If you haven’t been following this story closely, Hyundai is one of the very few bright spots in a downright ugly automotive sector. Hyundai U.S. unit sales year to date were up +1.4% and September was its 9th consecutive month of year-over-year gains in retail market share.
The Hyundai brand is clearly one of the few auto companies to be driving both sales and brand equity, consistent with some of the learnings described in a previous post, “Should Your Brand Focus on Energy to Drive Growth?”
Hyundai Assurance Program
The Hyundai Assurance program, and its success, has been well reported in the media and other blogs (see Brand Channel’s “Hyundai Formula: Inconspicuous Luxury Plus Empathy),” so I don’t need to go into great detail here about it. Essentially, Hyundai recognized that U.S. consumers were reluctant to buy cars when they feared losing their jobs. So, they launched the Buyer Assurance program which allows Hyundai buyers to return their car within 12 months, no questions asked, if they lose their job.
Success Factors – Beyond the Obvious
That’s the story. But actually, it’s not. Listening to Joel and David, it was clear there were other equally important aspects of the program that drove success. What were they?
Consumer Insight – The basic insight was simple: potential new car buyers were afraid to purchase because they feared losing their jobs. The answer, the Hyundai Buyer Assurance program, was anything but. It actually communicated two very subtle, but important additional messages:
“Hyundai understands me.” Consumers felt that Hyundai was really listening to them and acknowledging their real world concerns. Everyone else was just offering bigger discounts and O% APR financing. Consumers always want brands that they feel listen to and understand them.
“Hyundai is providing hope.” In the depths of the financial crisis, consumers were looking for something, anything — to provide hope. The Assurance program provided a simple message of hope in an industry with almost none. The program met a very real and powerful need for consumers to latch onto something that would connect them with a positive future.
Product Quality – Hyundai had a perception gap. Over the years, car quality improved significantly, yet the perception of “cheap and inferior” was deeply rooted in consumers psyche. The great recession of 2009 provided an opening for Hyundai, just as the gas crisis of the late 70’s did for the Japanese.
An opening for consumers to actually reconsider and try a less expensive Hyundai as an alternative to higher priced U.S. or Japanese models. And when they did, most consumers were surprised at the quality: “Wow—this is a really nice car.” This “surprise” generated positive word of mouth, which in turn reinforced business growth.
Media Spending – Hyundai historically spent its advertising in 1/3’s: one third for “brand” advertising, one third for dealer ads, and another third for individual dealer model promotions. Working together, Sales and Marketing consolidated all of the spending behind the Assurance Program, effectively tripling the media weight versus a standard marketing program. This enabled a fully integrated marketing program from TV ads down to dealer POP.
3 Key Lessons for Marketers
- The Hyundai example illustrates the power of a great consumer insight. Connecting your brand’s benefit to a compelling need is a great way to engage consumers and make them feel like your brand is for them. Hyundai identified and tapped into basic powerful consumer insights about hope and understanding.
- Getting consumers to rethink your brand is easier when you can connect to an external event that prompts reconsideration. Executing a new Marketing program to capitalize on an external event gives consumers permission to reconsider. Consumers wanted less expensive options during the crisis, and the Assurance Program gave them a reason to reconsider Hyundai with less risk.
- When you have a recognizably big idea, really put your money behind it. Hyundai tripled-down on the Assurance Program media and delivered an end-to-end fully integrated campaign in support of it.
The Hyundai Assurance program has all the earmarks of fundamental marketing done extraordinarily well – great consumer insights, a quality product, innovative marketing programs, integrated marketing — and a measure of boldness and daring-do that’s all too rare in Marketing.
Wouldn’t it be great if your brand could do the same?