Thursday 27 October 2016
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Ford Drops “Friends & Neighbors” Promotion Early

Ford Drops “Friends & Neighbors” Promotion Early

Ford is dropping its “Friends & Neighbors” promotion five weeks earlier than planned, after the offer failed to resonate with consumers as much as more traditional year-end discounts offered by competitors.  As I discussed on the Car Pro radio show, this program had no chance.

The sale, which started Nov. 3, was scheduled to run through Jan. 4. Instead, it ended on Monday, Nov. 30, and new incentives will start on Tuesday, Dec. 1.

“Starting Tuesday, Ford is moving to a new Holiday Sales Event in December,” a Ford spokeswoman said in an email. “Dealers offered insights on the kinds of offers resonating most with customers in-market, and we are updating our plan based on their feedback. We will continue to be competitive yet disciplined on incentives and offers for customers.”

The Wall Street Journal reported the abrupt end to the promotion earlier last Friday, when Ford sweetened the offers on some models with at least $500 in “Black Friday bonus cash.”

“Obviously their pulling it means it’s disappointed them,” said Jeff Carlson, the owner of Glenwood Springs Ford in western Colorado. “We go by what the consumer says, and the consumer voted not to embrace this.”

Carlson said he hasn’t been told what approach Ford will take instead, but he praised the automaker for taking the unusual step of pulling the deals now and switching to something that might help dealers be more successful rather than waiting for the promotion to run its course.

Ford had been heavily promoting “Friends & Neighbors” with ads inviting shoppers to take advantage of the “inside deal” that’s normally available only to employees’ friends and relatives. The sale set a no-haggle price within about $200 of dealer invoice, though dealers were allowed to undercut that amount.

Last week, Ford CFO Bob Shanks defended the promotion against criticism from analysts, saying it wasn’t actually hurting the automaker’s margins. He said the sale was a marketing effort more than a price-slashing event, with incentive spending actually declining slightly from October.

“There is no incentive increase,” Shanks told analysts during a question-and-answer session in New York. “This was a marketing program. It was called what it was called to try to attract consumers. We are trying to market our products effectively.”

Ford hoped the promotion would help generate strong sales to close out 2015, a year in which its market share has been flat. Forecasts from TrueCar and show Ford’s share in November flat with a year ago and down from October — an indication that the promotion had not panned out as much as executives had expected.

See my newspaper column for more insight into this program.

Jerry Reynolds, The Car Pro

Photo Credit: Ford