How Mark LaNeve used the classic brand's past to reimagine its future.
Mark LaNeve arrived at General Motors in the spring of 2001, two years after Wayne Cherry ushered in the Art & Science design concept that would become the basis for a new product revolution at Cadillac. But LaNeve, 44, who took over for John Smith as general manager of the Cadillac division, had the tougher job: to bring sellable versions of radical new prototypes to market, wrapped in a contemporary vision of the brand—not as a 1950s maker of plush land yachts, but as a performance marque.
Today, the whimsical Spanish car names like Seville and El Dorado are barely visible in a revamped lineup of sexy alphanumeric badges led by the CTS, the XLR and the SRX. Just as Smith and Cherry paved the way for a series of futuristic designs, LaNeve devised an unyielding and often brash growth strategy to serve as the compass for Cadillac's new marketing direction. From idea to execution, both plans spoke the same language: bold, daring and aggressive.
When one delves deeper into the marketing, a theme of "no compromises" emerges. The blueprint called for all new vehicles to sell for at least $30,000; ads that build drama around products, not people or story lines; a media strategy that seeks to "own" events and publications; pricing that shuns blanket incentives; uniformity of advertising at the local, regional and national levels; a customer-service dealer incentive program; and facility upgrades consistent with the opulent Art & Science interior theme that married beauty with technology.
The ambitious scope of these objectives speaks to the nature of the rebirth of Cadillac, an American icon that held the luxury crown for decades but had faded by the late '90s. GM knew it needed to take drastic measures to wipe the slate clean after two decades of miscues and neglect and make Caddy cool again. To the extent that goal has been achieved, LaNeve and his cohorts can take pride in having brought Cadillac—a brand Elvis once cherished—back from the abyss.
"We're not back yet," cautions LaNeve, named 2003 Grand Marketer of the Year by Adweek sister publication Brandweek. "But we've turned the corner."
That may be an understatement. One of the indicators of Cadillac's newfound success is that its median buyer age has dropped from 58 to 55 in the past two years, according to J.D. Power and Associates. The median age is 50 for the CTS and as low as the mid-40s for the Escalade SUV. Those figures speak volumes, suggesting Cadillac is winning over more of the 75 million baby boomers who will control the luxury car market for the next 20 years.
"We are seeing young professionals in their upper 30s to low 50s trading in high-line imports," says Mike Colloran, Cadillac's Western regional manager. "That's a buyer we haven't traditionally done well with."
At Casa Automotive in Sherman Oaks, Calif., even the sales staff is getting younger, with many associates now under 40. Dealership president Howard Drake says he began seeing changes in 2001 as the Escalade—a favorite of hip-hop artists—drew NBA players and celebrities into his showroom.
With some of the sheen returning to the Cadillac nameplate, the marketers have ample momentum to grow—and none too soon. After a 9 percent loss in 2001, the division's overall sales jumped 16 percent to 199,748 vehicles in 2002. The rear-wheel-drive CTS, which bowed in January 2002 as the first of four new sport sedans, sold 37,976 units in 2002, some 8,000 more than projected. CTS sales were up 62 percent to 34,078 through August 2003, putting the model on the heels of the single-model sales leader, the Lexus ES 300. Overall, Caddy is still the No. 4 luxury nameplate, but it is steadily gaining on Mercedes for the No. 3 slot behind BMW and category leader Lexus.
"Here we are, a year and a half into this, and all I do is get beat up by dealers: 'Where are [the vehicles]? How come I don't have any?' " says John Orth, Cadillac's Southeastern marketing manager. "That's good news."
That Cadillac's push for a new generation of buyers has begun to pay off so handsomely might come as a surprise to skeptics who watched the CTS race across TV screens during the 2002 Super Bowl in the first of a series of jarring ads laced with Led Zeppelin music. Was this the same Caddy of the manicured suburbs and dear old Grandpa Joe? Clearly not.
Subsequent Caddy offerings are becoming unlikely darlings of auto enthusiasts. Cadillac's first sports car, the splashy $75,000 XLR, has been featured in Car and Driver three times this year, garnering the cover of the October issue. When the buff book rated the newcomer against the Mercedes SL500, Jaguar XK8, Lexus SC 430 and Porsche 911 Carrera, the XLR came in an impressive third, behind the $98,000 Porsche and $86,655 Mercedes.
All of which has to make GM feel good in a marketplace in which it is steadily losing share to imports in almost every other category. Though Cadillac accounts for less than 5 percent of GM vehicle sales, analysts believe a renaissance at the brand could spill over into neighboring divisions.
Jim Sanfilippo, an analyst at the Detroit-based consultancy AMCI, predicts the technological ascendancy of Cadillac will spread to nameplates like Chevrolet and Pontiac. A smaller version of CTS' high-powered V-6 engine, he notes, has already been placed under the hood of the new Chevy Malibu.
"If Cadillac gets this right, it will nudge consumers considering [the company's] other brands to the conclusion that GM can get them right, too," says Sanfilippo.
The dramatic changes at Cadillac date back to 1997, when Smith and lead designer Cherry dove into the Art & Science program, along with Caddy's agency, D'Arcy Masius Benton & Bowles (now Chemistri) in Troy, Mich. Along with a $4 billion product push to develop stark new designs that revel in edges and sharp angles, the project employed extensive research, including visits to GM's Cadillac museum in Detroit and interviews with ex-Caddy brass from the brand's heyday. One major quest was to identify positive "levers" that could become the building blocks of product and marketing efforts.
"The idea, at a basic level, was to help us understand what Cadillac means," says Julia Pietrowicz, Cadillac's ad research manager. By unearthing the brand's DNA, Pietrowicz says, the Caddy team could "contemporize the brand without violating its essence."
Seven hundred stories later, they found that, in spite of age or economic background, people thought of Cadillac as a social vehicle. They equated it with success, and they rooted for the brand's return. The studies also confirmed that Cadillac had squandered its reputation for making the best cars with the newest technology.
"There were a lot of hits and misses," says Gary Topolewski, chief creative officer at Chemistri. "And when Cadillac tried to communicate luxury, it was always old luxury: wedding gowns, red carpets, the Ritz, the estate. It was very pretentious and stuffy."
For his part, LaNeve wanted to instill something he felt had been missing from the brand's advertising: an unapologetic exuberance. Borrowing a page from the imports, Cadillac ads now tout design and performance without the standard trappings of premium car pitches. There are no people (other than the drivers), no lacquered voiceovers, no tree-lined driveways leading to stately mansions. Instead, cars are speeding along hairpin turns in Italy's Dolomites or stark Western terrain in Big Sky Country, with occasional cuts to taillights and grill shots.
"We wanted to keep it simple," says LaNeve. "We wanted to showcase product. ... We didn't want to clutter the ad with too much going on."
Starting with the new tag, "Break through," Topolewski says the ads were designed to make people stop and take notice. "It's about violating monotony," he says. "It's doing things differently, which is what Cadillac had always stood for. Going our own way. It was confident, powerful."
In fact, the 2002 Super Bowl spot was a watershed moment. It turned heads with its sheer audacity, setting the tone for an integrated campaign that would shower attention on the CTS and, ultimately, put Cadillac back on the map.
The 60-second ad, titled "Highway," opens with a 1959 El Dorado stuck in city traffic. The driver breaks free down a side road, and the drum riff from Zeppelin's 1971 hit "Rock and Roll" builds in the background. As he cruises through a desert, a CTS suddenly appears and swerves past. The driver then passes a gas station, transfixed at the sight of a hulking Escalade SUV. Next, at a train crossing, he stares at an XLR beyond a passing tanker car. In the blink of an eye, he becomes the XLR driver as the El Dorado disappears. The narrator (actor Gary Sinise) says ominously: "The legendary bloodline is about to boil."
"Highway" was a collaboration among Chemistri, LaNeve, former Cadillac brand manager Kim Kosak (now vp of marketing for Chevrolet) and GM executive ad director C.J. Fraleigh. While Kosak proposed the use of "Rock and Roll," Topolewski called LaNeve "the gut check" for all creative decisions on the campaign.
"Mark listens to his heart as far as his emotion is concerned, and Cadillac is a very emotional brand," Topolewski says. "He and I worked quite nicely in that regard. We would be sitting around in a room thinking about stuff, and he'd say, 'This just doesn't feel right,' or, 'This feels right, and this is where I want to go.' There's a lot of emphasis put on strategy and positioning, but at the end of the day, it has to go through the gut check."
The Zeppelin ad created a stir, in part because of the unexpected association of Cadillac with a band that had never allowed its songs to support advertising. "The day we launched, I probably did 30 interviews with rock stations," LaNeve recalls.
The $100 million campaign called for an aggressive media buy for 12 spots during several marquee entertainment and sporting events. In 2002, Cadillac signed a three-year deal as the exclusive automotive sponsor of the Super Bowl and cut deals with the Academy Awards, Wimbledon, the Ryder Cup and major PGA tournaments.
Jay Spenchian, Cadillac marketing director for global products, credits LaNeve for championing the bold strategy in the face of internal skepticism. Given the cost of the buy, "there was a lot of angst" at the front office, he says.
But LaNeve was adamant that it was the right move for Cadillac: "[The Super Bowl] was the world's biggest stage, the world's biggest ad platform, and there were a lot of promotional opportunities tied to it," he says.
For all of 2002, Cadillac spent $220 million on advertising, about $100 million more than in 2001, when LaNeve took the helm. Cadillac augmented its big-event TV strategy on the "Break through" campaign with its print ad buys, commandeering the top three placements in magazines new to the brand, such as GQ, Men's Journal, Fast Company and W. In outdoor markets, gigantic Caddy banners draped buildings in high-traffic locales: across from the Superdome in New Orleans, for example, and outside the Staples Center in Los Angeles.
LaNeve also sought broad exposure via product placement in movies. Far from the supporting role automakers typically play, GM worked with Warner Bros. to feature its cars in a 15-minute freeway chase in The Matrix Reloaded this past spring. LaNeve gave the film's producers two dozen of its soon-to-be-launched nameplates, the CTS and the Escalade EXT, to smash up.
"We are trying to creep back onto the radar screen of the American luxury market," LaNeve says. "And I don't think you can get it done these days just by buying prime time."
Prior to the Matrix premiere, an ad ran in USA Today and the Los Angeles Times with a photo of a CTS covered with bullet holes and the copy: "Which star of Matrix Reloaded did all its own stunts?" Cadillac was later inserted into John Frankenheimer's Bad Boyz II, while the CTS also grabbed part of the spotlight away from BMW's Mini Cooper in The Italian Job.
Already, the Escalade has become something of an urban legend. The SUV has had the dubious honor of being the No. 1 car among celebrities and thieves. And while that may not be a marketer's preferred route to hipness, the Escalade is blazing its own success along the Caddy comeback trail. It launched in 2001, at about the same time as LaNeve's arrival, and a year later toppled the Lincoln Navigator to become the volume leader in luxury SUVs. Sales are up 11.5 percent so far in 2003 to 35,827 units in a segment that has seen a cumulative increase of only 1.7 percent powered by heavy incentives.
All this is gratifying territory for LaNeve, a former all-American linebacker at the University of Virginia who looks less like a luxury-auto executive than a Runyonesque tough guy. Following his initial 14-year tenure at Cadillac, LaNeve detoured to Volvo Cars of North America, based in Rockleigh, N.J., from 1997 to 2001, first as vp of marketing, then as CEO.
Many observers say that experience outside Detroit has informed key decisions on his way to resuscitating Cadillac.
Ed Williamson, a Cadillac dealer in Miami, notes that while at Volvo, LaNeve was also competing with imports. "He learned firsthand how the guys that are our chief competitors are really doing it: BMW, Mercedes, Lexus," says Williamson. "When he came to us, he brought that knowledge to the table."
Adds Orth, the regional Cadillac dealer: "The best thing that ever happened to Mark was going to Volvo. He's able to do things at Cadillac that if he'd stayed at GM his whole career, he wouldn't have been able to do." As an example, Orth singles out LaNeve's push to get Cadillac's regional ads to look more like the national ones—similar to what BMW, Mercedes and Lexus do. "Everyone's singing from the same hymn book. That was Mark's vision for Cadillac," Orth says.
At last month's national Cadillac dealers meeting in Las Vegas, LaNeve replayed the consistency message as mission critical for Caddy's local advertising—serving up photos, recommended headlines and plug-and-play scripts, to the delight of many dealers. That's a far cry from the debunked brand management system of the 1990s under former GM North American president Ron Zarella, in which each model was a brand unto itself and very little advertising was consistent with anything.
Topolewski recalled the Vegas meeting, at which LaNeve held up a couple of existing retail ads as examples of what not to do. "It was actually quite funny," Topolewski says. "These were ads with balloons, starbursts. ... Then he held up ads that had the same message but with a much more logical, and more premium, execution. He won them over with that."
LaNeve has also encouraged dealer groups to think big in local promotions—and bring as much hype to the CTS as possible. Last year, Miami dealers responded by staging "Over the Bay," a series of parties timed to Super Bowl XXXVI and local concerts that saw a sleek CTS suspended by a crane high over Biscayne Bay. The sedan was also fawned over by guests at the South Beach Wine & Food Festival, a party for Ocean Drive magazine at Club Level, Cirque du Soleil and a launch event for Louis Vuitton attended by Madonna, Gloria Estefan and Lenny Kravitz.
In Los Angeles this fall, Cadillac is launching a permanent drive center in Orange County at the former El Toro Marine air base. Grassroots golf clinics with up to 1,000 customers per day will be held with tour veterans Fred Couples, David Ledbetter and Tom Watson.
The latest raft of Cadillac advertising also reflects LaNeve's head-on strategy: let the vehicles do the talking. In "17th Street," another throwback to the '50s, a man waiting for a subway in Philadelphia sits beneath a series of posters showing a classic Cadillac. As a train pulls up, he gazes longingly at the image through the window. As the "Rock and Roll" theme is playing, the train pulls into the station and the cars morph into a series of shots of the CTS, the Escalade SRX and the XLR.
For the SRX, a separate campaign features a similar focus on product: A TV spot depicts a view of a star-strewn sky through the vehicle's immense moon roof, with images of the SRX descending a winding mountain road.
Cadillac turned 100 last August, and by the end of 2003, it will have launched four new vehicles this year—the most in a single year in the brand's history. Next in line are a juiced-up version of the CTS, called the CTS-V, priced at $49,000. It's the first of Cadillac's V-Series, which, like BMW's M Series and Mercedes' AMG class, is a performance sub-brand intended to supercharge Cadillac's image. What Cadillac does not wish to repeat is the kind of compromise vehicle it tried to pawn off in the Cimarron, a none-too-thinly disguised Chevy Cavalier that flopped in the early 1980s.
While LaNeve wants to challenge the BMW 3 Series, the Lexus ES 300 or the Mercedes C230, he says he will not do it by offering something cheaper. That makes Cadillac a rare automaker in its refusal to bow a near-luxury car. Since 1999, 35 percent of all luxury vehicles sold in the U.S., including SUVs and crossovers, have had a suggested price of less than $35,000, according to Rebecca Lindland of auto consultancy Global Insight in Lexington, Mass.
LaNeve dismisses that route for Cadillac. He argues that the brand must take a vertical climb back to becoming the gold standard for design, performance and technology, because, he says flatly, "Cadillac is a premium brand."
The CTS does fall below the $35,000 mark, starting at $30,000, while the SRX sticker prices average around $40,000. Meanwhile, Caddy buyers may be getting younger, but they're not any poorer; the brand's median buyer has an annual income of $110,000, according to LaNeve. He adds that, athletes and pop stars notwithstanding, the median buyer of Escalade has an annual income of $150,000; the CTS, the SRX and the XLR sports car all attract the same demographics. "We're going to sell 50,000 Escalades this year; I guarantee you 90 percent are not to celebrities but to regular, affluent customers seeking a luxury SUV," he says.
"There's no reason for Cadillac to go down-market," says Art Spinella, president of CNW Market Research in Bandon, Ore. "The fact is, 70 percent of new-car buyers now earn well above the national median income."
If anything, Caddy is heading further north. Next year, a redesigned STS sedan will joust in the global market with BMW's 5 Series, the Mercedes E class and the Audi A6. In addition, GM is mulling a superpremium Cadillac, having unveiled the 16-cylinder ultra-luxe "Sixteen" roadster at this year's Detroit International Auto Show, to vie with the likes of Maybach and Rolls-Royce.
Credit this latest innovation to Robert Lutz, the well-known product czar who joined GM shortly after LaNeve and is now head of North American operations. "[Lutz] was enormously influential in terms of setting the Sixteen and V-Series in motion," says analyst Sanfilippo. "I think he also had a lot to do with the insistence that a V8 could be put into the CTS, because in any organization, there's a naysayer culture. The V-Series is a huge moment for Cadillac: It's a laboratory, a place for them to develop their best technology."
LaNeve is more interested in honing the current lineup than broadly expanding Cadillac's portfolio. One vehicle he would like to see is a CTS convertible coupe.
No doubt so would Colloran, who reports that Cadillac sales in California are up 10 percent for the year on the strength of the CTS. "We haven't even seen full-scale introductions of the XLR and SRX," he says. "What's really driving the gains is the CTS. ... It's what California consumers want out of Cadillac."
And what do GM executives want from Cadillac? For one thing, to keep stoking that all-important buzz. The recent nods from enthusiast magazines "help us overcome perceptions that our cars can't perform with the Europeans and don't have as good quality as the Japanese," says LaNeve. "The perception still exists, but the facts don't support it."
Just ask Carl Sewell, a Dallas-based dealer who has been selling Cadillacs since the '50s. "The Escalade, CTS, SRX and XLR have generated an entirely new owner base for Cadillac," he says. "They are younger, more sophisticated, better educated."
With its new designs, Cadillac found a way to be contemporary, yet retain a hint of its early models, with their narrow, knife-like taillights. Even the hatchet-blade XLR—anything but a yacht on wheels—has those long horizontal and vertical taillights. The new styling is catching on. West Coast dealer Drake says the XLR is "moving itself" and bringing in high-end import buyers to boot.
Still, not everyone is convinced that Cadillac's comeback is a fait accompli.
Todd Turner, president of Car Concepts in Thousand Oaks, Calif., argues that a few roadblocks could hinder the turnaround. One is vehicle nomenclature. He says brands like Lexus follow a convention when using alphanumeric designations: letters for body design, numbers for engine displacement, etc. "It may strike some as disingenuous that Cadillac abandoned its names in favor of what has been successful for the others," Turner says.
Sewell disagrees. "Cars are a lot like fashion," he says. "They need to make strong statements and conservative statements. Maybe Cadillac is like Armani and can make both."
As far as LaNeve is concerned, that's for others to decide. With a consistent message and a strong positioning, he says, Cadillac can return to its former glory: "What I'd like to get back to is what Cadillac once was: the standard of the world." Bob Seger's raspy voice has put weight behind Chevy's truck theme, "Like a Rock," while Janis Joplin's warbling helped Mercedes-Benz target car buyers in their 40s. That's the kind of strong association Cadillac needed to fuel its turnaround and become cool again. In late 2001, after a long search, marketers found it in the music of Led Zeppelin.
"We went through hundreds of songs," says Mark LaNeve, general manager of Cadillac. Into the reject pile went hits like the Doors' "Break on Through," as well as titles from Bruce Springsteen, the Who and the Rolling Stones. LaNeve was won over by Zeppelin's hard-rock beat, which he says rivals the timeless appeal of Beatles songs. "You don't listen to them and think, 'The '60s,' " he says. "They are going to be just as popular 10 years from now as they were 10 years ago or 20 years ago."
For a spot that debuted on the Super Bowl last year, Cadillac chose "Rock and Roll," from the 1971 Led Zeppelin IV album, one of the band's most mainstream hits. The track was intended to help conjure up a resurgence of the Caddy after a 35-year slumber, with tire burners like the 400 horsepower CTS V-Series and Cadillac's first roadster, the XLR: "It's been a long time since I rock and rolled/ It's been a long time since I did the stroll/Ooh, let me get it back, let me get it back ... It's been a long time, been a long time, been a long lonely, lonely, lonely, lonely, lonely time."
The band had never before allowed its music to be used in advertising—and music critic Anthony DeCurtis says Led Zeppelin's popularity stems in part from avoiding overexposure. "They never did many interviews, and there's still a mystery that surrounds the band," he says. "Even as successful as they've been over the years, there's still something teenagers [today] discover. It's kind of a rite of passage."
To persuade guitarist Jimmy Page and vocalist Robert Plant to let Cadillac use the song, the client and agency team showed the musicians prototypes for the new car designs. "That sold them," says former Caddy brand manager Kim Kosak. Plant soon signed on as a spokesman, making appearances at events including Caddy's 100th birthday bash last summer.
Still, LaNeve won't hang on to Zeppelin indefinitely. Already, the band's music in Cadillac's ads has been reduced to a few bars of vocals or a guitar solo. "We can eventually evolve away from it," says LaNeve. "But for the place we are now, it's good."