In summer 2021, Ford Motor Co. CEO Jim Farley told analysts on a quarterly earnings call the automaker planned to shift all of its models to an order-bank system to reduce complexity and incentive costs that come with building too many vehicles.
Ford already had tested such a system with the launch of some new vehicles, including the Mustang Mach-E electric crossover, by asking customers to reserve one before production began.
Gaudin Ford in Las Vegas jumped into action, setting up its own retail ordering strategy, installing new technology and revamping pay plans to compensate employees for ordering vehicles that potentially would not be delivered for months, said Bryant Gilligan, the dealership’s general sales manager. The store’s website was updated to feature an orders page for vehicles.
Since July 2020 when Ford unveiled the new Bronco, Gaudin Ford has taken 1,507 retail orders. As of last week, nearly half those orders, 679, had been delivered to customers, he said. The dealership sold 2,014 new vehicles and 1,438 used vehicles in 2021.
“We jumped all the way in,” said Gilligan, who started at the dealership in August 2021. “It wasn’t really a bet to go all-in on retail ordering, but that’s effectively what we did. And it’s paid a lot of dividends.”
A number of changes across the dealership were required, he said. Gaudin Ford enabled electronic signatures so customers didn’t need to visit the store to place an order. The dealership hired a website vendor to create a page allowing customers to order a vehicle without having to leave the website.
Gilligan said success with the new process would not have been possible without buy-in from employees. Gaudin Ford introduced a pay plan that offers a bonus to sales employees for each order taken. That’s in addition to the regular commission they earn on the sale of a vehicle when a customer takes delivery, sometimes months later. The goal of the incentive is to prevent employees from prioritizing customers who can close a deal the same day with a vehicle in stock, Gilligan said.
One of the most critical changes has been giving dealership employees visibility into every order placed.
Gaudin Ford reworked its new-vehicle inventory manager position and moved its Internet manager into the new role, giving her oversight into the retail ordering process, Gilligan said. She created spreadsheets that track customer information and the status of an order, then shared them with sales employees so they could communicate updates to their customers. This holds sales representatives accountable to stay in touch with their customers, he added.
Ford has taken notice. The automaker says Gaudin Ford stands out in its 59-store Phoenix region, which covers Arizona, New Mexico and southern Nevada.
“Gaudin Ford was one of the first in the region to adopt a comprehensive strategy around retail orders, has originated a number of best practices and consistently ranks ‘near’ the top of the region in retail order metrics, including verified retail orders submitted and sales (volume and percentage) resulting from retail orders,” Ford spokeswoman Cathleen O’Hare told Automotive News via email.
Gaudin Ford had to change customer mindsets about the ordering process, as many Americans are used to selecting a vehicle from hundreds on a dealership lot at any given time, Gilligan said. One approach has been to send marketing messaging about ordering custom vehicles.
Dealership employees explain to customers that if they can wait to install some accessories, such as a certain trailer hitch or bedliner, they can get their keys faster, he said. They talk to lease customers about ordering their next vehicle nine months ahead of when they are scheduled to turn in their current one. They pitch build-to-order if a customer can’t find what he or she wants on the lot.
“This has absolutely transformed the way we do business,” Gilligan said.
The ordering process has slowed down recently, he said, as Ford closed some order banks to deal with capacity issues. In August, for instance, the dealership took 62 orders, compared with more than 100 per month in fall 2021. But dealership leaders see that as a temporary issue in a time of limited inventory and expect ordering will be a permanent part of Gaudin Ford’s sales going forward, Gilligan said.
“People love custom things,” he said. “They love that experience. But I think, ‘I’m not going to get that from a Ford. Maybe I can’t afford that.’ But you can. And I think that’s a big part of it, is kind of changing mindsets. You can custom make a vehicle to exactly how you want it.”