FORD SIMPLIFIES VEHICLE ORDER PROCESS TO BOOST SALES, CUSTOMER SATISFACTION AND DEALER PROFITS
- Ford Motor Company is streamlining its vehicle ordering process to improve sales and customer satisfaction, reduce the number of vehicles that languish on dealer lots, and bolster dealer profits; the company has reduced orderable configurations by 90 percent from the 2008 model year
- New ‘Rapid Spec’ configurations offer customers additional vehicle content and value; fewer vehicle configurations reduces manufacturing complexity and cost
- According to J.D. Power and Associates 2007 Sales Satisfaction Index (SSI) Study, 30 percent of new vehicle shoppers who walk away from a dealership do so because the dealer did not have the exact vehicle with the colors and options they wanted.
DEARBORN, Mich., Oct. 28, 2008 – Ford Motor Company is dramatically streamlining its vehicle ordering process, an initiative that promises to help improve sales and customer satisfaction, reduce the number of vehicles that languish on dealer lots and bolster dealer profits.
Using sophisticated analytical tools to determine the vehicle configurations customers in different regions of the country most want, Ford has significantly reduced the number of orderable combinations across its vehicle lineup. This means customers who spec out vehicles online have a much greater chance of finding the exact car or truck they want at their local Ford and Lincoln Mercury dealerships.
In the past, dealers have had so many combinations to choose from that customers had relatively small chance of finding just what they were looking for at a local dealership, which can affect customer satisfaction, dealer closing rates and the amount of incentives needed to make a sale.
“The Ford team is committed to working smarter across the entire business and with changes like reducing the complexity in the vehicle ordering process, we are able to make our dealers more successful by ensuring they will have the right product with the right features when customers walk into the showroom,” said Jim Farley, Ford’s group vice president of Global Marketing and Communications.
For example, the new 2010 Ford Fusion will be available in 104 popular orderable combinations, compared with 2,602 configurations for the 2008 model year. For the entire Ford brand, the company has reduced orderable configurations by 90 percent from the 2008 model year.
Fewer build combinations contributes to improved vehicle quality by reducing manufacturing complexity. The reduction in orderable configurations also allows for significant engineering and manufacturing cost savings.
A team inside Ford has been working with some of the top dealers in the U.S. for more than a year to identify ways to modify the vehicle ordering process and reduce the number of vehicle build combinations to help improve customer satisfaction, improve sales and lower dealer financings costs. Only 5 percent of customers order vehicles from the factory. The other 95 percent of customers purchase vehicles from their local dealers’ existing inventories.
In the past, dealers had so many possible combinations to choose from that it was difficult to order the vehicles their customers really wanted. It also meant that certain slow-selling configurations sat on dealer lots for extended periods of time, which adds to dealers’ financing costs and ultimately leads to more rebates to move the languishing models.
“The streamlined order process helps the dealers through faster-turning inventory and reduced borrowing costs for their vehicle inventory. A fully configured vehicle with the most popular equipment will sell more quickly,” said Rich Savino, owner of Country Ford in Levittown, N.Y., and a dealer council member who served on the order guide simplification task force. “Smaller dealers that are unable to maintain large inventories will be far for likely to have the right vehicle in stock by ordering Rapid Spec packages.”
According to J.D. Power and Associates 2007 Sales Satisfaction Index (SSI) Study, 30 percent of new vehicle shoppers who walk away from a dealership do so because the dealer did not have the exact vehicle with the colors and options they wanted.
“Less certainly can offer more to customers,” said Brad Munn, Ford’s cross-vehicle product strategy manager. “A tighter focus on delivering the combinations our customers want most can yield benefits across the board. It’s a win for our customers, our dealers, and our product development and manufacturing operations.”
The product marketing and pricing teams conducted extensive sales analysis on vehicle configurations, and carefully listened to customers and dealers in various geographic regions to optimize the model mix by reducing slower-selling build combinations.
Ford also developed ‘Rapid Spec’ packages that cluster popular options, and provide customers with a higher level of vehicle content and value. This initiative uses consumer-driven data to group options and features into series. The strategy begins with a base model, and builds from there to a higher level of vehicle content.
The 2010 Ford Fusion will be offered with a Rapid Spec package that includes the 2.5L I4 engine, 17 inch wheels, power assists for the driver’s seat, windows, and door locks, Cruise Control, and a Tilt-Telescoping Steering Wheel with integrated audio controls. The package also includes a 6-speaker AM-FM Stereo with single CD, audio jack, MP3 and SIRIUS Satellite Radio, a moonroof and Ford SYNC with 911 assist and Vehicle Health Report. This Rapid Spec combination is expected to account for 25 percent of 2010 model year Fusion sales.
“The objective is to develop the right number of configurations that meet customer wants and needs,” Munn said. “To accomplish this, we developed new analytical tools that enabled us to integrate sales and financial data, and our Customer Knowledge system to help our dealers know which vehicles to order and help us determine the best products to build.”
Dealers find that prospects and shoppers are more likely to become customers when a properly equipped model is in stock, available immediately and offers the optimum combination of feature content and value. For customers, have fewer orderable combinations to choose from makes the shopping experience easier and more fruitful.
Bruce Schindler, owner of Bob Davidson Ford Lincoln Mercury in Baltimore, Md., also served on the task force charged with reducing order combinations. He sees this initiative as helpful to consumers in the information gathering process. “Customers who go online and configure a vehicle run into trouble because of the number of combinations available,” Schindler said. “Ford is making it easier for customers to find the vehicle they want at a dealership.”
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Ford Motor Company
Ford Motor Company, a global automotive industry leader based in Dearborn, Mich., manufactures or distributes automobiles in 200 markets across six continents. With about 229,000 employees and about 90 plants worldwide, the company’s core and affiliated automotive brands include Ford, Lincoln, Mercury, Volvo and Mazda. The company provides financial services through Ford Motor Credit Company. For more information regarding Ford’s products, please visit www.ford.com.