Incentive - February 2009 - (Page 22) COVER STORY AUTOMOTIVE CHALLENGES Unattainable Numbers Sales incentive goals set a year ago are virtually unachievable, reducing their motivational value. Plummeting Sales Car sales dropped from 17 million to 12 million in 2008, in part because financing is nearly impossible to find and in part because buyers are too worried about losing their jobs—and their plummeting 401(k) and home values—to spend money on a new car. Staying Alive U.S. automakers are struggling just to survive, tempting them to cut the cost of dealer incentive trips and launches—many canceled them in August or September. Incentive’s Editorial Advisory Board Weighs In SOLUTIONS • Switch to tiered incentive programs that offer auto dealers rewards at several levels, rather than an all-or-nothing, 100 percent to get the trip. • Focus on training incentives so salespeople are better equipped to close sales with the customers they do get. Audi is requiring that salespeople take an online training course and be certified before they qualify for the incentive program on its newest offering, the 2009 Q5 compact SUV, according to Barry LaBov of LaBov & Beyond. • Aggressively reach out to new and existing customers with consumer promotions. Hyundai’s latest campaign offering to take back a new car if the buyer loses his or her job is a creative example. • Keep or expand customer service programs to prevent longtime customers from switching brands at a time when personal finances are spurring bargain hunting. One program that has not been eliminated or even reduced is the GM Standards for Excellence customer satisfaction program, says Mike Spellecy of Maritz. • Focus incentives on other areas of profit, such as servicing cars people are keeping longer or selling certified pre-owned cars that represent a better bargain to the buyer. LaBov notes that one auto client’s new car sales are down 35 percent, but service is up 6 percent and certified pre-owned sales up 18 percent. Terry Markwart, director and assistant general manager of U.S. sales, Canon USA From an incentive industry perspective, how is this economic crisis different from the downturns of the ’80s and ’90s? This is not the first time we have experienced a challenging economy. What is different about this one is that we are smarter and have learned from the past. So with this knowledge and experience we need to create a new vision, develop the plan, set the goals, put the strategy in place to make it happen. If you do nothing, nothing will happen. It is an opportunity to re-evaluate and create a better vision. Those who manage it well will be rewarded. What are you recommending your clients do to respond to the economic situation? Branded merchandise will be important. The end user wants a quality, stylish, brand-name product with value that they really want but would not buy for themselves. If we want to make a difference, we have to define the challenges, recognize the needs and create the opportunities. Q: A: “ The whole [2009 North American International Auto Show in Detroit last month] was about electric cars. Beginning in 2010 [and running through 2012], all the car companies have plans to launch electric cars—we’re already contracted for the GM Volt launch—and they will have to hold internal and external product launches” to introduce them to buyers and dealers. —Fay Beauchine, Carlson Marketing Q: A: 22 | Incentive | February 2009 | incentivemag.com http://www.incentivemag.com
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