Behind the Curtain

So your marketing budget is tighter than a lineman's waist band after Thanksgiving dinner, and you have to decide where to spend those precious dollars to get the word out about your product.

You have two choices: Buy a booth at a trade show such as the Society of Automotive Engineers World Congress or invest in more targeted private technology showings for the OEMs. The crowd will be bigger at SAE, but the possibility of making a sale or at least finding a champion for your product at an auto maker is much greater with the private showing. Plus, you won't have to worry about competitors stealing your idea at a trade show.

With a tinge of uncertainty, you call a consultant to help with the decision.

“Frankly, given $100, I'd spend it on a technology review if I wanted to sell a specific product,” says Brian Skogler, an automotive consultant from Spring Lake, MI, (near Grand Rapids) who worked 12 years as a designer at Ford Motor Co. until 1976.

Before creating B.I. Skogler Associates in 1990, he worked at Prince Corp. (now a part of Johnson Controls Inc.) and Donnelly Corp. and arranged private showings for both suppliers even before that marketing route was trendy. He went on to do the same for several other suppliers in his consulting role.

Skogler is convinced that every private showing he's been involved with has resulted in a sale of some kind. Even if fewer than 10 people came and even if no one seemed outwardly interested in the product at the time of the event, the phone would ring several weeks later, and the customer would request another showing and more detail, Skogler says.

“If the choice was that or SAE, no doubt the private showing would be the thing to do,” he says. “If you're smart, do your exhibits right and plan your products well, you should be able to do two or three of those (private showings) for the same investment that you'd spend on an SAE exhibit.”

SAE officials know they have a problem on their hands, and that it's tough to compete with private showings. Still, they also know that merely scheduling such an event with an auto maker can be a monumental undertaking. Most suppliers, especially the smaller ones, will never get in the door.

There are thousands of automotive suppliers with good ideas, but Ford and the Chrysler Group will only hear from about 50 of them a year — basically one a week. General Motors Corp. is downright stingy in granting audiences. The No.1 auto maker holds its two-day Tech World event at metro Detroit locations each spring and fall, and only eight suppliers are invited. GM holds a similar event in Europe as well.

GM purchasing chief Bo Andersson, and the advanced technology team decide which eight to invite. If you're one of the lucky few, you're likely to leave with an order of business, as Andersson has said that Tech World events should generate contracts with these innovative suppliers. Some 3,000 product development employees at GM, along with top executives, attend Tech World.

A supplier should cherish an invitation for a private showing with an OEM and bring only its very best advanced technology because it may be several years before that customer opens the door to you again.

Even Delphi Automotive Systems, the former GM parts subsidiary, has limited access. Bill Lafontaine, Delphi's director of marketing and customer development, says the supplier doesn't get any special access to GM because of its history.

Lafontaine says Delphi has done about 25 private showings a year for potential customers since 1997, and that they are much more cost effective than trade shows. “A major trade show would be five to 10 times what some of these private shows would cost us,” Lafontaine says. “When you're thinking of six figures for floor space it takes your breath away.”

To deal with the cost issue and be more competitive with private showings, SAE has created the “Technology Village” for this year's Congress. The supplier — even one that isn't exhibiting — can have a fully enclosed booth that is completely furnished, has electricity and requires no labor, for $25,000. The host company merely has to show up with its technology, which can be carted in under cover.

The hundreds of thousands of dollars in expense to be at Congress surely was a factor in the recent departure by virtually all of the major Tier 1s, including Delphi. Those participating include Denso Corp. and American Axle & Mfg., both of which will scale back exhibits this year.

For one consultant, private showings should not supplant trade shows. “You need to do both — not either or,” says Kim Korth, president of IRN Inc. of Grand Rapids.

She looks to the European model, in which the Frankfurt Motor Show is a mammoth celebration of both complete vehicles and individual components. Suppliers and auto makers talk in detail about new technology, and Korth says Detroit must replicate that model. “SAE has potential to be as important as it once was,” she says.

Listen to Tom Murphy and other Ward's editors Monday and Thursday on WJR 760 AM radio in Detroit.
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