Again, from the Checker Motors public relations depart we find an interesting article about Checker Motors sales incentive programs from the early 1960’s. Checker clearly was experimenting and the PR department was more than happy to collaborate with Premium Practice Magazine. Published in October of 1965, this was published when David Markin was the VP in charge of Sales and Marketing. The executive interviews in article do not identify the quoted executive but it’s probably safe to assume that it’s indeed David Markin.
Building a Dealer Sales Forces
Premium Promotion Magazine, October 1965
How can a small producer find the successful sales promotional too to establish itself in a well established highly competitive multimillion dollar market? This is the problem that faced Checker Motors Corp. Kalamazoo when it decided to move seriously into the consumer market after years of producing exclusively for the taxicab field.
The automotive industry is perhaps the most promotion minded business in our economy, certainly in relation to dollar volume and the relative frequency of individual purchases. This includes, for the big companies, both sales incentive programs of the most elaborate sort and extensive consumer programs contests traffic-builders goodwill gifts in fact just about every type of incentive conceivable.
The story of the better known producers has been told in these pages in great detail from time to time, as in the last October issue. This is the story of incentives use by the only small automotive passenger car producer still operating in the country with any significant standard car production.
Incentives have frankly not yet played an important part in Checker merchandising. This can be attributed in considerable measure to the obvious problems that a small company seeking to capture its share of the great automotive market must face.
A very few programs have been tried and a first experimental venture into consumer slanted traffic building has just recently been initiated on a limited scale. results are not numerically impressive compared to reports from the great car companies but these early steps indicate a company spirit ready to work with such programs on a suitable cases as conditions may permit.
The very newness of Checker sales force, which is still in process of building, has been a principal reason for directing incentive efforts toward the sales organization itself rather than towards the consumer, and at the same time accounts for the somewhat limited efforts to date. Some consideration of Checker’s small competitive productions suggest that the great programs found at all the other companies can not feasible be undertaken.
Checker’s production of passenger cars represent only a small fraction of 1% of the American output. But this figure in turn is hardly fair to the company itself, since 60% of its total production goes directly to the taxicab business.
The company attitude appears receptive to having contests and other incentives programs, as confirmed by what has actually been done to date, on however limited a case. As a company executive put it, “We feel a certain pressure to do these things because this is what the other companies do, and we have to play the game too. Even though we are small, we still have to have a complete range of merchandising activities. “ This includes for instance a staff of service managers and road managers- and the seasoning applies to the use of sales incentives and other programs.
This is an interesting recognition by a company seeking to steadily increase its returns in a competitive market, that the space and format of promotion may be directed to a considerable extent by what the industry leaders do. It is not just a case of trying to keep up with the Jones but of providing in due measure all the aspects and paraphernalia of merchandising which the public expects.
Another important factor is the nature of the dealerships which have been set up to handle this new car line. Almost all, except for about eight factor-operated stores in major cities, are dual dealerships- that is , they also handle other car lines.
Usually of course Checker volume will tend to constitute only a small fraction of such a dealer’s total sales volume, an the attention of his staff and his selling efforts might naturally tend to gravitate toward the other cars that make up the real volume, this is one of the things that Checker has to battle with.
The dual dealership, of course is a rather unfamiliar concept in American automotive merchandizing. Generally, this is a franchise type operation like gas stations or many food outlets, and there tends to be an understanding that the dealer will not handle competitive products.
Some developments in legislative and regulatory fields suggest that a n important change in these respect in the automotive field itself may be vigorously sought, through it may not of course be achieved.\
With this background it is easy to understand why Checker values the deal relations impact of such promotions, considering this in fact as an aspect of its valued public relations. “The retail salesmen in the different dealerships who sometimes are in the habit of closing a number of sales in every period, are naturally not too keen on trying to sell something that they know they will only sell a few of.” The spokesman says. But such programs or contests “make the salesman happy, because the aware comes directly to him”.
Checker’s promotion program is different from that of the majors in another important respect – its program are not synchronized in the same way to annual and hence seasonal factors, changes and improvements are made constantly, but one year’s model does not become outdated at a certain time each years. This makes for stability in use – and a certainly much less frequents trade ins than with the other car makers.
In fact Checker frankly feels that its experience in nearly 5 years has been insufficient to determine how long Checker customers keep their cars., and what the extent of brand loyalty actually is.
Checker differs in another important aspect it is and is advertised as a big car in the sense that it is roomy inside in contrast to the low height of interiors of other dimensions of most America n cars. These factors, plus an emphasis on quality of workmanship, gasoline economy, and similar points, give it an appeal to a special type of customer.
“First of all, we urge the dealers to make money we don’t stress giving a car away. We are not competing directly with say Ford-Chevrolet-Plymouth. Many times there are premiums offered to, for instance, a salesman who will sell a new Ford to a Plymouth owner.
“We don’t find the same number of customers shuffling back and forth. There are only a limited number of people who are going to buy, a contest only spurs the salesman on to get them to buy quicker. We don’t necessarily sell more cars over a long period of time.”
Checker has used a series of three sales incentives contests. There is no set schedule of timing: they see, to be undertaken when management judges that such stimulation can be applied to achieve some useful results in boosting seals and dealer loyalty. It must be remembered that the company still in the stage of building its dealer organization and doubtless ultimately have many more dealerships than at present.
The first program was considered the most successful from the standpoint of qualifying sales upon which awards were paid. The benefits accrued directly to the retail salesman. They were not accumulated for the dealership. On this connection it should be noted that in half or more of the dealerships, the sales team were also owners or partners in the company. A large proportion of such car sales agencies are actually small businesses run by just two or three men, who all do the selling.
The second program accumulated points for each salesman, based on a merchandise prize catalog administered by an established premium service company. Merchandised values were budgeted at about $25.00 per car, somewhat reduced from the first event.
All the contests were announced by letters from the central sales office, accompanied by report forms to control the operations. In the case of the merchandise prize contest, the supporting promotional material and forms were provided by the service organization.
The merchandise award contest drew one of the relatively rare negative reactions to this type of contest, and the executive’s comments are worth careful review. “this program was too hard to administrate, and too complicated at the dealer, rather than the company level. Most dealers, like most people, are not interested in red tape, or paperwork.
“Further it is hard to get our people into the habit of saving. They will save a couple of books of trading stamps, for instance, and then rush down to redeem them.”
“Ours is not a volume items. To the Big Three of the auto industry a jump of 1% in the auto market means a fantastic figure. They can make this sometimes by buying an incentive program – note it is not feasible with a product having a relatively stable market.
“I think these contests have increase our sales in a quota period slightly. They have been partially successful from the standpoint if increased sales. “They have been very successful from the standpoint of dealer relations and goodwill. Here they are invaluable. The evidence is that we are continuing and have another program in the works now.
Currently a limited departure from past practice is being made in the form of an offer of a travelers alarm clock to people who come into the dealership to test drive a Checker. This is traffic builder with a specific persona participation pet. It is considered very important in competitive car selling to get the prospect actually back of the wheel of the car and out on the road. It is of course similar to the types of programs offered by most popular prices cars in some form and at some level.
Presented In Test Area
This program was presented in a selected test market area, Chicago, though the regional sales office, and embraced all Checker dealers in the Chicago area. The announcement was made solely through direct mail, to known owners of a specific make of car. Returns have not been sufficiently realized and analyzed yet to provide conclusive results.
Checker feels that “rewards should be prompt and meaningful to be effective”. Since the company is still in the active processing of building its sales organization, its incentive effort shave logically concentrated on its internal incentive offers rather than anything slanted to the consumer. The new Chicago project indicates that I may soon add this further dimension of promotional impact.
“You can’t merchandise something as complicated as an automobile from a gas station,” the Checker executive comments “You need a dealer organization, and this is part of the reason our incentive programs is aimed directly at the dealer organization.
“Under the right circumstances- with the right product – incentives are great. We are not entirely convinced how they will work for us, because of our special circumstances”.
In time the firm may convince itself of the value of incentives within the framework of its own operations.