Not many car manufacturers have the loyalty and adoration from their fans that Ferrari have. But how did it get this way? What makes Ferrari so special and the most valuable brand in the world?
When Enzo Ferrari started Scuderia Ferrari in 1929, he had no interest in making road cars. He was set on making nothing but racing cars. The Scuderia was meant to function as the racing division of Alfa Romeo. This spirit of racing has never left Ferrari and is one of the key reasons for the brand’s success. It isn’t the only reason though. You don’t just race and get to where Ferrari is now as Brand Finance’s most valuable and recognisable brand in the world three years in a row in 2019, 2020, 2021.
“[Ferrari are] instantly recognisable the world over, even where paved roads have yet to reach. Ferrari inspires more than just brand loyalty, more of a cultish, even quasi-religious devotion, its brand power is indisputable.”
In all the metrics Brand Finance used to measure brand value, Ferrari topped each one of them. These metrics included: desirability, loyalty, consumer sentiment, visual identity, online presence, and employee satisfaction.
How in the world did they manage this? Was it simply Enzo Ferrari’s infectious levels of dedication and enthusiasm? It might be a contributing factor but surely that can’t be the reason.
Jane Reeve, Ferrari’s Chief Communications Officer said that the brand is so strong due to the company’s consistency and authenticity. She said,“Our values, our unerring search for excellence, our sense of belonging with varied stakeholders at all levels, have all been vital.” This is true but it doesn’t explain how the brand got like this and how it manages to maintain brand power.
With one answer comes Harvard Business School professor, Stefan Thomke, who described the unique process Ferrari uses in order to build and market its cars, in what he has very creatively dubbed, “The Ferrari Way.” The Ferrari Way is built on three foundations: driving pleasure, performance, and style.
A Ferrari head of marketing once said,
“We are not the fastest or most comfortable car on the market, but the best combination of the two, which makes us the most thrilling. Our concept of performance includes pleasure.”
Now that seems to fit right in with what Thomke was saying, doesn’t it?
During the 1960s, Ferrari spent no money on advertising. None. This was as unusual at the time as your likely thinking it was. Ferrari would also intentionally limit the production of their cars. This is a marketing strategy called “shrink to grow.” Thomke has stated that this is the strategy that Ferrari have built their brand on.
Shrink to grow means to slash underperforming brands and doubling down on well-performing ones. It’s like losing fat in order to achieve physical fitness. Ferrari don’t continue with projects that are underperforming. If it’s wasteful, they cut it and only focus on their best products. So, what does this look like in action?
Ferrari make sure that Ferraris aren’t for everyone. They can’t be. They aren’t even for the wealthy. They’re for a specific kind of wealthy. To understand what I mean by this let’s look at the rules in place for buying a Ferrari.
- You aren’t allowed to sell a Ferrari within your first year of ownership. This helps to discourage flipping the cars for a profit like in the sneaker market.
- You cannot tamper with the logo. The horse must stay black. The shield must stay yellow.
- You can’t pick whatever colour car you want. You can’t have a pink Ferrari, for example, and you can’t paint it after your purchase from anyone that isn’t Ferrari.
- Ferrari retains the right to buy back your car.
- Ferrari will actually perform a background check to prove that you love the Ferrari brand.
- Finally, you likely have to be older than 40. This isn’t a hard rule, but it is rare for someone to get approved for a purchase if they’re under that age.
Thomke summarises this perfectly, “If anyone can walk into a dealership and get one, then it loses what makes it special… for the model to work, you have to keep prices up.” Fewer products, high prices.
Now how can they pull this off? How can they demand such things from their buyers? Well, it’s because of a couple of things. The first is that they avoid brand dilution. In terms of car manufacturing, Ferrari have never compromised their values and the advantage to this is their exclusivity. The only way to get the Ferrari experience is from Ferrari, and only a few people can actually have that experience. This is quite typical of luxury products but it’s everything else Ferrari does on top of this that elevates them.
The second and maybe the biggest reason is that they’ve created a strong sense of brand loyalty to begin with. This is how you can make ridiculous demands from your clientele. Ferrari owners love Ferrari. They’ll do what they have to in order to get one. This isn’t even limited to just Ferrari owners.
Merchandise and licensing have played a huge part in building the brand of Ferrari. There are clothes, accessories, and racing memorabilia available to everyone. 50% of Ferrari’s profits come from licensing alone. There are two amusement parks with the Ferrari branding on it for god’s sake! And these parks are well-considered too. Ferrari World Abu Dhabi has the world fastest rollercoaster, the Formula Rossa. Ferrari Land in Europe has the continent’s fastest and highest vertical accelerator coaster, the Red Force. This allows people to enjoy the brand without having to experience the cars themselves.
No more is this more apparent than in Formula 1, where the third reason comes in, Ferrari put their money where their mouth is. They can race. You see countless people at races waving flags and wearing Ferrari branded clothes despite most of them never owning or experiencing a Ferrari car. The fans emotional connection to the brand is unparalleled. We tend to admire those who are good at things that we enjoy, hence why Ferrari are lauded based on their racing history.
To date, Ferrari have won 238 Grand Prix’s, 16 Constructor World titles, and 15 Drivers’ World titles. This makes Ferrari one of the best racing brands in the world. Their nearest competitor, McLaren, has 56 fewer wins than Ferrari. To be fair, McLaren haven’t been racing in F1 for as long as Ferrari.
When it comes down it, maybe Enzo Ferrari summed it up perfectly, “My motors have a soul.” Part of the reason Ferrari are so successful is something that you can’t quite put a finger on. It’s a feeling. These are cars made by people who love cars and that passion and soul put into each car comes out in ways that are difficult to explain. What is known for sure is that Ferrari have certainly kept up their spirit throughout their entire existence and have produced quality cars that will ensure their legacy continues for decades to come.