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Apr. 21, 2008 – How to grab a piece of the rebate money

By Neil Pascale
Editor
If marketing executive Sterling Doak is any indication, the U.S. retail world at large and the powersports industry in particular ought to be headlong into discussions about how to grasp as much of the coming government rebate money as possible.
Some surveys splashed across the news media have indicated a large percentage of the public will take the hundreds of dollars in rebate money coming later this spring and pay off debts or pocket it, instead of spending it and jump-starting the economy.
That’s not the case with Doak.
“I’ve already spent mine,” said Doak, laughing. “It’s already gone.”
In fact, a national study of close to 8,000 consumers indicates the executive from Turn 2 Powersports Marketing is far from alone. More than 40 percent of consumers plan to spend their rebate money, according to the study conducted for the National Retail Federation.
Plus, history indicates those 60 percent of consumers who say they won’t spend that rebate money aren’t being realistic. Jared Bernstein, an Economic Policy Institute senior economist, told CNN.money.com that taxpayers in the past have spent half to two-thirds of their rebate checks.
With that in mind, how aggressive should dealers be with marketing efforts to try to coax that rebate money from consumers?
“I would place great emphasis on it,” Doak said of the rebate opportunity. “I would take it to the extent where I create a campaign for it.”
Starting in early May, the public will begin receiving their rebate checks in the mail. However, only about one-third of consumers are anticipated to receive their rebates in May. The rest of the checks will be sent out in June and even into early July. With that three-month spread in mind, what’s a good marketing plan and when should it be launched?
“With the current economic downturn, dealers need to be extremely picky about what marketing and advertising vehicles are going to provide the highest results,” said Oné Musel-Gilley, a public relations consultant who has 13 years of industry experience working with dealers and manufacturers of all sizes. “With the stimulus rebate money, my recommendation is to evaluate more direct marketing approaches.
“What I wouldn’t do is spend lots of money on advertising that isn’t targeted.”
Doak of Turn 2 Powersports Marketing agrees and notes the sooner the direct advertising begins, the better.
“The check is irrelevant,” he said of the actual government rebate check coming in the mail. “You put it in their brain that they are going to have that money, so why wait until they get the check? Spend it now.”
Doak says he has seen the auto industry in his local market do just that, luring in customers with a promise of doubling their rebate if it’s used on a new car. Doak notes the actual “doubling” is the dealer fiddling with their own profit margin on the new unit.
Doak also believes the rebate together with the rising oil prices provide an opportunity for dealers to potentially change consumers’ mindset, particularly families. Families that have in the past spent much of their discretionary income on big summer vacations might be thinking twice about doing that because of soaring jet fuel prices, not to mention higher prices at the pump. Doak suggests dealers try a “Fun Bank” marketing campaign, enticing families to spend their rebates, plus a little extra, on family fun at the local dealership. Such an ad campaign could get the following message across, “What’s more important to you, making a couple of pennies off the bank on your rebate savings, or getting to your local dealership and buying something the entire family can enjoy?”
Musel-Gilley, the public relations consultant, believes any marketing effort should appeal to more affluent consumers. She says recent national marketing studies show modestly affluent consumers are now looking for luxury at a value while the super affluent is still buying high-dollar items.
She suggests the following tactics to try to reach some of those targeted consumers:
• Create a series of special events that look top-dollar but are done on a shoestring. Examples include creating some VIP nights/days or holding a private customer reward event.
• Invest into developing a targeted customer e-mail list. Hire a data researcher who can help you research and update a current e-mail list or help you create one. The goal is to have a strong database that you can leverage for e-mail promotions, news blasts and event invites. Try working with area universities or colleges to find a data researcher through the careers office.
• Work with a consultant who can take your firm into the social and new media environment. Web development firms often have such consultants or can provide referrals for consultants.
“Bottom line, use marketing and PR tactics that will yield more immediate traffic and sales inquiries,” Musel-Gilley said. “And remember, quality is always better than quantity.”
Dealers with pinched marketing budgets should consider the Internet first, Doak says.
“If you want to keep the cost down, I’d go digital with it,” he said. “If you have a little more money, I’d definitely do a direct mail piece and maybe go outside your direct customer list and try to grab some new people. I’d probably stay away from mass advertising on that and try to do it a little more direct.”
The government rebate money is a good example of why dealers should always have a contigency fund in their marketing plans, Doak says.
Something else to remember: Retailers will have to be vigilant in creating reasons to buy in an environment where reasons to save or pay off debts are being constantly broadcast over the media.
“The only way you can combat what’s going on in the news is to put together a campaign to address it and head on after it,” Doak said, “and go get that money.”

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