Curious Thoughts from Curious Minds: What Marketers Can Learn from "Cash for Clunkers" - Kasha Cacy - MediaBizBloggers

The Cash for Clunkers program came to a close last Monday night. According to the Transportation Department, the program generated nearly 700,000 new car sales in a little over a month.

While the debate whether the program helped the economy will rage on, from a marketing perspective the program has had some interesting results. According to a study done by Kelley Blue Book www.kbb.com, the program drove demand (in-market shoppers considering buying a new car rose from 12% in July to 20% in August) and drove brand consideration (manufacturers offering Cash for Clunkers-specific incentives saw 40%-50% increases in brand consideration).

Could it be that marketers could learn a thing or two from the Federal Government?

Lesson #1 – Consumers may be looking to spend again

The Bureau of Economic Analysis reports that the personal savings rate, having peaked in May at 6.2%, declined to 4.6% in June. Perhaps Americans, tired of scrimping and saving, are opening up their pocketbooks again? Recent data from UM's Econocurious Survey give further indication that American belt tightening is actually loosening up. While frugality and savings are still important, Americans seem to be slightly less focused on it, with all major savings strategies down on average about 5%. For the brave among us, this may be the right time to get ahead of competitors and position ourselves to take a larger chunk of the spending rebound.

Lesson #2 – Everyone will feel the recovery – just not in the same way.

Our Econocurious research has consistently shown that younger people have felt the impact of the recession much less than older people. This isn't surprising given that older consumers tend to have more invested and more to lose in the primary areas affected by the economy – the stock market and housing market. The same will likely be true of the recovery – some segments of the population will feel it sooner than others. These are the times when staying close to your consumer is critical.

Lesson #3 – Consumers are looking for an excuse

While consumers may be looking to spend again, they will need a push to get them over the hump. Cash for Clunkers was the perfect combination of financial incentive ($4,500), emotional incentive (helping the environment) and urgency (the money running out, being replenished and running out again), all of which gave consumers a really good reason to act now (a lesson direct marketers have known for years, by the way). As marketers, we'll need to employ similar incentives to push people into pulling out their wallets. But the good news is that if done right, there is evidence that consumers will bite.

So maybe it's time for marketers to stop being so pessimistic and start working hard for the consumer's dollar. If the feds can do it, why can't we?

Kasha is EVP, US Director of Communications Planning at UM. Kasha is responsible for building and leading UM’s communications planning practice across the US and identifying relevant and engaging ways of connecting brands with consumers.

Read all Kasha's MediaBizBloggers commentaries at Curious Thoughts from Curious Minds - MediaBizBloggers.