The Monkey Shack

Last year I bought a Dell XPS laptop for over $1400. I upgraded the machine to meet what I needed, and bought during a sale so I thought it was a bargain at the time. But today I went online to discover they are selling essentially the same laptop for $949. Other consumers who purchased new vehicles a few years ago are kicking themselves when they see the discounts and incentives some automakers are offering right now.

The recession has forced consumers to carefully consider where they spend their money. Companies across the board have reacted by slashing their prices, leading consumers to then ask themselves if they’ll ever consider buying anything at full price again. Ask Taco Bell if it could ever move away from having a 99 cent value meal.

In 2005, GM became the first automaker to allow customers to buy vehicles at the employee rate. The “employee pricing” promotion worked in the short-term, boosting GM’s sales 41 percent in June 2005. Ford and Chrysler then followed with their own employee pricing plans the following month. But that short-term strategy did little to offer added value to customers, but instead cannibalized their brand. Detroit’s automotive industry is now on life support.

During the Super Bowl, one automaker took a dramatically different approach. Instead of cutting back its advertising, Hyundai bought the spots vacated by GM. How do you think an assembly worker at a GM plant felt when GM said we weren’t going to advertise during the game, and let an overseas competitor come in and rub it in their faces that one of their models was named North American Car of the Year? I can’t imagine morale was at an all-time high at the GM plant the Monday after the game.

But that is a post for another day. Hyundai also took the time during the game to introduce its “Assurance Program,” where customers could return their vehicle without any damage to their credit if they lost their income in the year after their purchase. Instead of slashing prices, Hyundai added value.

As sales in the automotive industry continued their precipitous drop, Hyundai posted 14 percent increase in sales in January. I wonder why?

In an email I received this morning, brand expert Martin Lindstrom noted, “As every business goes about cutting their marketing budgets, slashing development costs and sticking their heads underground, experiences shows that those who take a chance on doing the opposite will emerge on the other side of the recession with the brand fresh in the consumers mind. A brand is first and foremost an investment, so why jeopardize the many years and millions of dollars spent building emotional connections with your customers? Now is the time to show the world that your brand is a survivor, and when Noah is calling, you'll make it onto the Ark. There are only few spaces left.”