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The business press hasn't quite known what to make of GM's recent promotion, which offered consumers the same "insider" price on its showroom-languishing vehicles that it offers employees.

Was it a last-ditch, desperate effort to push cars that couldn't sell on their own? (By contrast, confident Toyota announced this week that it was actually RAISING prices on some cars.) Or was it an innovative marketing idea, an augury for others? And, in fact, Ford did follow suit.

It seems to me that GM has touched on something very powerful here but perhaps without fully understanding it. Marketers blather endlessly about creating an "emotional connection" with consumers. (I confess to being a sometime blatherer myself.)

What better way to create that bond than by treating consumers as part of the family? It welcomes new buyers, and is deeply confirmatory to current GM owners. This is key, because repeat business is the Holy Grail of automobile marketing -- and marketing in general. So the insider pricing works on two levels.

Trouble is, once you give the discount, you can't take it away. Either you're in the family or not. Either you have a real emotional connection or a manipulated moment.

By giving the promotion a short shelf life -- even with its extension it's still an event versus a practice -- GM has missed the opportunity to create an enduring relationship with at least current owners. A lifetime insider price for them would have been the right step -- and considering the value of a loyal customer, and the marketing cost of attracting new ones -- a smart economic one.

Last updated: Jul 30, 2005




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