Leaf power: How a ‘hero product’ drives Nissan’s reputation
Leaf power: How a ‘hero product’ drives Nissan’s reputation
In the 2013 Best Global Green Brands ranking, just released, Nissan claimed the title as the most-improved company, jumping 16 places to rank No. 5 overall. Not bad, considering that before 2012, it didn’t even make the list. The rankings look at the alignment, or lack thereof, of the public’s perception of 50 global brands’ environmental performance compared to those same brands’ actual environmental performance.
Nissan’s move into the fast lane coincided with the market uptake of its electric vehicle, the Leaf, introduced in the U.S. in late 2010, and in Europe and Canada in 2011.
All of which begs the question: Is Nissan’s high ranking as a brand the result of a single product? And, if so, is that risky?
I posed the question recently to two Nissan executives: Roel de Vries; corporate vice president and global head of marketing, communication and brand strategy; and Billy Hayes, vice president, global sales.
de Vries quickly dispelled the notion that Nissan is a one-trick pony. “I think what we are starting to see is a recognition by consumers and the market of the ongoing investment we are making, especially in the Leaf,” he told me. “But not only the Leaf. Like many car companies, we're investing quite a bit in getting our cars cleaner and getting our whole supply chain more green.”
The Leaf’s high standing — and its halo effect on Nissan — makes for an interesting case study of the relationship between companies and brands, and the risks and opportunities for companies that have a breakout green product. Having tracked green marketing for nearly 25 years, I’ve been leery of companies whose image relies on a single product or initiative, especially if it represents a relative small part of its revenue. In Nissan’s case, the 30,445 Leafs it sold worldwide in fiscal 2012 represent well under 1 percent of the 4.9 million vehicles it sold overall during that period. Still, that’s considered a success for a completely new car model boasting a completely new type of engine and fueling system.
So, how did Nissan get there?
“What we've done over the last couple of years is to bring a real product to real people at a real price,” said de Vries. “There's a lot of activity going on everywhere, but a big part of it in our industry plays in the world of PR. They are products that are not very accessible to people or that are not on the road for people to see. What we have done different to others, I think, is that we have developed a car that's real, that's accessible, and it's being recognized everywhere. Our volumes are really starting to pick up nicely now but before even the volume pick-up, we've had a lot of recognition in the mass media, whether it is the Car of the Year awards, or great write-ups in newspapers or motoring magazines. What's working for us is to do something that's very close to real use for real people.”
I asked de Vries about Nissan’s marketing strategy. I recalled that when the Prius was introduced in the U.S., Toyota balanced its environmental pitch with one aimed at early tech adaptors. Its 2000 tagline, “Prius/Genius,” effectively hedged Toyota's bet that even if the green crowd didn’t go for this new-fangled type of car, the tech crowd might. So, did Nissan early on focus on green-minded consumers, or did it try to build a larger tent?
Nissan went directly for the green, says de Vries. Its earliest ad, for example, featured a polar bear — “which was a very clear link between the environment and the impact of cars on the environment, and the fact that we are bringing a car to market that doesn't have any emissions. So, it was a statement of the fact that cars don't have to be bad for the environment. At that stage, we didn't talk so much about the specifications of the car or its pricing. We very much went with the concept of zero emissions.”
It didn’t take long for consumers to get down to the nitty-gritty, says de Vries, asking such questions as, “What does that mean for me? Is it real? What does it cost? What is the range of these vehicles? Are you investing in infrastructure?"
That led to Phase Two. “We started doing communication about our investments in charging infrastructure,” says de Vries. "We started to do communication in terms of what the actual cost of the vehicle is and the total cost of ownership. As you know, the vehicle is expensive but there are lots of subsidies all over the world, which is quite complex for consumers. I think that's an ongoing communications job we have to do.”
Now that the car is taking off, says de Vries, “We are moving our communication closer to what I would say is normal car communications: These are the specifications, these are the prices, this is where you can buy it. Our dealers are getting more positive about the vehicle, so they're starting retail-type, come-and-test-drive type of advertising.”
That’s a healthy trajectory for green marketing. Start with the true believers and grow the market from there, until it becomes seen as “normal” — just another quality product.
“We went out with a very aggressive strategy to distribute the car through 50 states,” says Hayes, who oversees sales of the Leaf globally. “We're not like some of our competitors that are going into certain states, where it's sort of a compliance car to avoid some penalties. The Leaf is really a part of Nissan; it's not just a niche car. And the more that people see it on the road, and the more they have friends and relatives that drive one — and live the lifestyle around an EV, which is not that different than having a regular vehicle — the more momentum we gain.”
I wondered about how perceptions of the Leaf changed inside Nissan once it was in the market. “What for me was a big eye-opener is that some of the biggest fears that we had in the beginning didn't register at all with the people that are driving the car,” said de Vries. “By the way, that doesn't mean that we don’t have to spend a lot of time and work to change perception of the general public when it comes to range anxiety, and we have to keep investing in infrastructure to make this car mass volume. So I'm not denying that issue at all. But for me, a big eye-opener was that the people that have bought and that are using are not experience the downside at all.”
For Hayes, the biggest surprise was customers saying, “You know, I bought it thinking it was going to be my second car but it quickly became my primary vehicle."
Consumers aside, the Leaf is also changing Nissan as a company. “It's gives confidence to us as a company, but it also gives a much stronger belief that we need to keep on doing development and technologies that are ahead of the rest of the world, because that's the only way you can make a statement,” says de Vries.
Ultimately, however, it all comes down to getting cars out of the dealer showrooms and on the street. “What's going to grow the perception of us as leaders in the space is volume and people seeing the car on the road,” says Hayes. “We're seeing markets that are not traditional green markets that are screaming for the car, like St. Louis and Boston,” says Hayes. “Believe it or not, Atlanta is our number-three market for the Leaf. We're seeing demand come from places that we weren't even forecasting at the beginning.” And the bigger the demand, the bigger the halo effect for Nissan.
It's that halo that's lifted Nissan among the list of top green brands. "A large amount of the initial perception that they are a sustainable business is because of the Prius," says Jez Frampton, global CEO of Interbrand, which publishes the Best Green Global Brands study. "In the same way, Nissan has created what we call a 'hero product.' From the consumer’s perspective, without a doubt, companies’ perception are driven by an individual hero product, which will make them appear to be a highly sustainable business.”
Says de Vries: “What the Leaf is doing inside the company is creating a belief among ourselves that we can be truly leading. And that if we do something that is beyond what our competitors do, that it can really have an impact.”
It’s a virtuous circle: A major car company innovates, gets market uptake, builds brand value, and gains the confidence to keep pushing the technology and the market. That happens all the time in the world of product innovation, but rarely in green, and even rarer with a high-impact product like the automobile. It’s something to celebrate.