|
Does "e" Still Matter?
Mark Hogan
SLIDE 1: TITLE SLIDE Thank you. It's a pleasure to be here. With everything that is going on in the world today, does 'e' still matter? Given that budgets are limited and many dot-com's have gone away, why do e-Business at all? Aren't these times really more about survival than about innovation? Why not just let e-Business crawl into a cave and sleep? Good questions, but they ignore the fundamental difference between business in 1991 and 2001. Ten years ago the only direct customer connection was the phone. There is now a piece of wire...or in some cases no wire at all...connecting companies to their customers, enabling instant self-service transactions. Recession or no recession, that connection is not going away! And if you have aggressive online customers, the influence of that wire is going to widen, even during challenging economic times. So the "why do 'e'?" question is easy to answer...it's what customers want! SLIDE 2: WHY IS THE INTERNET IMPORTANT TO GM? Here in the U.S., the automotive internet user, or a person who uses the internet to assist with their new vehicle shopping and purchase, is now in the majority!! That is, more people go online to shop for a vehicle than go to dealers. 55% percent to be exact. That number is expected to jump to over 75% in as little as 2 years, representing over 11 million new vehicles. Now is the worst possible time to put aside your e-Business efforts. SLIDE 3/4: E-GM LOGO/EVOLUTION e-GM was formed in August of 1999 to help bring focus to GM's consumer-related internet activities. Before '99, GM was doing something different online in practically every country of the world. There was no coordination of activities - no knowledge sharing. The result was tremendously high costs and a very poor online user experience. Not a good combination. Between '99 and 2000, we spent most of our time on "kick-starting" the organization. We brought in talent, and forged alliances with top-tier internet players like AOL, Kelley Blue Book and e-Bay. We put a plan in place to develop a global shopping and buying website, BuyPower, in every market where GM does business around the world. Year 2001 has been a time of "maturing and building" e-GM's B2C initiatives. We are on track to rollout BuyPower to 40 countries by the end of this year. With regard to BuyPower, we've noticed some pretty interesting trends as a result of GM's "Keep America Rolling" incentive campaign, which offers consumers 0.0% financing on all GM models until the end of this month. Since the campaign has begun, we have seen a 29% increase in traffic to BuyPower and a 131% increase in leads sent to our dealers. In addition, the closing rate of these leads to dealers is very high -- 21%! This is a great example of how consumers are using the Internet in support of an offline incentive campaign. These results send a clear message that having an effective Web site such as GM BuyPower.com can enhance the reach of an offline marketing initiative. e-GM is working to redefine the way consumers buy their vehicles. An example of this is our online retail pilot, being conducted right with Autobytel in the Washington, DC area. This test is built around the principle that 2 out of 3 automotive internet users shop for their next vehicle at non-branded, third-party sites, vs. at a manufacturer site. SLIDE 5: CELTA PHOTO Another example of a unique retail business model is the Chevrolet Celta, the first high-volume internet-based sales model in the world. The Celta is a sub-economy car produced using an entirely new manufacturing process in Brazil. SLIDE 6: CELTA WEBSHOT Customers can purchase a Celta by accessing the www.Celta.br website on their own PC or at kiosks inside a Chevrolet dealer. By utilizing the website, customers can configure the Celta of their choice, locate a dealership, select a payment option, and confirm delivery of their vehicle. Receiving information at the plant via the web helps to speed-up delivery and better-forecast production needs. This streamlined process has reduced costs by cutting inventory, reducing taxes and correctly predicting profit margins. SLIDE 7: CELTA STATS To date, 70,000 Celta's have been sold. 40,000 of those vehicles were sold online. That's 79% of all sales online! Customers can't get enough of the Celta, which now represents more than 31% of GM do Brasil's total volume. SLIDE 8: ONSTAR Another initiative we continue to mature and build is our telematics business unit...OnStar. Many of you may be familiar with this service, which allows consumers to simply push a button and receive a wide-variety of safety, security and convenience features. Since launching in 1996, OnStar has interacted with more than 10 million customers...that's more than 750,000 each month! 5,000 new customers enroll every day. We are helping these customers in a number of ways. 200,000 people each month get help when they are lost or need tickets to the big game. 15,000 people have their doors unlocked each month, 14,000 people ask for roadside help, 300 air-bag deployment calls are placed and 365 stolen vehicles are recovered. OnStar's capabilities are becoming more important - not less. Right now 46 states are considering laws that would ban cell-phone use while driving. OnStar offers customers hands-free calling capabilities through our new Personal Calling feature and they can receive the latest news or sports via Virtual Advisor...all while keeping their "eyes on the road and hands on the wheel." Earlier this year OnStar surpassed the one-million customer mark, and other OEMs, including Lexus, Acura, Audi and Suburu have signed up as well. We continue to explore the integration of new services into OnStar such as XM satellite radio, which we are beginning to roll out this year. Still, I think we have only begun to scratch the surface of what this amazing technology has to offer. SLIDE 9: EVOLUTION Now that the work has been done, it's time to reap the benefits!! For 2002 and beyond, the plan is to make e-Business pervasive and integrated across the entire company, create outstanding customer experiences with integrated marketing, provide e-Services to our dealers, lead the development of 1 to 1 relationship marketing and continue to develop new business models and technologies. e-GM has accomplished some amazing things over the past two years...
While e-GM's efforts have driven some results, GM has many other "e" initiatives. One of the biggest challenges we face is how to integrate "e" into the fabric of GM. To integrate and educate the organization on why it's critical that we continue to move our operations online. The hope is that it won't always be necessary for e-GM to serve as the ambassador of "e" for GM. We are beginning to see signs that GM is moving in the right direction... Next month, GM and its 300,000 employees in this country will be connected for the first time online. Thanks to a special $3 a month offer from AOL and a new employee portal developed with Workscape, employees will have access to a host of personalized human resource services and corporate information, at home and at work. GM's 88,000 salaried employees will be able to pursue an MBA online, reducing our training budget by $4 million a year. GMAC, our financial services group, has closed approximately 32,000 loans online, making us #1 in this category. GM has already pushed $96 billion through Covisint in 2001. Covisint, which is an online partnership between major OEMs and suppliers, will help reduce inventory, quickly respond to changing market conditions and speed up our vehicle development times. Nearly 135,000 vehicles have been sold through GM's "SmartAuction" website, which allows dealers to auction used vehicles to each other, instead of using a traditional auction house. By doing this, we have been able to save just under $500 per vehicle. In terms of CRM, GM has gone from 40 separate call centers to 3 in the U.S. And globally, GM's 19 customer databases have been combined into 3. We're also using web-based tools at the core of the business - design, engineering and manufacturing - to help productivity and speed to market. We're trying to follow what the folks at Dell have perfected, where you literally go online, configure your PC and get it in a matter of days. There's no reason we can't have a similar approach with cars. It will lean up the supply chain and make our products fresher. And when we achieve a full build-to-order model, we think we can save more than $20 billion in inventory, just in North America. SLIDE 11: GM LOGO There are no plans at GM to give up on e-Business. GM's President and CEO, Rick Wagoner has "e-Business Leadership" listed as one of his top four priorities for the company. Great efforts have been made over the past several years to use technology to better communicate with customers and enhance their transportation experience. Our dedication to this effort has not changed. The internet is becoming more and more important in terms of our ability to succeed in this fast changing and unpredictable world. Through it we'll be able to interact richly with our customers, anticipate their needs and meet those needs in a more fulfilling way. I continue to believe that the internet will be the single biggest opportunity affecting all businesses - yours, mine, everyone's - in our entire careers. But we have to maintain perspective. For a company like GM, the internet is not an invitation to tear down our traditional way of doing business...it's an opportunity to improve what we already do - that that's build, market and sell the best automotive products and services in the world. Thank you. |
