The Edsel. It was supposed to be Ford’s genius and huge automobile success of the 1950’s. But, after dismal sales and record financial losses, production was halted on this make of car and its four models.
If you’ve been keeping up with our weekly emails and newsletters, you know that I read my share of business books always looking to apply the knowledge I acquire to our own business, and also sometimes to pass it along to you. This month, as my husband and I decided to buy a new car (an Infiniti Q50 which I think we adore almost as much as we adore our children) I was also reading Business Adventures by John Brooks. Each chapter tells a factual business tale and the one about Ford Motor Company in the 50’s caught my eye.
The intentions of the Ford Motor Company made sense. The idea of creating the Edsel was based on the simple premise that the car manufacturer wasn’t addressing one key demographic and its automotive desires. As the ownership of cars became more common than ever, consumers would make an initial purchase of an entry level car. And, then as they grew professionally and therefore became more financially successful, these customers would trade up to a mid-priced car, which in those days ranged from $2400-$4000. In fact 40% of all cars purchased at that time were in that price range. The problem for Ford in 1947 was that it only had one such car on the market and when people traded up they were more likely to go to General Motors to make a purchase instead.
The answer to this problem seemed obvious if incredibly risky. Invest a record amount of money in researching and creating a mid-priced car that people would be clamoring for. It took seven years, but in 1952, The Formal Product Planning Committee, Ford’s brain trust, had concluded that it was time to begin designing this new vehicle. Not just a new model, but a new make all together.
Extensive market research went into this effort. For example, in order to determine what the car’s personality should be, recent car buyers in several US markets were interviewed at length on car styling and the psychographics involved in selecting a specific car. The detailed perceptions about who these customers pictured as the type of person who would drive a specific type of car were of keen interest to the researchers. (Not a lot of time was spent on changing the power and handling of the vehicle. It was incredibly similar to other vehicles on the market.)
Jump to 1957 when the Edsel was finally on the market in dealerships that were hand-picked because they had the best reputation for being reputable and for selling a lot of cars. Sales failed to ever reach projections and in just two years, things were awful. Only 109,466 Edels were sold when projections were to sell 2 million in the first year alone.
The story of the Edsel became an iconic business fail. But, it didn’t have to happen. While there are still insiders who say that the Edsel was simply a victim of the changing tastes of consumers between inception and completion, Brook indicates that the issues had more to do with Ford not listening to the desires of the same consumers they polled and hoped to gain as customers.
Here’s what I mean. After the results of each market study came back with hard data, the decision makers at Ford chose to ignore that information and make their own decisions. Originally, there was a list of 6,000 potential names for the new make. That list was provided to the Chicago and New York offices. Each office was given 4 days to narrow the list of 6,000 to just 10. As Brooks states, “by an almost incredible coincidence, which all hands insist was a coincidence, four of the names on the two lists were the same; Corsair, Citation, Pacer, and Ranger had miraculously survived the duel scrutiny.” However, instead of selecting one of these names, Breech, the gentleman sitting in for the absent Ford didn’t like those options and chose one of the rejects -Edsel- himself.
Separately, the aforementioned extensive research that went into the styling of the car was in the end ignored. The appearance made little sense – the back end seemingly a different car from the front. Not even all of the fanfare that went into the delivery and unveiling of the Edsel could save it from demise because Ford and his team didn’t follow through on what they learned from their research.
Not listening to your customers is bad, but listening and then doing the opposite is worse. This 60 year old story is a nice reminder that the best thing we can do for our clients, customers, and even our own success is to listen and act on what we’re told. Give them what they want.