During the economic depression which followed the financial crash of 2009 car sales slumped across America. Automobile makers tried all sorts of promotions, many featuring big price cuts, but they could not lure buyers onto their forecourts and persuade them to buy. Rebates and other traditional incentives just were not working. Hyundai USA took a different approach. They kept asking why and went past the most obvious answers. Why are sales down? Because people are not buying. Why are people not buying? Because of the recession. Why is that stopping people who can afford a new car and need one? Because they are worried. Why are they worried? Because they fear they might lose their jobs and not be able to keep up the payments.
Once they gained this insight Hyundai decided on a daring marketing strategy. They could eliminate the risk for the customer by transferring it to Hyundai. They offered new buyers a reassurance that if they were laid off in the first year after buying the car, they could return it at no loss. “In this uncertain economy, we are looking for ways to reassure shoppers that Hyundai still represents the best value in the auto industry,” said John Krafcik, President and Chief Executive of Hyundai Motor America. “If you find that you cannot make your payment because of a covered life changing event, we’ll allow you to return your vehicle and walk away from your loan obligation”.
The promotion was a success. In the two years for which the guarantee program was in in place, Hyundai sold over 1 million cars in the USA. Only 350 customers returned their vehicles. Hyundai saw its share of the US automobile market rise from 3.0 percent to 4.6 percent over that time. (Source Automotive News May 2011)
The lesson for marketers is to keep asking ‘why? ‘ in order to understand the real motivations and problems that your customers face. And what if your prospective customers feel concerned about the risk because your new product is innovative and unproven? Is there a way that you could you indemnify them by taking on the risk yourself? All major innovations should come with a money-back guarantee at very least!
Wait! Before you go…
Choose how you want the latest innovation content delivered to you:
- Daily — RSS Feed — Email — Twitter — Facebook — Linkedin Today
- Weekly — Email Newsletter — Free Magazine — Linkedin Group
Paul Sloane writes, speaks and leads workshops on creativity, innovation, and leadership. He is the author of The Innovative Leader and editor of A Guide to Open Innovation and Crowdsourcing, published both published by Kogan-Page. Follow him @PaulSloane