August 13, 2013

The fresh sell of luxury

Ford is teaching stale Lincoln dealerships how to appeal to the younger set.

The Associated Press

CHICAGO — How to sell a Lincoln in 2013: Make the dealership smell like luxury. And lay out some wine and cheese.

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Customers sit in the cafe area of Hines Park Lincoln, a dealership in Plymouth, Mich., that has been renovated to be more appealing to luxury buyers. The building is light and airy and has clusters of sumptuous leather seating.

The Associated Press

After decades of selling hulking Town Cars to retirees, Ford Motor Co. wants the Lincoln brand to appeal to younger, more discerning buyers. Lincoln unveiled the sleek MKZ sedan this spring, and six more models will follow. It purged underperforming dealerships and is prodding the rest to make expensive updates.

Now, Lincoln is teaching its dealers how to appeal to the $4 latte crowd.

This summer, Ford brought 60 Lincoln salespeople to a boutique hotel in Chicago to learn about the likes (art museums) and dislikes (stuffy old steakhouses) of the so-called "progressive luxury" buyer. It was the third of five regional training sessions.

Lincoln's target buyers -- hipper, more affluent, better educated and more female than its current customers -- are a mystery to many dealerships, some of which have been selling Lincolns since the 1930s. When a trainer in Chicago asks dealers the average age of their customers, one shouts out, "85." Their source of income? "Social Security."

One salesman puzzles over his choices when asked which Los Angeles hotel would appeal to the progressive customer: the Ritz-Carlton, the Palomar, W or Loew's?

"The only Lowe's I know sells hardware," he mutters.

Lincoln was one of the top-selling U.S. luxury brands for decades, but was neglected after 2000 as Ford bought other luxury brands like Jaguar. Luxury buyers flocked to competitors like Lexus and Mercedes-Benz, while Lincoln became a car for airport limo fleets.

Everything changed seven years ago, when Ford narrowly avoided bankruptcy and embarked on a major restructuring. It sold or shuttered its other luxury brands, including Aston Martin, Volvo and Mercury, and poured millions of dollars into Lincoln. And while Lincoln makes up just 3 percent of Ford's U.S. sales, it's still an important contributor to the bottom line because Ford charges a premium for the brand. The starting price of the Lincoln Navigator SUV, for example, is $17,000 higher than the base price of its Ford counterpart, the Expedition.

But it won't be easy to win back customers. In the first six months of this year, Mercedes-Benz -the top-selling U.S. luxury brand right now -- sold 151,452 vehicles in the U.S.; Lincoln sold just 38,288.

Ford believes new cars like the MKZ can lure young luxury buyers. With a $40,000 starting price tag, it's comparable to the Mercedes C-Class but has high-tech features like a touch-screen dashboard, automatic parallel parking and a panoramic glass roof. Ford's research shows that young luxury buyers are independent thinkers who are willing to take a look at Lincoln. To them, luxury means personalized service and small delights, like the animal-print bathrobes the Lincoln dealers found in their Chicago hotel rooms.

"Distinctive service is where these folks live," said Doug Fiedler, a trainer at the Chicago session who has worked for hotel chains like the Four Seasons. "They don't go to Nordstrom and see dirty counters."

Ford has issued specific guidelines for dealers to follow as they renovate their showrooms, right down to the specially developed Lincoln scent -- a fresh-smelling blend of Earl Grey tea, jasmine and orange flowers -- that should waft through the dealership.

The dictates have irritated some dealers, who don't want to spend the money until Lincoln has a full lineup of competitive vehicles. Ford is putting particular pressure on the 300 dealerships in the country's 130 largest metropolitan areas; so far, 70 percent of them have agreed to the renovations. In total, there are 923 U.S. dealerships selling Lincolns.

The company could try to shut down dealerships that don't agree to the million-dollar renovations. But this training isn't heavy handed. Instead of issuing demands, Ford wants to raise dealers' awareness to the level of their sophisticated new buyers.

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