolio of products. Even more worrisome to GM is that Saturn does not contribute to the company's bottom line.

A revamped product lineup, based mostly on Opel products from Germany, along with the revitalization of its dealerships is Lajdziak's plan to finally bring Saturn into the black.