To say Lincoln has not shared the same level of success Ford has experienced lately is an understatement. While Ford has flourished, Lincoln has languished. Lincoln’s woes arguably began a decade ago with scuttled attempts to make Lincoln an American BMW and Ford Motor Company’s financial meltdown that eventually lead to Alan Mulally’s appointment as CEO. Today, Jim Farley, Group Vice President, Global Marketing, Sales and Service of Ford Motor Company, has advanced several visions of what Lincoln is and what it should be. One is to be a Tier 1 luxury brand, occupying the rarefied air of the luxury market dominated by thoroughbred luxury manufacturers BMW and Mercedes. The other is that Lincoln will offer a ‘personal touch’ to luxury buyers that other luxury manufacturers lack.
The distribution model Mr. Farley has chosen to meet these goals is the wrong one. Perpetuating a trend that began prior to current management’s reboot of Lincoln, Ford Motor Company encourages the co-mingling of Ford and Lincoln vehicles in the same showroom. Once considered taboo, the configuration of Ford-Lincoln is the dominate distribution model for Lincoln today. Combining a non-luxury brand and a luxury brand in the same channel is a concept foreign to the sales of luxury automobiles. No other luxury manufacturer uses this model, including those such as Audi, Lexus, Infiniti, and Acura. Cadillac is moving away from allowing the co-mingling of its non-luxury products brands with Cadillac in major metropolitan markets.
Why is this problematic? A dealership, like any other business, has limited resources and will distribute these limited resources to their best use. Logically, if a market represents a small share of the dealership’s overall business, that market will not receive as much of the staff’s focus as the larger parts. Lincoln products now have to compete for shelf space with Fords and used vehicles, which, in many cases, offer a sales person more gross profit for less effort to sell. If the Lincoln product isn’t sufficiently differentiated from the Ford product, it becomes a selling tool to sell more Fords. For example, a sales person may show a customer a Limited Taurus and Lincoln MKS. Both cars are on the same platform and both offer similar features. The Taurus is thousands less than the Lincoln. From a value proposition, the Taurus seems like the better deal, and the sales person may then use the Lincoln to show how good of a deal the Taurus is. Even if significantly differentiated, Lincolns still have to compete with a wide and deep shelf of Ford products, from small cars to full size trucks, with many that offer content and features identical to Lincoln counterparts.
How does the dealership deliver a shopping experience Mr. Farley envisions with a ‘personal connection’ to the luxury buyer? Does the dealership democratize the whole process, and offer the Ford buyer the same experience as the Lincoln buyer, or does the dealership try to segregate the two buyers even though they will shop in the same showroom and be served by the same staff? How does the dealership treat a consumer who buys a Lincoln for his personal use and a Ford truck for his business? Is this person a ‘Ford’ customer or someone who deserves a ‘personal connection’ like a Lincoln buyer? What of a Ford buyer that purchases a Titanium Fusion (the highest price and most lavishly equipped Fusion) or a top of the line Super Duty truck? Is he or she not worthy of a ‘personal connection?’ Instead of elevating the Lincoln shopping experience, the shift will be to reach the lowest common denominator between the brands. This is a possible advantage for Ford, as it means an upgraded shopping experience for Ford consumers. But how will luxury buyers feel when cross-shopping Ford-Lincoln dealers with dealers that offer only BMW, Mercedes, Audi, etc.?
Ford Motor Company has a great pool of talent, and its management team has made some great strides with putting the shine back on the Blue Oval. Ford brand products are winning the hearts, minds and hard-earned money of American consumers. It is far from certain, however, that current management can replicate these successes with Ford at Lincoln. A legacy distribution system that favored the combination of Ford-Lincoln dealers may outweigh any strides Lincoln designers may make with the lineup.
Farley Touts Lincoln’s ‘Personal Connection,’ Automotive News.