Promises, promises…
What’s with the insect on the steering wheel? Read on and you’ll find out (it’ll be worth it, I promise)…
After 15 years, it’s time to put something out there. It’s a concept related to brand value that’s been in my head, now brought to light by a couple of client projects and a recent article in the automotive trade press about new car warranties.
Let’s start with the article. The article discussed the decision by Genesis, Hyundai’s luxury division, to offer a 10-year, 100k mile powertrain warranty on new cars. This is the same play the parent company ran over 25 years ago with its core, mass-market Hyundai products, and I find that original decision to be even more interesting.
When Hyundai entered the U.S. new car market in 1986, the only thing it had going for it was the second-cheapest new car for sale in the U.S. The cheapest was the Yugo, which was a terrible car on its way out of the market. The original Hyundai Excel was a little less crappy than the Yugo yet still a lot more crappy than even the cheapest cars of the day from more established brands. What it had going for it was price, and a brand name that sounded suspiciously similar to a well-known and respected automotive powerhouse.
Fast forward just over 10 years later, and Hyundai was ready to elevate its brand to become a true peer of established heavyweights like Toyota and Honda. Although Hyundai’s product quality had improved from that first entry, there was still a sizable gap to its competitors. Hyundai needed a way to signal its intentions.
Some marketers might have chosen to appeal to some other aspect of the buying decision. Maybe an emotional appeal. Maybe a clever, attention-grabber completely unrelated to the product itself. That’s not what Hyundai did. They cut straight to the chase. In 1999, they began offering a 10-year, 100k mile warranty on all their new cars.
It was a brilliant move. They knew they couldn’t promise reliability comparable to Toyota, or engineering brilliance comparable to Honda. The reason was simple…they had a decade plus reputation for building cars that were neither as reliable or as well-engineered as those other cars. A direct promise about reliability or engineering would have completely lacked credibility. So they promised the next best thing. We’ll stand behind our product longer than anyone else will, so if it goes wrong, it’s on us, not you. Implicit in that promise was the company’s belief in its own products. If its products weren’t at least reasonably good, making that bet would have been catastrophic.
By now, you know the rest of the story. That bet bought Hyundai the runway to continue improving their products and ultimately their reputation among consumers. 25+ years later, Hyundai has very much become a peer to Toyota and Honda. So much so they’re now taking on Lexus and Acura with their Genesis luxury division, which brings up an interesting wrinkle.
It’s not clear that a 10-year, 100k mile warranty will be as meaningful for the luxury car buyers Genesis covets as it is for the mainstream buyers that it targets with its Hyundai and Kia lines. Luxury buyers are more likely to prioritize prestige, design, features and driving experience over reliability and warranty (which is fortunate for brands like BMW and Audi). And that may ultimately limit the value of the warranty promise to the Genesis brand, especially when it’s competitors promise to “Experience amazing” and “Precision crafted performance.”
You might be wondering what this has to do with the concept that’s been rattling around in my head for 15+ years. That concept has to do with how visibility, promise and delivery form the engine that drives long-term growth (or erosion) of brand value.
The Hyundai example illustrates a key component of brand promises. To contribute to the brand value engine, promises need to do three things. They need to matter to their audiences, they need to be memorable, and they need to be credible. Marketers often ignore the first and last piece, choosing to focus on making promises memorable.
The reality is that if any of the three components of a promise is missing or weak, the promise loses meaning and limits its ability to contribute to brand value. And when it comes to credibility, one of the biggest contributors to credibility is reputation, which reflects the market’s accumulated memory of the brand’s history of delivering on its promises.
So what about that picture? It was taken in 2024, when cicada brood XIX emerged after 13 years underground. Kind of like the brand value concept of mine that’s finally seeing the light of day after a bit longer than that. I had no idea when I snapped this picture 2 years ago that a picture of a cicada, seeing the light of day for the first time in 15 years while crawling on the steering wheel of an abandoned car, would come in handy for an article about, well, cars.
The universe was clearly sending a message.
