By on February 3, 2012

In 1992, the Ritz-Carlton chain won the Baldrige Quality Award for its excellence in customer service. Their idea was to write all customer preferences down, to feed them in a database and to henceforth deliver as expected.

Twenty years ago, I pointed this out to Volkswagen. I was VW’s customer service guru at the time and thought it was a swell idea. Volkswagen enthusiastically adopted the program. It was a failure, what do you expect from a company that retains me as a guru. Also, VW did not want to spend the money on a database. Instead, the Ritz-Carlton ended up running the hotel at Volkswagen’s Autostadt, and giving the occasional seminar to car dealers who still roll their eyes over the “gottverdammte Unsinn.”

Twenty years later, “Ford draws on luxury hotel experience for Lincoln overhaul,” writes Reuters, reporting that “in the plan to overhaul its luxury Lincoln brand, Ford Motor Co is embarking on a new approach, leaving behind the routine ideas of the auto industry and instead taking cues from the likes of high-end boutique hotels.”

Before that happens, Ford is reducing its dealer network to boutique size. Ford announced that it had reduced dealerships of its Lincoln luxury lineup to 325 from about 500.in the top 130 markets. That’s not all dealers, mind you. NASDAQ reminds us:

Ford began to expand its luxury Lincoln line-up at the cost of its Mercury line-up from late 2010. The company has suspended production of its Mercury branded vehicles in the fourth quarter of 2010 and started diverting resources from the brand towards its core Ford brand besides enhancing the Lincoln brand.

At that time, Ford had announced to eliminate a third of its 1,200 Lincoln dealers in the U.S., mostly in urban areas. The company has 700 dealerships in rural areas.

The automaker has asked the Lincoln dealers to upgrade their showrooms and services in order to meet the rigorous competitive standards. Dealers have revealed that the renovations would cost about $2 million per showroom.

Actually, at that time Ford believed that only some 300 Lincoln dealers have a fighting chance. Reuters reported in October of 2010:

Only about a quarter of Ford’s 1,187 Lincoln dealers now have the kinds of facilities that the automaker believes it needs to compete with luxury-market competitors.”

The call to investments met with lukewarm success. “More than half of all Lincoln dealers in the top 130 U.S. markets have committed to upgrade their facilities, creating a new sales and service experience for future Lincoln owners,” Ford announces today in a press release.

Careful, we are talking about the top markets again. Nobody even mentions the hordes of Lincoln dealers in the sticks anymore. They appear to be written off.

Also, out of the “more than half of all Lincoln dealers in the top 130 U.S. markets” only “seventy-five dealers in cities including New York, Los Angeles, Dallas, Philadelphia, Atlanta and Chicago already have completed new facilities or major facility renovations” says the press release. We are finally approaching manageable numbers.

From my days as a guru I remember what happens to dealers who don’t follow a manufacturer’s call to pour concrete according to the latest Corporate Identity guidelines: Their bonus payments dry up, the bank wants to see cash, car haulers dump duds on the lots and bring the sellers to the other guy. Sooner or later, all dealers will be up to standard – those who balked, died.

In the meantime, Ford is contemplating how to bring that high-end boutique hotel style to its surviving Lincoln dealers. The first ideas appear a bit pedestrian. Reuters says:

Ford is considering creating four or five standard “rituals” that can be employed by Lincoln dealers throughout the country. One example might be to ask each salesperson to provide potential customers with their personal cell phone number.

Wow. Just wow.

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35 Comments on “Lincoln Kills Most Dealers, Turns Remainder Into Boutique Hotels...”


  • avatar
    Paddan

    Lincoln is to Ford as Maybach was to Mercedes.

  • avatar
    Tstag

    Hmm does the look of a dealershow room make the difference? Or the proximity of the showroom when you need the car servicing?

    • 0 avatar
      micvog

      Both, but for me the dealer showroom is more important.

      I had narrowed a recent car purchase down to one of three models, including a Ford. The local Ford store (which is also a Lincoln store) is an embarrassment to the community; I had made an appointment to test drive a Fusion without ever having visited the store. Once I got there, I cancelled the appointment and left without test driving. It was that bad – think used car corner lot from the 80s. I ended up getting Subaru Legacy, the nearest dealer of which is 20 miles away. I was hours away from getting a new Passat, the nearest dealer of which is 40 miles away.

      Both the VW and Subaru dealership are owned by the same family. The facilities are clean/modern, but certainly not like a Ritz Carlton. The staff is friendly (although I would give the nod to the smaller Subaru store), always offering Cokes/bottled water or a cup of coffee from a Keurig machine. The waiting area has fresh baked cookies, free WiFi and a large flat-screen TV. Perhaps Lincoln should first try getting to that level.

      • 0 avatar
        tresmonos

        @micvog
        I never thought people like you existed until I spoke with people who work in Marketing deapartments. It’s a crazy notion to probably 80% of the readers of this site, but creature comforts and show room appearance do matter. I’m more of a function over form sort or person, but your point drives home the fact that most of these dealers sprung up from small town origins and are still operated by their founders or their founders’ children. For the Ford brand, I think that lineage is a great thing. But for a up scale consumer, I think it works against the mantra.

  • avatar
    Dynamic88

    What does the $2 million “investment” buy that would make me want a Lincoln? I’ll buy a Linc because I like the new ceramic tile on the floor? Or because of the fabric choice for the drapes? I mean really, all showrooms look like The Office, except with car ads and brochures all over the place.

    • 0 avatar
      michal1980

      I’m mixed on this. While I dont care much about what the dealership looks like. There are some new car dealers where I live who haven’t invested a penny in their dealership in 50+ years.

      Just driving by, it looks terrible. Like a run down used car lot.

  • avatar
    John

    Do the math, that’s $650,000,000 to improve Lincoln showrooms. Why not use the cash to improve Lincoln cars, or service?

  • avatar
    wstarvingteacher

    Had two lincolns from the 80′s during the 90′s. They were just Ford but with higher prices for everything. I felt foolish even then. I felt there was nothing that I was getting that I couldn’t have gotten with a crown vic.

    Guess this isn’t aimed at getting guys like me back into a lincoln.

  • avatar
    jeanpierresarti

    Hey Ford, how about, you know, making better cars? Right now all you give the public is alphabet soup named baleen whale grilled fake fancy looking mostly FWD crap. Sigh…these people get PAID to make these kinds of decisions?

  • avatar
    VanillaDude

    I drove Saturns for a decade. I bought five. So, I am someone who is interested in dealing with a quality dealership and having a relationship with an auto staff. Saturn got me into cars I would not have bought had I not had a close relationship with the dealer. I am not alone, nor is this a new phenomena.

    But we are talking Saturns, not Lincolns. What I expected from Saturn was exceeded due to a number of values and perceptions distinctly at that price level. While my friends, family and acquaintances whined about how they were treated at other dealerships, knowing I did not experience those things made me value my Saturn dealer more.

    I liked being ignorant about my vehicles. I didn’t want to know how they worked. I didn’t want to open their hoods. I didn’t want to get my hands dirty. I saw these cars as heartless appliances, and in the daily grind of life – I didn’t want a relationship with these cars. The third bay of my garage is for my auto beloved. The other two bays are for my Saturns.

    The bottom line however, were the cars. Sure, I could experience some problems with them, but I also had a dedicated staff of friends that would in each case, do hand stands in order to remedy those problems. For $25,000, I got a new car with a dedicated staff of super nice people who ensured I liked my car throughout the years I paid them off. For $25,000, that was a great deal. The cars were competent and so was the dealer.

    With Lincoln, we are talking about twice that. Not only are the cars twice as expensive, but my expectations are twice as high. What is twice as nice as what I got for $25,000? There is a limit here. You can only go so far with dealer experiences before they become damn annoying. My Saturn salesperson was a good friend when I needed her. She didn’t step beyond her traditional role and assume a level of friendship that didn’t exist.

    Good service froom good people is one thing. Becoming adopted by a dealer is quite another. Lincoln doesn’t have to turn each dealer into an Oprah Bed and Breakfast. It is unrealistic, but isn’t that where they seem to be headed here?

    Will Lincoln become the “Life Alert” in the auto business? Will it become the step before making out your funeral arrangements? At what point does service go from being unexpected, friendly thoughtful and pleasant, to wiping a dowager’s rump with a pre-warmed sanitary wipe? What does Lincoln think it can do to justify a $50,000 and up auto relationship?

    There is a limit.

  • avatar
    Gardiner Westbound

    Air Canada, aka the civil service airline, was going through another never-ending crises – more airplanes than customers. The Big Giant Head divined the solution was to spend $600-million painting the airplanes a different color. Didn’t help. The surly unionistas still believed they were doing passengers a favor by letting them fly on their airplane.

  • avatar
    340-4

    Huh.

    My local Lincoln dealership stocks, at most, at MOST, 1-2 models per year on the lot. The elderly blue-hairs that saw them as status symbols have died out; even the Cadillac dealership is no more.

    But the bigger point: they don’t have to stock Lincoln. In fact they are a Ford dealership too and they don’t have to stock many of those either. 20 years ago there were rows of Taurii and trucks; now, just an obligatory handful.

    Why? They also sell Toyota.

    If Ford can figure out how to deal with THAT sort of problem, well, they might sell more vehicles.

    Of course, I doubt Lincoln is interested in marketing to the unwashed in the flyover states, either, so I’m not sure why I care. Rich farmers and ranchers don’t seem to be in that big of supply…

  • avatar
    Dan

    As rarely as modern cars that aren’t European need servicing at all, why bother?

    Lincoln is only selling around 85,000 cars a year. Even over 10 years, 650 million in renovations is a significant premium per car.

    For a shinier dealership that customers will see for all of 30 minutes a year while getting their free oil changes.

  • avatar
    DDayJ

    “One example might be to ask each salesperson to provide potential customers with their personal cell phone number.”

    I don’t even like giving car salespeople my phone number. I certainly don’t want theirs.

    • 0 avatar
      th009

      Maybe not you … but when I bought my car last year, I did wish I had a more reliable way to get hold of my salesperson.

      • 0 avatar
        MrWhopee

        Why do you need to get a hold of your car’s salesperson for? To buy more cars? Or answers questions about operating some of the more complex features of the car? I can’t think of any other reason to get hold a salesperson after you’ve bought the car, well perhaps to yell at him/her if your new car leave you stranded in the middle of nowhere, to help occupy your time while you wait for the tow truck…

      • 0 avatar
        krhodes1

        Personally, I don’t even want to MEET the salesperson. My last two new car purchases were done primarily via e-mail. I did have to visit the BMW store a couple times to sign paperwork for Euro Delivery, but my new Saab purchase was entirely via e-mail and a couple phone calls.

        But I suppose unlike the average car buyer, I know EXACTLY what I want and how much I am willing to pay for it.

        And add me to the list of those who could not care less what the place looks like, my car will never see the inside of a dealer service bay once I have to pay for it. I have no interest in paying for tiled floors, capaccino machines, wifi, or pretty receptionists.

      • 0 avatar
        th009

        @MrWhoopee, “… to provide POTENTIAL customers …”

        Initially, I had questions about some special order items he needed to look into, and about ordering timelines. Later, after the order had been placed, I called him to get updates on the progress of the order.

        So these were either before I placed the order, or after I placed the order but before I took delivery. Have not called him since taking delivery, though.

  • avatar
    geeber

    The smacks of “Back to the Future,” and not the Michael J. Fox movie.

    In the 1930s, there were no standalone Lincoln dealers, and most rural Ford dealers did not want to carry a Lincoln Zephyr, let alone the expensive, custom-body Lincoln K-Series. Every now and then the company would ship a Lincoln or Zephyr to these rural dealers regardless of whether they wanted it, and the cars were a very tough sale in those areas (especially the K-Series Lincolns). Hence, Lincoln sales were limited compared to those of Cadillac or Packard. Lincoln was basically Edsel Ford’s toy.

    I’m trying to figure out Ford’s strategy here…obviously, Ford wants to get rid of any dealers who only held the Lincoln Mercury franchise (in Harrisburg, the two in this area were eliminated and the franchise was granted to the largest local Ford dealer about three years ago).

    Since future Lincolns will obviously be based on Fords, they don’t represent a huge investment for the company, so why limit the dealers that will carry them? It’s not as though Lincoln will be selling the 21st-century equivalent of 1930s K-Series – huge, expensive cars that cost more than a typical house and are only affordable to people living in the large metropolitan areas.

    And does it really make sense to have the SAME dealer offer very different levels of service to people based on the brand of vehicle they buy? Here in Harrisburg, at least, the Lexus franchise is separate from the Toyota franchise, so the Lexus dealer can get away with offering a higher level of service than the Toyota dealer.

    • 0 avatar
      th009

      “And does it really make sense to have the SAME dealer offer very different levels of service to people based on the brand of vehicle they buy?”

      Almost certainly Ford will be pushing the Lincoln dealers to have a physically separate showroom.

    • 0 avatar
      Wagen

      You bring up a good point with the Toyota vs. Lexus example. I’ve often wondered what the experience would be if a Camry V6 owner brought their car in for service to the Lexus dealer – would it be refused and pointed over to the adjacent Toyota dealer, or would they be treated with “Lexus” levels of care? Likewise, if the Lexus ES owner brought their car for maintenance to a Toyota stealership without a Lexus franchise, would their service experience be any different than a Camry owner who brought their vehicle there?

      • 0 avatar
        th009

        In a similar example, VW dealers can certainly service Audis — but cannot order Audi-specific parts. I would not be surprised if Toyota had similar policies.

        At a Toyota (or VW) dealer the customer would experience somewhat lower-grade facilities than at Lexus (or Audi) but most likely pay somewhat lower hourly rates for labour.

  • avatar
    peteinsonj

    What I’ve seen is that Acura & Lexus dealers do an amazing job, almost consistently. Mini, too (doesn’t have to be a luxury car).

    I have had several Saabs from the same dealer – as much because the cars were fun to drive as there was exceptional dealer service (and yes, for 1 of those Saabs… that was overly needed).

    So I bought a BMW from their sister dealership. What can I say — that dealership absolutely stinks — the sales experience was dreadful and every service trip is absurd.

    OTOH — my girlfriend’s family buys BMWs — from a dealer about 45 minutes away. When she talks about the level of customer service and how they handle her car — I feel like it must be a different brand.

    But I will probably never buy a BMW again — I’m not going to drive minutes to a better dealer. Too inconvenient.

    So — maybe, just maybe Lincoln can do this. Would that attract me to a dealership — to be greeted professionally & friendly, offered a cup a coffee, not badgered about sales or after my visit, — SURE.

    But — I cannot imagine me ever stepping into a Lincoln dealership in the first place — no vehicle has the remotest of interest to me. I’m an Infiniti, Saab, BMW, etc. buyer — sure I’d appreciate the great “hospitality” – but no Lincoln is even potentially on my radar as a buy.

    And as I think about it, other than a Lincoln Navigator — no one in the neighorhood has a Lincoln.

  • avatar

    each renovation should include a restaurant ’cause these no nothings are out to lunch.

  • avatar
    bobertbill

    I work for a Ford/Lincoln dealership- we would be classified as a larger smaller dealer or smaller middle sized dealer- if that makes sense.

    Our dealer has decided against the Lincoln Committment program due to the excess cost and still very murky view of future Lincoln products. We do some of the requirements of the LPE program- like car washes and service loaners- but others- 2 service advisors to every customer, specific Lincoln service drive and showroom- specific furniture are not practical.

    We have lost out on the bonus money(2%of MSRP) by not participating in the program. We were told to work deals like we always have and forget about the money.

    The result- Our 2011 Lincoln sales were up over 20% vs. 2010. Since opting out of the LPE program- our Lincoln sales are higher for the Sept- Jan period than the previous year. We are not starved of product,allocation is too much that we are passing on some stuff, and even the units we cannot get enough of(Navigator) from the factory we get from other dealers.

    Most of our sales are Fords, and there is no way our dealer would ever give up the Lincoln franchise. I suspect that is the way it will be with most dualed dealers.

  • avatar
    JMII

    We bought our (used) Volvo from a Volvo/Lincoln/Ford dealership and yes the facility itself was VERY nice. Lots of glass, light wood floors, modern furniture, excellent staff, good attention to detail, etc… kind of Apple-store-like. However the service department SUCKS! They are slow, un-flexible, not knowledgeable, etc… thus we will not be going back for routine work – and everyone knows the service department is the money maker in the car sales game.

    One complaint I have about EVERY car dealership I’ve been in is lack of FOOD. The purchasing routine takes HOURS: between the test drive, price negotiation, trade-in, insurance, financing and mountains of paper work. I’m starving and drained after the experience, would hurt them to have someone walking around with snacks and just handing them out constantly? One of the big furniture chains in our area does this, so when you testing out sofas you can sit down with a cookie and watch some TV, just like home – car dealers could learn a thing or two about making people feel welcomed into their “home”. Come on who doesn’t put out coffee and cake for a house guest?

    • 0 avatar
      naterator

      Doubtless part of the stragegy, no? If you’re hungry, and thirsty, and don’t want a stale Snickers, and don’t want to pay $1.75 for another lukewarm Fanta, because the vending machine is out of everything else, then you’ll be more pliable to their will just to get the hell out of there.

    • 0 avatar
      FuzzyPlushroom

      I have actually seen simple baked goods – muffins and such – at the local Honda dealership. Sure, they weren’t necessarily *fresh* muffins, but the thought counted for something.

  • avatar
    George B

    There is a stand alone Lincoln dealership about a mile from my house. Great place to get discount coupons for the Dallas Auto Show because they never run out and they’re never busy helping other customers. Not sure how they can stay in business. I just don’t get why people pay extra for a Ford with tasteless extra chrome.

  • avatar
    GS650G

    They should just sell cars on the internet and use the dealers for an occasionally walk in, a few test drives, and of course warranty repair.
    The public hates the car buying experience enough as it is, we don’t need wool rugs, wood doors, leatherette couches and bottled water brought to us.

  • avatar
    Bill A

    the “new” Lincoln can be successful if it simply copies the formula others have followed, including those mentioned in the article on on previous posts:

    1. Build beautiful vehicles on Ford underpinning, with perhaps unique engines specific for Lincoln vehicles. Most people are clueless about the details – They are attractive to styling, and if the handling and ambience are tweaked to the standard of luxury cars, regardless of underrpinning, they will be accepted. Lincoln should already know this, but 75%+ of clients are initially attracted by styling. One of the big problems with current Lincolns is styling – The front end looks like a baleen whale.

    2. Create a halo vehicle or two. If Hyundai can make an Equus, Lincoln should be able to make the equivalent or better for $65,000+. A sports coupe on an existing ford chassis is also an option. There is zero buzz around Lincoln, and these will start the conversation.

    3. Service and dealership look do matter. But these wheels have been invented.
    A. Steal Luxus’s service formula and implement it.
    B. They have probably developed their own dealership look if dealers have been asked to pay for it already, but I agree look does matter.

    4. Get the best advertising talent out there and create something exciting. Start with Peter DeLorenzo. He has been just a critic of car ads for so long I’d like to see challenged to come up with something that addresses the bland campaign now ongoing.

    I have heard that it takes a brand 10 years to overcome adverse public perceptions. If Ford is willing to make the commitment, it could be done with money and a strategy, both lacking until now.


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