Ford angering Lincoln dealers with controversial stair-step incentives
Fri, 06 Sep 2013
Lincoln is having a rough year, but at least its sales volume increased 0.63 percent in August 2013 compared to the same time last year. To spur sales of its luxury brand, parent company Ford is resorting to a stair-step incentive program in Washington and New York through September 30, says The Detroit News. According to the report, this type of of program is unpopular with dealerships because, as Don Chalmers, owner of Ford and Lincoln dealerships in New Mexico, says, "They're confusing to the market, they're not necessarily good for customer satisfaction, and when you see a burst of sales at the end of a stair-step program, there's always a payback. Right after that, the sales dip."
To be clear, a stair-step program is one in which incentives are provided to dealers based on number of sales. The bonuses usually come in tiers – $500 per car for the first ten over the course of the program, $1,000 per car for the next ten, and so on – hence the stair imagery.
They also seem somewhat controversial at Ford, with Ken Czubay, the automaker's vice president of US marketing, sales and service, reportedly saying Ford doesn't run stair-step incentive programs and Erich Merkle, a sales analyst, claiming that the program applies only to select Lincolns. 2013 model year MKS, MKX and MKT are the only Lincolns that qualify dealers for the incentives, which are realized as bonuses ranging from $1,000 to $1,500 for each unit sold. The more sales thresholds that are passed, the more bonus money the dealer gets for each car.
It's worth noting that during stair-step programs, discounts are often bigger than usual, and trade-ins can be worth more, so if you're in the market for a Lincoln and you live in Washington or New York, it's probably a good time to look for deals.
By Damon Lowney