Long-time TTAC readers know of my sentimental fondness for Crain Communication’s Jamie LaReau. Now the first lady of automotive journalism has uncovered some interesting news about Lincoln’s continuing attempts to, like, do crazy stuff, man.
According to Ms. LaReau’s article in Automotive News, Lincoln is planning to revamp their dealer pricing strategy in January. Invoice prices will be raised 1 percent. Holdback — the old chestnut of domestic auto sales, an incentive between 2 and 3 percent of sticker price kicked to the dealers once a quarter or so — will be eliminated. Instead, dealer bonus payments will be handed out based on customer satisfaction index results and other nebulous factors.
The reason given for this change: BMW and Mercedes don’t have holdback, dontcha know, so Lincoln is going to get rid of it too. But that’s like me deciding to wear a satin dragon suit to the gig I used to do playing acoustic guitar at a restaurant during lunch. Jimmy Page wasn’t awesome because he wore a dragon suit; dragon suits are awesome because Jimmy Page wore one. Cause and effect. Can’t get ’em confused. This is the same kind of stupidity which leads to Cadillac chasing Burgerkonigring records. Dancing with a candy cane doesn’t make your ugly-ass hipster girlfriend Katy Perry. Beating BMW around a racetrack doesn’t make the tree-seeking ATS a panty-dropper like even the most prosaic Dreier $299/month lease special. Cutting holdback won’t make the MKS an equal driveway trophy to a 535i.
Since the dealers still need cash over and above the invoice/sticker difference in order to keep the lights on, Lincoln’s going to tie that cash to a variety of eminently stupid ideas — such as requiring that all dealers have a “Lincoln Brand Champion” on site. As a former dealership employee, your humble author can assure you that these ideas will last until dealers start missing checks because of them, at which point the dealer association is going to call the attorneys and shit’s gonna get real in a hurry.
In the meantime, there will certainly be some bizarre behavior as a result of the incentive programs. Way back in the dark days of 1994, your humble author was a salesman at an Infiniti dealership. Our equivalent of “holdback” was paid based on the results of a phone call made to the customer after the sale by Infiniti. The purpose of this call was to measure customer satisfaction. Well, we regularly dissatisfied our customers in every way possible, from screwing them on the trade to accidentally putting nine hundred and eighty-one miles on their car before they picked it up.
How’d we deal with this? Easy. We had our extremely sexy sales manager* bring each customer into the office. She would offer them a set of Infiniti-engraved coffee mugs to be delivered, by her, in person, after the call “turned out alright”. Somehow this worked. At the time I was too young and stupid to understand that the men buying these cars were extremely interested in having this woman visit their homes — but she was not, and therefore our dealership got the cash we needed to keep the Dealer Principal’s nose stuffed with that sweet, sweet coke. When the pixie-MILF was fired in favor of a 300-pound Polish gentleman, customer-sat numbers promptly headed down to the proverbial Challenger Deep. Lincoln appears to be just as naive as I was in 1994, so we’ll see how long it takes them to smarten up.
* So…. I took a moment from writing this article to Facebook-stalk the old sales manager in question. My G-d, she is still gorgeous, and she has to be every bit of 52 years old now. Kind of thinking about sending a friend request. What say you, B&B? Should I?