Hyundai's Chris Perry on How Direct Marketing Helped Drive Up January Profits
Detroit may view auto sales as though the tank is half empty, but at least one auto manufacturer believes the tank is half full during this recession. Sensing that consumers are wary of driving off the lot with a new car while jobs are stalling, Hyundai Motor America created a warranty providing for that contingency. Directly marketing the "Hyundai Assurance Program" to consumers, the company is allowing laid-off workers to turn cars back in and walk away.
On Jan. 2, Hyundai announced the program to the media and, starting Jan. 19, sent out the first batch of more than 1 million e-mail messages and direct mail pieces. Second and third blasts went out in early and late February, respectively.
From the word "go," Hyundai tracks every metric in its direct campaigns, from response rate to lead generation. But it doesn't make those numbers public. So instead, campaign strategy and total sales are discussed by Chris Perry, director of marketing communications for Hyundai Motor America, which is headquartered in Fountain Valley, Calif. and is a subsidiary of Hyundai Motor Co. of Korea.
Target Marketing: What direct marketing strategy is Hyundai employing to communicate the Assurance message to consumers?
Chris Perry: We're doing both e-mails and direct mail, so it's a multitouch kind of strategy to owners, previous owners, people we call "handraisers" and then prospects. ... A handraiser for us is someone who's come to us and shown interest in our product. So that's someone who may be registered on our Web site or filled out a card at an experiential event asking for more information or someone who gives their name or e-mail address at an auto show event. ...
What we've learned is that a multitouch strategy works best for us. So it's not a one-time [effort]; we try to hit them at least three times with the message. [Hyundai uses] different creative but essentially the same strategic message. ... It's basically just an announcement of the Assurance Program and letting them know what it is and giving them a link to click on to learn more about it. And with that we also had a secondary message, that was kind of tacked on, about the Genesis being named the 2009 North American Car of the Year.
TM: What type of consumer is Hyundai targeting?
CP: Our best audience, from a direct marketing standpoint, continues to be our own owners. So we continue to do a lot of direct marketing to them. But then we also look at previous owners. ... And when we look at these people, we do some modeling and narrow down, by decile, when we think that they'll be back in market, [and] what [vehicle] model that they might be looking to consider. And so we do some modeling and some statistical analysis before we decide which owners to mail to and what message we want to communicate to them.
TM: What marketing research did Hyundai use to determine that this program could succeed?
CP: We knew that Assurance was a strong message, given the economy and given the uncertainty of people's employment. So then it was just a matter of how we get that message out and the different channels that we use to get that message out. ... We're promoting the messaging in TV, in newspaper, online banner advertising and then direct marketing. ... We did some research, both quantitative and qualitative, before we moved forward with the program. So once we developed the program, and made sure it was appropriate for the marketplace, then it was just a matter of how we communicate that message, what channels we use.
TM: What results has Hyundai seen from the Assurance campaign?
CP: Extremely strong. I think two great things that came out of the Assurance Program [are that] people recognize that [these are] uncertain times, and this kind of alleviates their fears when it comes to the economy. And the secondary benefit is that it's really positioning us as a company that cares about the consumer and is looking out for them, and they're starting to see Hyundai as a brand that has kind of got their back, if you will. ... If you look at the January sales from the industry, there's only three brands that were up versus January of last year. ... We were up 14 percent.
TM: Did Hyundai specifically track direct results?
CP: Yes, there are several measures, which include (but are not limited to) delivery rate, open rate, [clickthrough] rate, actions taken (i.e., Build Your Own, Test Drive Request, etc.) and buy rate.
TM: Where does Hyundai plan to go from here with its direct marketing strategy?
CP: We're continuing to evolve and refine. We do a lot of direct marketing and testing and revising. So that's a very key component of our overall marketing communications. So we continue to promote Hyundai Assurance, Car of the Year, sales events, special programs. We send out over 20 million pieces of communication through e-mail and direct marketing every year.