No More Discounts

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IN LATE DECEMBER the dealership I'd been mentoring had its launch meeting for 2008 (BTW: I hope you had yours already?) The theme of the meeting was "Enough is enough." The dealership had enough ofdiscounts. It prohibited associates frommaking any deals in any department.

Enough is enough — it's a bold statement and a bold action by a dealership, especially in a slow season and in a slowing market.

This dealer is a multiline motorcycle store, not all metric, not all Big Twin. Its location is not off the main highway, and it is notlocated by a well-traveled interstateoff-ramp. It does not have numerous OEM financing programs. What it does best was not being portrayed on a regular basis to its customers.

How could the customers quickly learn about this dealership without it having to give away the store? By giving them anoffer they'll have a hard time refusing. The dealership launched a value-added sales campaign called Vacation Celebration.

BUY A BIKE, GET A CRUISE

The store, in conjunction with a specialized travel agency, launched the VacationCelebration program to "reward" buyers without offering discounts. It's a program that has been done many times in the automotive dealer industry, but to my knowledge never before in powersports retailing. (If you've done a similar program, send me an e-mail and let me know about it.) In essence, the dealership purchased a certain number of vacation packages at a very attractive price, then offered these packages asincentives for customers paying full MSRP.

All of the dealership's departments were involved.

  • For sales, it was simple: Buy a unit at full price, and a customer qualifies for a vacation package.
  • For PG&A, buy a specified amount of parts and/or accessories (we chose a minimum of $1,000 for a singlepurchase), and the customer qualifies.
  • Buy any factory-recommended service of $1,000 or more to qualify.
  • Buy a minimum number of labor hours (yes, labor) at the regular rate to qualify.

When a customer met any one of the above criteria, he or she received the opportunity to choose one of three packaged vacations: a Caribbean cruise for two, a Las Vegas getaway, or a week's vacation in Cancun, Mexico. The store registered the customer, and a travel coordinator handled booking, administration, follow-up and trip scheduling. The limitations weren't that limited; trips could be taken eight months out of the year (i.e., not during busy travel seasons) with no expiration date.

We initially promoted the VacationCelebration program via the dealership's Web site. Then we met with the dealer's OEM co-op program managers, and used cable television ads and direct mail to further spread the word. Finally, each department manager instructed his staff to go back six months and call their personal trade (top customers), to alert them to this promotion.

The response was overwhelming. A good number of new models were sold during the first weekend. Best of all, the promotion was fun for the customer and the staff. Not once was that bad word — discount — uttered out of an associate's mouth. We know; the dealer principal kept careful watch.

The cost to the dealer to offer a vacation was less than $100 per qualifying purchase. Would you spend that amount to sell aunit, or $1,000 in parts, clothing, labor, accessories, extended warranties or even a prepaid maintenance plan? And it turned out to be a win-win situation: Thedealership got a huge bump in sales, and the travel industry was able to fill some empty rooms.

If you want to hear more about this program, contact me at the e-mail address below.

Steve Zarwell is a dealer consultant and manages the Dealernews20 Groups. Contact him at sbz_co@pacbell.net, orvia editors@dealernews.com.