There’s no question that today, Cadillac is making the best vehicles it has ever built. In fact, some would say that the newest Cadillacs such as the ATS and CTS are better than their competitors from German and Japanese luxury brands such as BMW, Mercedes-Benz, Audi, and Lexus. But is Cadillac doing everything it can to sell its best-of-breed vehicles? We don’t think so. In fact, the division can make this simple change to grow sales in a valuable way in the short term.
That one simple change? Targeted conquest incentives.
In other words, an incentive for BMW, Mercedes-Benz, Audi, and Lexus owners to purchase a new Cadillac. You’d think that Cadillac would already have something that simple, but it doesn’t.
As of this writing on Friday, March 20th, 2015, every single incentive that Cadillac offers in the United States is for existing Cadillac owners. That’s right, there isn’t a single incentive designed to attract owners of vehicles from competing luxury brands.
|MODEL||LOYALTY INCENTIVE||CONQUEST INCENTIVE||OTHER INCENTIVE|
|SRX:||$1,000||NONE||$1,500 BONUS CASH*|
- An example of Cadillac’s current loyalty incentive: $1,000 towards lease or purchase of a 2015 ATS for current GM owners and lessees
- *Cadillac SRX incentive is available to Cadillac and non-Cadillac owners
That is not to say that customer retention/loyalty isn’t important. To the contrary — it’s vital to maintain the brand’s “base” customer base. But unlike BMW or Mercedes-Benz, which are well-established in the luxury space, Cadillac is the challenger in the arena — not only does it need to “maintain” its customer base, but it also needs to attract new customers, those who are new to the luxury car market in general or those who it lost over the last several decades. And the way to do that is to offer:
- Unrivaled product
- Exceptional sales, service and ownership experience
- Tempting incentives to owners
- Irresistible incentives to owners of competing makes and models
These inventives aren’t about “giving away the house” or lowering ATPs. They’re about attracting new, much-needed customers. So until Cadillac adds #4 from the list above to its sales playbook, it will continue to experience negative growth in key markets like the United States (with all the negative repercussions), while rivals like Audi, Mercedes, and BMW grow at its expense. Here’s to hoping something changes when Caddy “relaunches” its sales and marketing during the Oscars this weekend.