3 Lessons from Hyundai on Turning Around a Failing Brand
27 Jul 2015
How do you go from being synonymous with shoddy, sub-par engineering to becoming a Top 100 Global Brand? You might want to ask Hyundai. Although to some it may appear that the 46-year-old car-maker’s turnaround happened overnight, in reality, it took more than ten years to become an “overnight success.”
How did they do it? As with any sustainable change, it had to begin internally. In 1986, Hyundai successfully entered the U.S. car market with its economically priced $4,995 Excel. Because the price point was perfect for the thrifty consumer, sales outpaced expectations. However, it eventually became clear that the cars were poor in quality and in need of constant repair. Hyundai’s focus on churning out inexpensive cars quickly, established the company as a cheap brand—and one whose customer base began to just as quickly disappear. Rather than bow out of the competition, the carmaker looked at how it could improve its product first, and image second.
That last sentence bears repeating: Hyundai looked at how it could improve its product first and image second. As they say, “You can’t put lipstick on a pig.” Well, you can—but you really shouldn’t.
When teaching branding fundamentals to entrepreneurs, I always stress the importance of making sure that your external brand matches who you are internally. If it doesn’t, you’re bound to do more harm than good when your customers find out you’re selling them mystery meat even though you promised them sirloin steak. They’ll figure it out eventually, and the damage might be irreparable.
Take a page from Hyundai’s book on transformation and implement the following to help rejuvenate a failing brand:
1. Innovate: By introducing first-of-its-kind incentives like its 10-year/100,000 mile warranty, Hyundai was able to find creative ways to attract new customers and keep them. Sometimes innovation means finding ways to improve the customer experience.
2. Improve: Once it determined that it no longer wanted to be on the low end of the brand totem pole, the car company drastically improved the quality of its cars. It pretty much started from scratch to re-build its brand from the inside out. And is now reaping the rewards of doing the hard work.
3. Invest: By investing heavily in its people, products, and promotion, Hyundai spurred a brand evolution that has now become a case study for other brands. You can’t expect to transform a business unless you decide to invest in the things that really matter.
Given that Hyundai’s luxury models are now competing with the likes of Mercedes-Benz, we would all do well to learn from this well-engineered comeback—regardless of whether you’re selling cars…or lipstick.
*This post was originally published on LinkedIn.