Extra month pays off for GM-Costco promo
General Motors and Costco agree: A 90-day sales drive sure beats a 60-day one.
A 90-day sales promotion between GM and Costco Auto Program that ended Jan. 2 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.
"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 Costco Auto-GM program began 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 GM 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.
Ruston Reynolds, a sales director at Henry Brown Buick-GMC in suburban Phoenix, says sales leads from Costco Auto were about 2 1/2 times higher than usual each month during the promotion. About 80 percent of those leads 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. "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."
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