salience AND sales

In January, Hyundai did a major ZAG. Other car companies decided to play the “Zero Down. Zero % Financing.” card as well as the “Employee Discount for Everyone” card to rescue drowning sales. Hyundai didn’t. Hyundai zagged while others zigged.

Hyundai introduced an alternative marketing program that didn’t rely on the same easy credit, wallet-stretching gimmickry that got us in this current dismal economic mess.

Understanding the lack of confidence consumers have with their job stability, Hyundai created a marketing program to reduce the risk in buying a car. The program was called the Hyundai Assurance plan. Its mechanics were simple: if you lost your job after buying a new Hyundai, you could walk away from your loan or lease and return the car to Hyundai.

In marketing, salience occurs when a business designs a marketing program that connects emotionally and rationally with consumers. In business, sales occur when people buy stuff.

The beauty of the Hyundai Assurance marketing plan is in its salience and its sales. With a 10.0% unemployment rate on the horizon, it’s no secret people lack confidence about when their next paycheck is coming. Sales results of the Hyundai Assurance marketing plan are astounding.

Overall car sales in the United States have declined about 40% from the same time last year. (Yikes!) Hyundai car sales aren’t in decline. Nope. So far this year, Hyundai has recorded an increase of nearly 5.0% from the year prior.

As marketers, we must applaud Hyundai for designing an effective marketing program that drives both salience and sales.

SOURCE: New York Times Magazine article (Rob Walker) | March 22, 2009

Comments

[Craig Landes]

This is a great example of connecting with a customers pain and solving the problem. The name of the program even resonates. Thanks for bringing this to my attention.

[Justin]

Man, I saw an ad with this promotion last week and was really impressed. I think it's a great, reassuring approach. Not only did it catch my attention, but I found it appealing. That's pretty rare in the plethora of white-noise between television programs.

Thanks for spotlighting it John.

[Brett Duncan, MarketingInProgress.com]

I was wondering how well this program was going for them. Thanks for digging up the stats.

The beauty of this program is that I really don't think Hyundai has much to lose here. It will be interesting to see just how many cars get turned in. In most cases, even if someone loses their job, it's still not easy to just go without a car.

Similarly, I heard of a church applying this same "assurance" logic to tithing. I don't think that's quite apples to apples . . . .

[Charlie Quirk]

Great post John, I was wondering how this was going for them.

Your comparison of Hyundai sales vs. the entire auto industry are incredibly telling. I think this campaign will come to define the Hyundai brand for years to come! They have leveraged the uncertainty of tough economic times as an opportunity to establish themselves as a pro-active leadership brand.

[Mike Wagner]

Thanks John for the post and the research behind it.

What so many don't understand about sales is this: sales is a free sample of a company's brand.

How a company sells and how it will be to work with as a customer connect in the mind of the buyer.

Hyundai is suggesting a lot about their brand by the way they've picked to respond in sales.

Keep creating...practical surprise,
Mike

[Denise Lee Yohn]

the sales results surely speak for themselves.

nevertheless, i can't help but feel uncomfortable whenever i see the hyundai ads -- by simply mentioning the possibility of "losing my income" in the next year, the ad makes me nervous -- instead of walking away "assured," i end up thinking about the likelihood of me needing such assurance and feeling quite depressed.

this creates a cognitive dissonance with the brand for me -- but i'm not in the market to buy a car (and even if i were, i quite frankly wouldn't consider a hyundai) -- so perhaps this isn't a common occurrence -- and based on your report, it seems hyundai is doing just fine.

and yet, i do worry about their approach...

[Nigel Lamb]

It does seem to me that it is a bit early to know whether this is a success or not.

Having said that, I do congratulate them on thinking about the problem differently and coming up with a solution that resonates with the target market.