Costco-GM promotion proves value of 90-day sales drives

A 90-day sales drive beats a 60-day one. By a lot.

That's the lesson from a 90-day sales promotion between General Motors and Costco Auto Program that ended Jan. 2. It generated more than 15,200 new-vehicle sales, three times more than a similar 60-day program a year earlier, the warehouse retailer says.

Survey data gathered during the promotion also revealed that 40 percent of the Costco members who bought vehicles under the program became first-time owners of a Buick, Chevrolet or GMC vehicle.

Costco has conducted several 60-day deals with other automakers. But in the future, it's likely to do more of the longer programs, says Gina Paolino, president of Costco Auto. The extra month gives the warehouse giant more time to build advertising and marketing momentum, resulting in incremental sales at dealerships participating in the Costco program, she says.

'The extra 30 days really helps'

"There are reasons to do 60-day promos and we've done a lot of 60-day promos, but I think we are looking toward more 90-day," Paolino says. "Our first 90-day promo was with Subaru. We were projecting sales of 6,100 and we sold over 10,000. Having the extra 30 days really helps out."

The latest deal between Costco Auto and GM started Oct. 2. It allowed Costco members to buy certain Buick, Chevrolet and GMC vehicles through select franchised dealers at a so-called "preferred price" -- generally equal to the price that the automaker offers its suppliers' employees. Costco members who took advantage of the program could combine the lower prices with other GM rebates and incentives for which they were eligible.

Costco members who bought an eligible vehicle in the program and completed a survey about their purchase also received a $500 Costco Cash Card.

New 2012s, 2013s

Eligible new vehicles included the 2012 and 2013 Buick Enclave, LaCrosse and Verano; Chevrolet Camaro (excluding the ZL1 version), Cruze, Equinox, Malibu, Silverado and Traverse; and GMC Acadia, Sierra and Terrain.

GM and Costco Auto conducted a similar 60-day program from Nov. 1, 2011, though Jan. 3, 2012, which included 2011 and 2012 Chevrolet and GMC trucks only. That promotion generated more than 5,000 new-vehicle sales, Paolino says.

Ruston Reynolds, a sales director at Henry Brown Buick-GMC in suburban Phoenix, says sales leads from Costco Auto were about 2½ times higher than usual each month during the promotion. About 80 percent of those leads -- or roughly 150 -- resulted in a vehicle sale, he adds.

He says the preferred price coupled with the available rebates and the Costco Cash Card makes the program particularly attractive to consumers.

'Real easy'

"If you have a trade-in, all you have to do is negotiate the trade," says Reynolds, who handles referral programs for the store. "It's real easy."

The Costco Auto Program, started in 1989, arranges no-haggle prices on new and certified used vehicles for its members.

Costco, of Issaquah, Wash., has 448 warehouse stores in 41 states plus Washington, D.C., and Puerto Rico. Members pay annual fees of $55 or $110 to shop for a range of products at discount prices.