Mazda dealers crank up sales and service to earn factory bonus cash
LOS ANGELES -- Mazda dealers are sharpening sales and service efforts to earn cash bonuses from the factory.
Mazda's Dealer Performance Program, which began in July, sets quarterly targets for new-vehicle sales, certified pre-owned sales and service retention that dealers must hit to qualify for bonus cash. The previous bonus program rewarded dealership improvements.
Dealers who hit all the targets and have exclusive Mazda dealerships or stand-alone showrooms, can earn as much as $500 per vehicle sold during the quarter.
"I look at it as free money. Do a good job, and you get paid," says John Gauvey, general manager of Mazda of Wesley Chapel in Wesley Chapel, Fla. He says that hitting his store's performance targets for the quarter that ended Sept. 30 earned the dealership a $79,000 bonus.
Pay for performance
Gauvey likes bonuses tied to sales performance. The program encouraged him, for instance, to push his staff to sell more certified pre-owned Mazdas in the third quarter.
"We didn't sell as many CPO in the past because there was nothing there to help me. That's really what it's designed to do -- put more cars on the street," Gauvey says. "It really pays for performance based on being a better dealer."
John Patterson, president of OC Mazda in Tustin, Calif., says his staff is doing more service e-mail and direct-mail marketing to help hit his service retention targets.
"We're more intently focused than ever before in getting back customers that haven't been in the store for more than six months," Patterson says.
Staffers are tailoring service pitches aimed at bringing back, for instance, CX-9 crossover customers, he says.
"It's really about focusing on knowing our customer and what they might need," Patterson says.
Michael Morais, a longtime Mazda dealer and COO of Open Road Auto Group in New Jersey, says his group has increased service-oriented advertising as a result of the program.
"It is a very engaging program. It has our whole team watching service loyalty, along with the other components," Morais says of the dealer performance program.
Before the program, Mazda dealers who had built factory-approved "Retail Revolution" image stores were paid bonuses. Dealers could earn as much as $300 per new car sold.
Mazda spokesman Jeremy Barnes says the new program aims to encourage Mazda dealers to improve all aspects of the dealership experience for consumers, rather than just reward investment in the store.
"We know that a customer who is happy with their service experience is more likely to repurchase than one who is not," Barnes wrote in an e-mail.
"We know, also, that a dealer who exceeds their sales goals is more likely to attract and keep the very best sales professionals, and we know that that also leads to customers returning to repurchase."
'You can do better'
Michael MacDonald, chairman of Mazda's national dealer council and owner of two Mazda stores near Salt Lake City, says, "You can do better under this program" than under the Retail Revolution bonus program.
He says Mazda developed the dealer performance program with input from the dealer council, but acknowledges that some Mazda dealers are critical of the program.
MacDonald says, "You have to meet the objectives and you have to work for them. Are dealers going to be polarized on it? Yes."
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