2011 Cadillac CTS
As tests go, the score isn’t exactly stellar. The first car voucher offered on Groupon in North America netted only four consumers during the test last week to see if online coupons would draw customers into the showroom.
As we reported last week, the deal was worth $500 off any new car, crossover, SUV or pickup truck at one Detroit-area GM dealership, LaFontaine Buick-GMC-Cadillac. To receive the voucher, consumers would pay $199. Groupon and LaFontaine had set a requirement for a minimum of 10 vouchers to be issued.
But there were only four takers, even though the initial two-day (July 12-13) offer on the Groupon Detroit Web site for four days. Groupon is refunding the customers’ money, since the minimum voucher requirement wasn’t met.
Still, Robert Milner, LaFontaine’s general sales manager, did wind up selling cars to two of the four customers who purchased vouchers – and he honored the vouchers. He told Automotive News, “We did get a lot of chatter.”
Why didn’t more consumers grab onto the Groupon car voucher offer? Speculation is that it’s a whole different deal than the 50 to 60 percent off vouchers for merchandise and services that Groupon usually offers.
Consumers, says Milner, were skeptical about it, thinking that the dealership would boost the price just to offset the $500 discount. He told customers to negotiate their best deal and then bring the Groupon voucher into the dealership and use it as a down payment. And if they didn’t buy a car, he said they could use the $500 voucher toward the dealership’s other products and services.
Perhaps $500 isn’t enough of a discount off $30,000-up vehicles. And buying a new car isn’t the same thing as snagging a limited-time offer on a spur-of-the-moment flower or spa purchase or restaurant meal.
Milner isn’t giving up on using Groupon for future car sales. It’s still a cost-effective marketing tactic for the dealership since they normally spend $350 in advertising per car sold.
So while this initial Groupon car vouchers test didn’t result in huge numbers of consumers flocking to the dealership to claim their $500 discount, there’s still interest out there for some iteration of discounts for automotive products and services. Automotive News quotes Dave Zuchowski, Hyundai Motor America’s vice president of sales, who’s “intrigued” by Groupon, saying he’s “certainly open to it because of the targeted and limited-time nature of the offer.”
For its part, Groupon says that future car-sale promotions will need to be modified, based on the results of the LaFontaine experience.
[Automotive News (sub. required)]