Why do we think in terms of Miles Per Gallon (MPG) when we buy a new vehicle? MPG is an abstract measurement that requires the consumer to perform calculations in his head to determine the real impact of his purchase. The cost of filling up your vehicle and driving it for a specific period of time has a real economic impact on your wallet, while MPG is one step removed from providing any real value.
The estimated cost to drive a vehicle on a yearly basis would have much more impact on the buying decision. Most manufacturers base their warranties on driving a vehicle twelve thousand miles per year. Computing the fuel cost based a standardized annual Consumer Price Index (CPI) for fuel and driving twelve thousand miles per year would provide a far more concrete measurement of the cost of ownership then MPG provides.
Let’s look at an example. With gas at $3/gallon, a vehicle getting 15 MPG vs. one getting 20 MPG would show that the first vehicle would cost $2,400 to fuel per year, and the second only $1,800. Said another way, that is a difference of $600 per year, or $50 more per month, which has real meaning in terms of the customer’s budget.
In business, we often provide statistics to clients that, just like MPG, are removed from the real economic impact. For example, I saw an ad that read “Our Low-E windows reflect heat, saving you on your energy costs”. So what! It would be better to say “In a typical 2,000 square foot home, you can expect to save $500 per year on your energy bill by installing our Low-E Windows”.
Are you guilty of providing facts about your product or service that are removed from their true economic impact, just because that is what everyone else is doing?
