DETROIT -- For Lincoln and its dealers, 2013 was a tumultuous year.
The brand found itself launching a series of initiatives aimed at transforming the luxury experience at dealerships while coping with the botched launch of the MKZ sedan.
"2013 was an incredible year of learning for the entire brand team," says Kevin Cour, Lincoln sales and service operations director. "We started off with our MKZ launch delays. That's our No. 1 vehicle. When we launched the car we were able to claw back almost all that volume."
The MKZ arrived in stores about three months later than planned. Lincoln's overall sales for the year were down about 1 percent in a luxury market that was up more than 10 percent. But Cour says some of Lincoln's actions to change the retail experience are beginning to pay dividends for dealers.
"We restructured the invoice and introduced all new standards relative to the CPO [certified pre-owned] sale and off-lease retention," he says.
Last January, Lincoln discontinued an automatic payment to dealers, known as holdback, of 2 percent of the vehicle's sticker price. Instead of holdback, Lincoln offered to pay dealers up to 6.5 percent of the invoice if they meet standards set by the brand for improving customer service. Those standards include training Internet salespeople, responding quickly to Internet leads and having a Lincoln "brand champion" on hand at stores dualed with the Ford brand.
"With flat new-car volume, the invoice changes helped dealers increase their profits by 30 percent," Cour says.
"The reason why we care is that in the luxury business we have to sell them twice," Cour says. "Only Lincoln dealers should control the used-vehicle retail market" for the brand.
"A consumer will pay more for a used Lincoln at a Lincoln dealership than at Joe's Used Cars," he says.
That's a setup that leads to higher used-car prices and higher residuals. Lincoln's certified pre-owned sales rose 12 percent in 2013, according to the Automotive News Data Center. In addition, the share of off-lease Lincolns retained by the dealer network jumped from 43 percent in 2012 to 60 percent in 2013, Cour says.
With a more robust pre-owned program, dealers will be encouraged to spend more to recondition them, he says: "Those programs are having exactly the effect we intended them to have."
Other programs Lincoln launched in 2013 that continue this year:
- Lincoln Dealer Academy: The hospitality training program had 170 dealerships participate in 2013. This year 60 more stores are to take part.
- Date Night. Lincoln began letting prospective customers borrow a Lincoln from a dealership for an extended test drive and a dinner paid for by the brand.
"It has been a wonderful conquest tool," Cour says. "Two-thirds of the people are conquest shoppers. The closing rate for those dates is at 8 percent, which is considerably higher than a normal lead."
- Concierge. Lincoln offered a con-cierge service to customers in which the brand offered prospective customers a chance to interact with a Lincoln specialist via text, phone or video to help configure their vehicles. The concierge service averaged about 2,000 "engagements" with customers per month, Cour says. The 20 Lincoln specialists operate in a call center in Melbourne, Fla.
"From an operations perspective, concierge is a competitive advantage for us," he says.
- Lincoln brand champion. Lincoln has 454 brand champions, or salespeople who are specially trained in Lincoln's lineup, in its stores. Last January, Lincoln said it would pay salespeople up to $500 per Lincoln sold every month, part of an effort to separate the Lincoln customer experience from that of the volume Ford brand. Lincoln has committed to paying the bonuses for three years.
"There will come a point where we don't have to do a performance bonus" as the brand gains strength, he says.
Cour offered no more details on Lincoln's Black Label program, which will feature a series of luxury trim levels and will be sold only in dealerships that agree to a set of customer handling standards. The program is to roll out at year end.