Lincoln is right to help dealers who help it thrive
If you're going to be a player in the premium segment, you need to have your retail network positioned to match those of your rivals.
Lincoln's radical revision of its payments to dealers and its increased emphasis on its certified pre-owned program mean the brand is trying to reassert itself in the premium segment.
That's a step in the right direction for Lincoln, which has had a history of fits and starts in the premium space.
No longer will Lincoln dealers get an automatic holdback payment. Instead, dealers can get more money than they did previously but only if they comply with new standards designed to boost their sales of off-lease CPO vehicles and improve their online sales processes and vehicle-delivery execution.
Some dealers might not like the rules of Lincoln's new CPO program. But, at its core, dealers will make more money if they are fully onboard.
Dealerships not in the CPO program won't get holdback money. Dealerships that are in the program have the opportunity to succeed and make more money.
A good CPO program often provides a luxury brand's entry-level vehicle for many consumers. Maintaining that CPO program has a positive effect on many aspects of a dealer's business: It helps build residuals and increases the overall value of the brand in the marketplace.
With the change in the program, Lincoln's message to its retailers is clear: A dealer must be fully onboard with the brand's transformation if the dealership is going to benefit financially.
In many ways Lincoln is acting like its peers. Some dealers will like it; some will not.
But if Lincoln is to survive, it's the right thing to do.