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IMHO incentive base selling works..... Posted by Mike Lynch [Email]  (#81) [Profile/Gallery]
(more from Mike Lynch) on Wed, 5 May 2004 17:06:08
In Reply to: Why not drop prices?, davecl  [Profile/Gallery]
, Tue, 4 May 2004 05:23:40
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Particulaly for us underdogs. The big dogs like BMW, MBZ and Lexus can stick their chests out and be serious about their sticker price. Saab has to show a similar sticker to establish the value, but then incentives take over and close the deal.
When demand exceeds supply, no incentives. When supply always exceeds demand, mega incentives. Saab is pretty much always in the latter phase as are most of the "underdogs". Saab has found, like Saturn, that it can't make itself the exception in today's market.
Even the inventor of no hassle no haggle pricing, Saturn, has gone to incentives. The point being that the incentives were presented in a Saturn like manner, disclosed up front to everybody equally, unlike some Saab dealers who measure their customers (and their trade ins) first and can be stingy. Saab policy is to make the incentives private instead of advertising them so that consumers won't be taxed on them. Unfortunately this is handled poorly by some dealers and sales people.
Incentive base selling works. Upping incentives, or taking them off, has a dramatic effect on sales. It's a very effective way to control supply, I see it every year.
With lower residuals than BMW and MBZ, Saab would be a dead player in the leasing market with just low rates. Low residuals are actually and advantage for a lessee. A lower the residual/buyout is a good thing if you want to buy the car or not. So with incentives and low lease rates Saabs can have lower payments and lower residuals, a win - win for the customer. Saab has been fairly stingy with lease incentives up to now, but later in the model year the residuals have gone down, the rates have already been low, so the lease incentives have shot up dramatically to keep payments down. And now Saab's theme is "24/24", 24 month leases and 24 hour test drives.
Yea, in an ideal world your asking price should be what your really want, but the selling world is far less than an idealistic place. This is where a good Saab sales person can shine, helping potential Saab owners navigate through non-public incentives, the lease comparisons, and selecting the right car.
posted by 63.197.222...
, Tue, 4 May 2004 05:23:40, Wed, 5 May 2004 17:06:08 <-- Viewing This Message, Tue, 4 May 2004 13:32:05, Tue, 4 May 2004 10:21:02
, Tue, 4 May 2004 09:19:05
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