"If you have a Tracer on that wholesale sheet, you can just turn around now."
That was the warm welcome of a Lincoln-Mercury dealer back in the ’90s when I came in for my monthly sales meeting. I was a zone manager for Lincoln-Mercury, and that Tracer he was referring to was the rebadged Ford Escort. My "zone" was San Diego County and Orange County, California -- a great market if you love beaches, sun and import vehicles, but not so much fun if you are trying to move Mercurys, especially the unsellable Tracer.
When I think about what it was that truly led to the demise of Ford’s middleweight brand, I keep coming back to my experience as one of Mercury’s middlemen. I was a foot soldier for the manufacturer, “in the field,” and as sad as it is to say it, most days I didn’t now whether the dealers were friend or foe.
For those of you unfamiliar with this aspect of how the business works, it’s the zone managers who really move the metal for the manufacturers, but they’re not selling vehicles to the customers, they’re pushing the cars and trucks on the dealers. The job also includes helping dealers stay abreast of the automaker’s sales and marketing programs and sharing the best practices of the industry, but at the end of the day, you’re responsible for wholesaling them new vehicles, as many as you can. There’s incredible pressure on zone managers to hit sales targets, as factory build schedules are set and nobody likes to cut production. This means that from the automaker’s perspective, there are actually two customers for every vehicle, the dealer and the person who eventually drives that vehicle off the lot.
So anyway, back when I was selling Lincolns and Mercurys to dealers, there were quite a few models that were simply non-starters, like that Tracer. You might be under the impression that dealers have to take all the vehicles that an automaker builds but that’s just not the case. Dealers need to have one of each model on the lot to represent the line, but even that is hard to police. Asking a dealer to keep a 60-day supply of each vehicle is even trickier because if a dealer says he only sells one Tracer a month, a 60-day supply is still only two vehicles!
Check Out The Mercury Line Before It's Gone
A big part of my job, therefore, was to try to persuade dealers to take more vehicles by hosting special competitions with other dealers where the prize was cash or a party or something similar. I even remember going so far as to beg a dealer to take just one more Lincoln Town Car. When he still refused I asked him if he would leave it to the fates to decide, and we could flip a coin. Heads meant I won and he had to take the Town Car, but if I lost I had to take that Tracer off the wholesale sheet.
The best thing we had going for us back then was that we were launching some pretty interesting vehicles like the new Mercury Cougar, the last truly distinct product Mercury sold, and we also had the Lincoln Navigator, which was really hot for a while. We used to joke with the dealers, telling them that “We'd be happy to provide an extra Cougar or Navigator, but you see, the vehicles are all on a car carrier and there is a Tracer blocking the Navigator, and if we can't sell that Tracer, well, we won't be able to reach the Navigator.” Truthfully, that would be considered "packaging," which is a no-no, and runs afoul of dealer franchise agreements. But it points out that the easiest time I had selling to dealers was when I had some power, and nothing creates power like a hot new vehicle, something that is in demand, something that the dealers want more of. These situations in the auto business are rare and memorable, particularly in Mercury’s case, and that’s at the heart of why the brand is about to be a part of the history books.
But many stories have been written blaming the lack of success at Mercury on a lack of product. That’s really only part of the story. The dealers also had a role in the demise of the brand. Not that they killed it, but even just by looking at the structure of the Lincoln-Mercury division, it become readily apparent why Mercury struggled. All Mercury dealers are also Lincoln dealers. Ask yourself which brand you would focus your resources on, knowing that the profit margins on Lincoln vehicles were always higher? Keep in mind as well that Lincoln vehicles have always been more distinctive and differentiated from mainstream Ford products, and the Lincoln brand has always had a more clearly defined audience than Mercury. Look, the dealers are the connection to the customer and they usually have good instincts about what their customers want in a vehicle. It’s pretty clear that the dealers were not much interested in Mercury, at least not as much as Lincoln, and that judgment on the brand was either not heard or not paid enough attention to by Ford, which has regarded Mercury as the redheaded stepchild for decades.Looking to the future, if Ford will truly invest as they have promised in the Lincoln division, without Mercury, then the Ford and Lincoln brands and all the dealers will be better off. As a strategy, it sure beats zone managers going on sales calls with their pockets full of two-headed quarters. You guessed it: I won that coin toss.