Tag Archive | "consumer buying habits"

FTC Calls on States to Lift Direct-to-Consumer Sales Bans


LANSING, Mich. — The debate over whether motor vehicle manufacturers should be allowed to sell directly to consumers in the state has resurfaced after last year’s passage of a law that added tighter restrictions on direct-to-consumer sales. This time, the Federal Trade Commission has weighed in.

Reigniting the debate over direct-to-consumer sales of motor vehicles is a bill, S.B. 268, introduced on April 15 by Sen. Darwin L Booher (R-Evart, Mich.). The legislation, which is currently being considered by the Senate’s economic development committee, would allow Elio Motors and other manufacturers of three-wheel “autocycles,” to choose whether to sell directly to consumers, through dealers or through a combination of the two.

The legislation comes after last October’s controversial passage of legislation that was originally intended to prohibit vehicle OEMs from dictating fees a franchised dealer can charge customers. But thanks to a procedural loophole, state lawmakers were able to toss in a last-minute amendment without public comment or debate. And that amendment reinforced the state’s prohibition on selling vehicles directly to consumers, effectively banning Palo Alto, Calif.-based Tesla Motors, which called the law a “raw deal.”

Michigan Governor Rick Snyder urged lawmakers after signing the bill to discuss whether the franchise system and the state’s ban on direct-to-consumer sales were good for state consumers. “We should always be willing to re-examine our business and regulatory practices with an eye toward improving the customer experience for our citizens and doing things in a more efficient and less costly fashion,” he said at the time.

In January, Elio Motors rolled into Michigan to show off its new autocycle. Booher introduced his measure after Elio announced plans to build its three-wheelers at a former General Motors Plan in Shreveport, La., starting next year. He also requested comment from the Federal Trade Commission.

The federal agency responded in an 11-page letter issued to Sen. Booher on May 7. In the regulator’s view, according to the letter, “the bill does not go far enough.” It was signed by Marina Lao, director of the Office of Policy Planning, Deborah Feinstein, director of the Bureau of Competition, and Francine Lafontaine, Director of the Bureau of Economics.

“Rather, the narrow scope of the bill would largely perpetuate the current law’s protectionism for independent franchised dealers, to the detriment of Michigan car buyers,” read the letter, in part. “FTC staff believes Michigan’s consumers would more fully benefit from a complete repeal of the prohibition on direct sales by all manufacturers, rather than the enactment of any limited, selected set of exceptions.”

The FTC did not offer an opinion on whether the franchise model was superior or inferior to direct-to-consumer sales, but it did urge Michigan lawmakers to allow consumers to choose which vehicle they want and how to buy them.

The letter also noted that Elio Motors has accepted more than 41,000 reservations for its vehicle as of March 29. The company, the letter continued, also plans to have Pep Boys handle warranty service, as Elio does not intend to establish a dealer network.

On May 11, the FTC posted a blog authored by Lao, Feinstein and Lafontaine. It called on other states to lift bans on direct-to-consumer sales of motor vehicles. “FTC staff supports the movement to allow for direct sales to consumers — not only Tesla and Elio, but for any company that decides to use that business model to distribute its products,” the blog postread, in part. “Blanket prohibitions on direct manufacturer sales to consumers are an anomaly within the larger economy.

“Protecting dealers from abuses by manufacturers does not justify a blanket prohibition like that in the current Michigan law, which extends to all vehicle manufactures, even those like Tesla and Elio who have no interest in entering into a franchise agreement with any dealer.”

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Survey Says: Why Customers Aren’t Buying and What Might Convince Them


When it comes to the future, the only thing consumers know for sure is that they plan to keep being frugal. Marketing via e-mail has become a feast or famine situation. And when you decide not to call a job candidate’s references, you could be making a big mistake. Here’s a closer look at some of the latest small-business surveys, according to an AOL Small Business columnist.

Things Aren’t Looking Up

What do consumers think the future holds? Well, not a fat wallet, that’s for sure. According to BIGresearch’s Consumer Intentions & Actions Survey for July, the number of people who expect the economy to bounce back to pre-recession levels declined from nearly 45 percent a year ago to 36 percent today. Just over 32 percent say they don’t think the economy will ever bounce back fully, while about the same number are uncertain.

With such a mixed outlook, it’s no wonder BIGResearch reports consumers will continue to be “frugal and practical.” Projecting over the next five years, consumers say they will be considering purchases more carefully (49.3 percent) and will attempt to stick to a budget (46.7 percent). Just 12.5 percent of consumers say the economy will not affect their lifestyles.

While I’m personally optimistic about the recovery, I understand the hesitancy to spend. Like those in the survey, I’m putting off major nonessential business and personal purchases until the economy gets on a bit firmer footing. But I confess — I still love to shop.

Why the Message Counts

You need to design your marketing e-mails to get an immediate response — or you may never get a response at all, according to Experian Marketing Services. Almost half (47 percent) of transactions and 75 percent of opens and clicks occur within one day of an e-mail’s receipt, a new Experian study shows.

Customers tend to respond fastest to e-mails about business products and services. What you e-mail and the subject line also matter: Limited-time offers in subject lines get the fastest response (triggering 59 percent of transactions the first day), while coupons get a much slower response (36 percent of transactions occurring on day one).

Another good way to generate sales? Sending e-mails to customers who had abandoned their shopping carts gets 52 percent of them to buy within a day. Speaking as a frequent online shopper — discounts, limited-time and free shipping offers are all purchase incentives for me.

Don’t Believe the Hype

It’s likely you’re not making a lot of hiring decisions these days, so you need to be picky about the people you do bring on board. Before you make the final decision, make sure you check references. In a new survey from OfficeTeam, more than 20 percent of managers report changing their minds about promising job candidates after speaking to their references. What are managers asking when checking those references? More than one-third (36 percent) care most about the applicant’s past job duties and experience, while 31 percent ask about the person’s strengths and weaknesses.

It’s easy to get swayed by a great resume and a fantastic job interview — but it’s also simpler than ever to find out what people have really done and what they’re like to work with. Like lots of entrepreneurs, I tend to trust my gut, and when I find a candidate I really click with, I’m ready to hire him or her on the spot.

But that’s a big no-no these days. OfficeTeam’s survey shows that lots of candidates are stretching the truth about their skills, experience and strengths. As hard as it may be to curb your enthusiasm, slow down and take the time to do a little investigating before you welcome that new hire on board.

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