If you watch the tube at all, by now you’ve probably seen those commercials from Dodge, Chrysler and Jeep promoting their Let’s Refuel America deal. Basically, if you buy one of their new cars that’s eligible for the program (from the list, they are definitely pushing their somewhat less popular models and a bunch of gas guzzlers), you get to lock in your gas prices at $2.99 per gallon for the next 3 years. Interesting concept. And one that seems like a terrific deal up front for the consumer (if you’re at all thinking about buying a new car this is one hell of an incentive). It also could be a big risk to the car manufacturers (after all, what happens if gas hits $6 gallon or more in the next 3 years? They are going to have to eat the difference, right?). Needless to say my interest was piqued. So I spent some time doing online research to find out what the deal really is all about. You know what I discovered? This telltale sentence on the Print Rules page of their site: “This special Let’s Refuel America Program is an alternative to the traditional incentive offers of Consumer Cash/Lease Cash and/or APR.” So, although the auto makers are taking some risk, on their end it’s really no different from any of the other incentives they’ve offered over the years. It’s just that some very smart marketer found a way to tie the incentive into the one thing that’s on everybody’s minds right now—the rising cost of fuel. Because this is such a hot button at the moment, and in our minds gas has become really expensive (even though we’re now paying about what Europeans paid 10 years ago), the consumer’s perception is likely to be one of even greater savings vs. getting $2000 cash back or 0% APR. But is it? Consider this: If a car gets 20 mpg and they pay for fuel for up to 12,000 miles of driving per year for 3 years, here’s the cost to them at current fuel prices… 12,000 miles divided by 20mpg means you use 600 gallons per year. Let’s assume gas prices rise to $4.99 a gallon. The car manufacturer is paying the difference ($1.99/gal) so it costs them $1194/year for 3 years, or $3582 to offer you this deal. That’s really not much. And certainly no more than they usually offer in rebates and whatnot. Now, if fuel prices rise even more they could end up eating it a bit. But if prices stay the same or drop, they’re going to be sitting pretty. And you probably would’ve been better off with the cash in your pocket instead (because then you could decide where and when t to spend it). The lesson for you? As a consumer, it’s up to you to look deeper than face value when a deal like this comes your way and you find yourself drooling over it. As a business owner there’s an even bigger lesson, or 3, to be learned… 1) If you want people to take notice, find a way to fix their biggest pain or handle their biggest problem and promote that. These commercials don’t say a darn thing about how great the cars are, because right now who cares? People are worried about the cost of putting gas in their car regardless of what kind of they own. So the manufacturers focused on that. 2) You can often make a different, more appealing, offer without changing the impact on your end. Just look at how the numbers played out for the car companies in this deal. 3) It’s all about perception. Right now, locking in your gas prices at $2.99 gallon for 3 years sounds like a way better deal than getting $3500 cash back on your purchase. Even after doing the research and calculations, it still sounds better to me because emotionally I respond to having one of my biggest stressors taken away. I’d be willing to bet there are people out there who will even buy a new car with a higher monthly payment than their current vehicle just to get this deal. So they may actually end up paying more overall. Fascinating stuff, isn’t it? What do you think about this kind of marketing? And how could you apply this concept to your business? Post a comment and let me know…