The Economic Advisor

It’s All About the Offer – Let’s Refuel America!

In a recent Sunday Blog Carnival there was a post about a new incentive program called Let’s Refuel America! This is brilliant marketing to present a unique offer… but I made the mistake of reading the fine print.

In a nutshell the program is like this: Fuel prices continue to rise. So the Program appears to help their buyers stabilize the cost of fuel. With this offer the price of unleaded or diesel fuel is locked at $2.99/gallon for three years. The participants do this by using a special card linked to their credit card account.

Participants use the special card to purchase enough fuel at $2.99 per gallon to travel up to12,000 miles per year in each of the next 3 years. So no matter what the price at the pump says, you’ll never have to pay more than $2.99 per gallon for qualifying fuel.

At first glance, this is a great offer. Americans are ranting that gas will hit $10.00 or more a gallon in the US. This is similar to the prices currently paid in Europe.

The offer appears to be very appealing for anxious Americans.

But look at the fine print and there is another story. Each type of car has a maximum amount of gallons of gas allocated for the program.

• If you buy the Dodge Caliber or Jeep Compass, which both average 24 miles per gallon, you can buy a maximum of 1500 gallons at the special price.
• If you buy the Jeep Commander or Dodge Ram 1500, 2500 or 3500 Pickup, which average 15 miles per gallon you can buy a maximum of 2400 gallons at the special price.

It appears that the company is rewarding people who buy the cars that waste the most fuel. Those gas-guzzling cars are harder to sell when fuel costs are high.

At the same time the program offers a cash back program. You buy a car and they lower the price.

Of the 28 different vehicles listed, the biggest rebate and fuel allocation goes to those that waste the most. 7 of the 10 most fuel efficient vehicles give you $0.00 – nothing – back if you buy them. The inefficient cars average nearly $1000 cash back.

If you include the fuel efficient cars the average drops to just over $700 per car.

On paper it make better sense to just give $700 per car.

Another way to calculate in simple math: the 28 cars, pickups and jeeps listed average 18.6 miles a gallon and the average gas allocation is 1977 gallons.

On paper it makes better sense to just allocate 1900 gallons per car.

Those are the observations of North Americans living in Europe with different cultural outlooks on cars, the environment and what a good offer really is.

But this offer is made to a specific market. This whole campaign is well targeted to its American market. It will be interesting to see how successful this marketing campaign turns out to be.

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Cindy King is a Cross-Cultural eMarketer & International Sales Specialist, aligning businesses with different cultures. She has over 25 years field experience in international business development and helps mid-sized business owners create international business development strategies that shorten time to profitability.