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Black Conservative Customers and a German Once Saved Cadillac - Can It Happen Again?
When worldview and politics diverge, market insights come to light.
Nicholas Dreystadt was used to taking risks. In 1912, at twenty-two, he moved from Germany to the United States to work in the car business. This time, eighteen years later, he was putting his automotive career on the line.
Dreystadt was standing outside a conference room at General Motors headquarters. Inside executives were embroiled in a meeting to decide the fate of Cadillac. It was the Great Depression, and the Cadillac division was bleeding money as sales were down 84%. Dreystadt was not invited. He was just a middle manager, but he had an idea. He knocked on the door, interrupted the meeting, and urged the group to give him just ten minutes of their time.
Dreystadt was in charge of Cadillac’s service organization and had an idea based on what he witnessed in dealerships across the country - that many customers were Black. They were successful doctors, lawyers, singers, and boxers. The executives were surprised to hear this because Cadillac had a firm policy not to sell vehicles to African Americans. They believed having Black customers would tarnish Cadillac’s image as a prestige brand.
Dreystadt told them how these Black customers got around the policy by paying white middlemen to buy the cars for them. At the time, Jim Crow laws prevented wealthy Black customers from living in fancier neighborhoods or frequenting the best nightclubs, but they had a relatively easy way to get a Cadillac. They just had to pay a few hundred dollars more.
Dreystadt urged the executives to open up the market by dropping the policy against Black customers. They agreed, and sales increased immediately, saving the brand from extinction. By 1934, Cadillac sales were up 70% despite the Depression.
Fast forward to today, and Cadillac is in a similar predicament, even if less dramatic. Sales are down 25% from ten years ago in the U.S., and once again, Black Cadillac customers point to a clear growth strategy. This time, the insight for growth lies in understanding them better from a worldview perspective - that Black Cadillac customers may be mostly conservative.
Many Americans don’t consider Black consumers as conservative because they vote overwhelmingly for Democratic candidates. Angela Lewis, a University of Alabama at Birmingham professor, discovered that more than a third of Black Americans identify as conservative, yet more than ninety percent support the Democratic party. She wanted to find out why so she conducted extensive research, which she published in her book, Conservatism in the Black Community.
Lewis found that Black Americans could compartmentalize their alignment with the Democratic party due to the liberal tendency to be more compassionate toward marginalized groups. Otherwise, their values could align far better with conservatives. She also found that when African Americans discussed conservative values, they rarely discussed politics. For them, it’s the worldview as conservative without the politics tied to it.
If you look at Black American customers through a lens of social psychology research, they also exhibit several values that align with a conservative worldview. In several studies, including one published by the National Library of Medicine, cultural characteristics of Black Americans include a strong focus on family. According to research from Northwestern University, greater empathy for family over other groups indicates a more conservative worldview. Liberal customers tend to empathize more with broader groups, which includes a tendency to have greater empathy for friends over family.
Now consider the first group of Black American customers who paid the white middlemen to buy them a Cadillac. They were successful professionals who could afford a Cadillac, and the car was one of the few ways they could express their success. According to research on luxury goods from Georgia State University, status maintenance rather than status elevation is a conservative trait.
Conservative customers tend to use luxury products to reinforce their perceived status, while liberal customers seek to elevate their status in the eyes of others. Dreystadt didn’t observe Black customers seeking to elevate their status by purchasing a Cadillac - they were seeking to demonstrate their already-established success.
So the politics of Black American consumers disguises the fact that a significant percentage are conservative and have clear conservative values. It’s also interesting to note that they live far less in urban or “inner city” environments than many believe. According to Census data, most black customers now live in suburban and rural areas, which aligns with a population with a strong conservative component.
This isn’t to say that all black customers are conservative - just that there is strong evidence for a significant conservative element within the group.
Now consider that 73% of Cadillac dealerships are in conservative areas (using voting data for dealership locations). No matter how you look at it, there is little evidence that Cadillac should try to sell primarily to liberal customers - yet that’s exactly what Cadillac managers are attempting today. Like in 1930, they have a “policy” hurting their sales. In this case, the policy is the business’s decision to project a more liberal image.
Cadillac’s current communications strategy, including national television advertising, is focused on predominantly liberal market media, such as big award shows like The Grammys and Oscars. This is combined with messaging and imagery that aligns with a more liberal worldview. They may think they can leverage their affinity with Black customers to reboot the brand for a younger liberal market, wrongly assuming that their Black customers are liberal.
Cadillac’s current strategy also runs up against how liberal and conservative customers adopt new brands. Liberal customers are far less likely to experiment with an established brand. According to research on food shopping, liberal customers are far more likely to switch to newer, innovative brands, not well-known traditional brands.
The solution for Cadillac today is remarkably simple, just as in 1930 when Nicholas Dreystadt urged the GM committee to drop its racist policy preventing Black customers from buying cars. This time, Cadillac needs to embrace the most prevalent worldview of its customers, including its Black customers, to better align its brand with its market - which is mostly conservative. This has nothing to do with politics - and keeping politics out of the equation is critical for the Black customer market, which votes overwhelmingly Democratic.
There are many examples of successful conservative brands that don’t invoke politics, such as the Dodge RAM pickup truck. It’s the third-best-selling vehicle in America (the best-selling Cadillac is #95). The communications for Dodge RAM employs messaging and talent that appeal to a conservative market, which is half the national market with equal spending power to the liberal market. That’s the market that will buy more Cadillacs. The luxury sedan category even skews conservative. As in 1930, the business is getting in the way of the market rather than aligning with it.
Deciding to appeal to one market worldview or the other is one of the most powerful decisions any business can make. It goes far beyond what a product does and what makes it unique. It’s about aligning a business to how customers see the world, think, and choose to move forward with their lives.
It just takes recognizing the opportunity based on clear market evidence, similar to how Nicholas Dreystadt helped turn Cadillac around in the early 1930s. Maybe it’s time for another middle manager to crash a meeting at GM and tell executives there’s a ready market if they are willing to see it.