Back in September, General Motors surprised many when it announced its 60-day Satisfaction Guarantee program that gives customers the ability to drive a GM car and return it if they didn’t like it with absolutely no very little financial burden. The first month of the program saw only one return (count ’em, folks!) – and that was because the customer traded in his manual-transmission ‘Vette for a slushbox automatic. Today, a little more than two months into the promotion, GM had a total of 193 vehicles returned under the program (out of a total 220,000 sales) .
Now there is a bit of a “number -fudging” going on here, mainly in the way the Satisfaction Guarantee program works: the customer is given a choice – either sign onto the Satisfaction Guarantee program (which gives the customer the ability to return the vehicle) or get a $500 instant discount. So now that we have the basics down, let’s get on with the number-crunching: out of the 220,000 vehicles sold:
- 653 customers opted for the Satisfaction Guarantee program and
- Out of those 653, 193 people returned their vehicles.
So that makes for 193 out of 653 – meaning that (roughly) 30% of vehicles were returned under the program. While that sounds bad on the surface, it’s really not – and here’s why:
- Those who took advantage of the Satisfaction Guarantee program were unsure with their vehicle purchase to begin with, so it would seem that they were more likely to return the car. As such, it’s not entirely obvious whether the return resulted because of product concerns or general purchase conditions (such as whether the customer could afford the vehicle in the first place).
- On top of that, how many customers visited a Chevy, Buick, Cadillac, or GMC dealer because of the Satisfaction Guarantee program, liked what they saw, made a vehicle purchase, and – in the process – felt that the Satisfaction Guarantee program was unnecessary? In other words, they liked the GM vehicle so much, they opted for the $500 rebate instead and forgot all about the 60-day take-back program.
- Moreover, Mark Reuss, GM Vice President of Global Product Engineering, said that some customers who returned their vehicles traded up to another GM vehicle with more features than the one they originally purchased.
That said, some customers who returned their GM vehicle within the 60-day timeframe may have truly been unsatisfied with the purchase. Fortunately, GM is looking to find out what the reasons for returning the vehicles were – so it can learn from those unsatisfied customers. Reuss said that he and other GM executives plan to call customers who returned vehicles under the program and get feedback as to why they made the decision. “This is about the best unfiltered consumer feedback we’ve had,” said Reuss.
The GM Authority Take
The Satisfaction Guarantee program is a very good marketing and promotional tool designed to show consumers that their perceptions of General Motors’ products being inferior in quality are outdated. By calling the 193 customers who returned its products during the promotion, GM will be capitalizing on the opportunity even further by learning the reasons for the returns. That being said, we think GM should extend the program indefinitely just to prove how competitive its products are.
Most recently, the Satisfaction Guarantee program was extended by another 60 days and is now scheduled to end January 4, 2010. Just in case you were wondering: the idea to call customers who returned the vehicles came from GM’s Chairman Ed Whitacre.[Source: The Associated Press]