Rev up sales of luxury sedans

A luxury automotive manufacturer had been experiencing a drop in sedan sales as customers shifted their attention towards SUVs and trucks. The market was still ripe; it just required a fresh focus. The company partnered with us to help reignite their luxury sedan sales. BIW designed a program that addressed their challenges in a simple, affordable and highly effective way.

Steering results through smart design

To understand why this program produced such impressive results, there are some key dynamics to consider. In the car industry, cash is king. For most sales promotions, sales managers receive extra cash for achieving certain types of sales. In this case, we disrupted the status quo with an entirely different approach.

Instead of cash, sales managers had the chance to win a luxury vacation for two to Los Cabos, Mexico with 50 winners nationwide. This shift had multiple benefits. First, behavioral economics research confirms that earning a memory-packed, emotion-filled experience can be far more motivating than cash which can get lost in the mix of daily financial obligations. Because this reward was so different from the usual incentives, it stood out as exciting and special.

In addition, this particular group of dealership managers hadn’t met face-to-face in some time, and the chance for a shared experience with other top performers – including a prestigious recognition dinner – was highly motivating for them.

Another dynamic at play was having each dealership competing as a team instead of defaulting to rewarding reps for individual performance. Winning dealerships would then choose who on the team would receive the vacation package.

To account for differentials in size, market and sales capabilities, larger dealerships were given more opportunities to win than smaller dealerships. Pitting like performers in head-to-head competition gave everyone a chance to earn. Instead of competing against the entire pool of 710 dealerships, each dealer competed in one of four quartiles based on their sedan sales the previous year at the same time. By leveling the playing field, the competitive spirit was amped up.

Finally, instead of running the program for the typical one or three months, the program ran for five months, building traction and momentum throughout the program with a steady stream of communications and performance updates.

Where the rubber meets the road

• 15,000+ sedans sold during the five-month incentive period compared to 2,000 in the two months leading up to the program.
• Monthly sales increased 250%.
• Sales doubled compared to what they were two months before the program began.
• Had this been a typical cash-drive program, the budget would have soared to $3 million in cash incentives; these results were achieved at one-fifth of that cost.