Kawasaki extends Costco referral program, dealers may include other brands

Publish Date: 
Jul 17, 2013
By Mike Vaughan

KAWASAKI HAS NOTIFIED dealers participating in the Costco referral program that they can continue to display and distribute literature at Costco locations -- and can extend the pricing program to other vehicle brands they might carry.

In 2009 Costco and Kawasaki teamed up to test the validity of Costco’s successful automobile purchase program in the powersports market. In June 2011, after a year of experimentation, the program was formalized and rolled out across the country with Kawasaki as the exclusive partner.

"Seventy percent of the member referrals have never been to the referred dealership, 38 percent have not previously owned a powersports product in their life and 67 percent are first-time Kawasaki purchasers. Sixty percent purchased accessories and apparel and 41 percent purchased extended service contracts."

-- Jeff Skeen, Affinity Development

Kawasaki recently notified dealers that its agreement with Costco will be continued and expanded to cover other brands the dealer might carry. In other words, a Kawasaki dealer handling Honda, Yamaha, KTM or any other brand can take advantage of the Costco pricing offer to the benefit of those brands; however, the dealer will not be able to display them at its designated Costco.

If there are no participating Kawasaki dealers within a 50-mile radius of a Costco warehouse, non-Kawasaki dealers carrying other brands will be invited to participate and will be able to display their chosen brands at the specified Costco. Non-Kawasaki purchasing customers, however, do not qualify all benefits, such as a $200 Costco Cash card.

Participating dealers are charged a handling fee based on the number of brands being offered under the provisions of the program and the number of Costco locations in which they have a presence. Kawasaki will co-op 50 percent of the fee for their Kawasaki participation.

Kawasaki dealers currently have representation in about 250 of the roughly 400 Costco outlets in the United States. Costco’s goal is to have 100 percent coverage by the end of the year and is looking to expand the program into Canada in 2014.

According to Jeff Skeen, general manager at Affinity Development, the company that manages the program for Costco, additional Kawasaki coverage will not only provide Kawasaki an expanded potential customer base but also will allow Costco to increase its marketing efforts to cover all of their 45 million members.

"Seventy percent of the member referrals have never been to the referred dealership, 38 percent have not previously owned a powersports product in their life and 67 percent are first-time Kawasaki purchasers," Skeen said. "Sixty percent purchased accessories and apparel and 41 percent purchased extended service contracts.”

According to Kawasaki, the typical participating dealership receives an average of about 10 referrals a month, although several dealers Dealernews spoke to report much higher numbers, depending on the season. As an example, Angela Annamalai of Shelby’s Powersports, in New York's Bronx, said they receive as many as 15 referrals per month based on their two Costco display locations, Manhattan and New Rochelle, with a conversion rate of about 10 percent. (continued)