Tag Archives: gasoline

Now that's an offer!

gas-pump-closeup-comp.jpgChrysler’s guaranteeing gas for your new vehicle will stay under $2.99/gallon for the next three years.

Talk about a great offer that addresses a couple of problems:

  1. Chrysler has too many large vehicles to sell, with lousy gas mileage.
  2. Gas at $3.00+/gallon is putting a crimp in the budgets of potential buyers, slowing down overall sales.

Rather than go the traditional route of putting cash on the hood of the trucks, in the form of rebates and/or lower interest rates, Chrysler whipped out the calculator. It doesn’t really matter where the “offer cost” goes from a P&L perspective (neglecting any GAAP requirements for the moment), but it does matter from the consumer’s psyche.

The glow of a low price on a 12 mpg truck fades pretty quickly when faced with $3 or $5 gas. Now the customer can at least put a cap on how much they’ll spend for gas over the next few years and take that worry out of the purchase equation.

Summary and takeaways

  1. Think creatively when developing incentives. Don’t restrict yourself to the traditional BOGO, “X% off”, “FREE X with purchase” offers. The more complex the purchase equation, such as a motor vehicle purchase, the more opportunities you have to create interesting offers.
  2. Use your calculator. Once you’ve got that great idea, make sure you do the math carefully. In the case of Chrysler’s offer, it could get expensive if gas rockets to $8/gallon. On the other hand, if it drops to $2, this could be one of the best offers of all time. (Assuming it helps sales.)