Lincoln brand introducing dealers to luxury buyers
CHICAGO (AP) — How to sell a Lincoln automobile in 2013: Make the dealership smell like luxury. And lay out some wine and cheese.
After decades of selling hulking Town Cars to retirees, Ford Motor Co. wants the Lincoln brand to appeal to younger, more discerning buyers. Lincoln unveiled the sleek MKZ sedan this spring, and six more models will follow. It purged underperforming dealerships and is prodding the rest to make expensive updates.
Now, Lincoln is teaching its dealers how to appeal to the $4 latte crowd.
This summer, Ford brought 60 Lincoln salespeople to a boutique hotel in Chicago to learn about the likes (art museums) and dislikes (stuffy old steakhouses) of the so-called “progressive luxury” buyer. It was the third of five regional trainings sessions.
Lincoln’s target buyers — hipper, more affluent, better educated and more female than its current customers — are a mystery to many dealerships, some of which have been selling Lincolns since the 1930s. When a trainer in Chicago asks dealers the average age of their customers, one shouts out, “85.”
One salesman puzzles over his choices when asked which Los Angeles hotel would appeal to the progressive customer: the Ritz-Carlton, the Palomar, W or Loew’s?
“The only Lowe’s I know sells hardware,” he mutters.
Lincoln was one of the top-selling U.S. luxury brands for decades, but was neglected after 2000 as Ford bought other luxury brands like Jaguar. Luxury buyers flocked to competitors like Lexus and Mercedes-Benz, while Lincoln became a car for airport limo fleets.
Everything changed seven years ago, when Ford narrowly avoided bankruptcy and embarked on a major restructuring. It sold or shuttered its other luxury brands, including Aston Martin, Volvo and Mercury, and poured millions of dollars into Lincoln. And while Lincoln makes up just 3 percent of Ford’s U.S. sales, it’s still an important contributor to the bottom line because Ford charges a premium for the brand. The starting price of the Lincoln Navigator SUV, for example, is $17,000 higher than the base price of its Ford counterpart, the Expedition.
But it won’t be easy to win back customers. In the first six months of this year, Mercedes-Benz —the top selling U.S. luxury brand right now — sold 151,452 vehicles in the U.S.; Lincoln sold just 38,288.
Ford believes new cars like the MKZ can lure young luxury buyers. With a $40,000 starting price tag, it’s comparable to the Mercedes C-Class but has high-tech features like a touch-screen dashboard, automatic parallel parking and a panoramic glass roof. Ford’s research shows that young luxury buyers are independent thinkers who are willing to take a look at Lincoln. To them, luxury means personalized service and small delights, like the animal-print bathrobes the Lincoln dealers found in their Chicago hotel rooms.
“Distinctive service is where these folks live,” says Doug Fiedler, a trainer at the Chicago session who has worked for hotel chains like the Four Seasons. “They don’t go to Nordstrom and see dirty counters.”
Ford has issued specific guidelines for dealers to follow as they renovate their showrooms, right down to the specially developed Lincoln scent — a fresh-smelling blend of Earl Grey tea, jasmine and orange flowers — that should waft through the dealership.
The dictates have irritated some dealers, who don’t want to spend the money until Lincoln has a full lineup of competitive vehicles. Ford is putting particular pressure on the 300 dealerships in America’s 130 largest metropolitan areas; so far, 70 percent of them have agreed to the renovations. In total, there are 923 U.S. dealerships selling Lincolns.
The company could try to shut down dealerships that don’t agree to the million-dollar renovations. But this training isn’t heavy handed. Instead of issuing demands, Ford wants to raise dealers’ awareness to the level of their sophisticated new buyers.
In one room, dealers try to identify a dozen different scents, like pine and lemon. Luxury buyers, they learn, are used to custom scents in hotels and stores and might be put off by a dealership that smells like motor oil.
In another room, dealers sit on chairs of various comfort levels and learn that customers often opt to spend more money when they’re sitting in a more luxurious chair. In the hotel’s restaurant, the head chef has them sample three kinds of salt to spark a discussion of the flavors they’re providing in their dealerships. Instead of grilled hot dogs, their trainers gently suggest, dealers might offer a wine and cheese night. The chef recommends an aged cheddar.
Although new to Lincoln, this kind of training isn’t unusual in the auto industry. At Audi, it’s called Kundenbigeisterung, German for “inspiring customer delight.” Jeri Ward, director of customer experience for Audi in the U.S., says her brand has been down this same road, with dealer renovations starting five or six years ago and a big push for dealerships to move upmarket when the new A8 sedan arrived in 2011. Last fall, over a four-month time frame, Audi hosted various events for all of its 12,000 U.S. employees.
Ford won’t say what it’s spending on the Lincoln training or on incentives to remodel its dealerships. But Mercedes and its dealers spent $1.6 billion over the last five years upgrading its 360 U.S. dealerships, said Harry Hynekamp, Mercedes’ general manager of customer experience in the U.S.
“This work is literally never done. A box of chocolates isn’t going to do it,” Hynekamp said.
At Lincoln, the training has more urgency. Luxury buyers don’t need to be convinced that Mercedes and Audi are luxury brands. But the Lincoln training begins with a stark warning: If you can’t sell Lincolns to younger buyers, the business is at risk.
The training is already having an impact. A few weeks after the Chicago session, attendee Ryan Kolb greets a longtime customer coming in for service at Hines Park Lincoln in Plymouth, Michigan. When the customer mentions he likes Kolb’s Lincoln polo shirt, Kolb strolls into the dealership and gets him one.
Kolb’s dealership — started by his grandfather — has been at this location since 1973, and so have many of his customers. Among the cars on the lot is a powder blue 1978 Lincoln Continental coupe, recently traded in for a new MKS sedan.
The dealership was remodeled last year according to Ford’s specifications. It’s light and airy, with private offices behind dark wood panels and small clusters of seating with sumptuous white leather furniture. There are fresh orchids at the reception desk and fresh cookies in the small cafe. The Lincoln scent is there, as well as 60 noise cancelling speakers hidden in the ceiling that drown out the noise from numerous flat-screen TVs showing golf and news. It looks like a luxury hotel, especially compared with the dated Cadillac dealer next door, where gaudy sale signs and stuffed animals dangle from the ceilings.
Kolb won’t divulge what he spent on the renovations, but says the furniture cost more than his house. That irks some longtime customers, who have told him that he should have offered more discounts instead of redecorating. But other customers like the new space so much they come and meet friends here. Service appointments are growing.
“The best thing I hear people say is, ‘It doesn’t feel like a car dealership,’” he says.