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#63 – Pre-Selling Lexus

by | Dec 8, 2016




You only get one chance to make a first impression. Everything about Lexus was new and unknown to the American consumer. Lexus would be an all-new product with new dealers, new facilities, and new sales and service people. Lexus sales in the first months would have to get off to a great start in order to make a good first impression on the automotive press and to demonstrate acceptance of Lexus by the American consumer.


The sales objective for our first month in business, September 1989, was set at 3,000 LS400s and 1,000 ES250s for a total of 4,000 sales. We developed a pre-sell program in hopes of selling the first 3,000 LS400s before they even reached the dealerships in August, insuring we got off to a great start in September.


We worked together with Team One Advertising to develop a comfortable, first-class approach to potential buyers. Lexus sponsored high-class events like the San Francisco Opera, Kennedy Center Ballet, U.S Polo, PGA golf events, Newport Rhode Island Yacht Club races, and the Broadway hit musical The Phantom of the Opera. At these events, at auto shows, and on the Lexus website we asked consumers if they would be interested in receiving more information about Lexus. If they declined, we thanked them and didn’t bother them again. If they agreed, we put them on a mailing list and continually updated them on product news, who their nearest dealer was, when the dealer would be open, and how to reserve a car for purchase in September.


We had planned to have 90 dealers ready to receive cars in August of 1989 and open for business by September 1. Certificates of occupancy would need to be signed and Lexus signage installed, initial parts inventory received, essential service tools and equipment in place, computers, and satellite communications installed, and sales and service people hired and trained before cars could be shipped.


We were behind. The projection was that only 70 dealers would be ready by August to start receiving cars. This meant that instead of 90 dealers selling about 45 cars each to meet our national sales objective, the first 70 dealers would need to sell approximately 60 cars each in September to reach 4,000 sales.


Infiniti, our competitor, was also targeting to have 90 dealers operational in the fall of 1989, but they were offering their dealers financial assistance. Infiniti was giving their dealers five-year, interest-only construction loans and $160,000 worth of incentives to open on time. Lexus was not offering the dealers any financial assistance or incentives to open on time.


There was no time to lose. We sponsored different events in different venues all across the country and kept at it all throughout the summer, not really knowing which events would work. What we did know was that our only hope for achieving the September sales objective was to have the cars pre-sold before they arrived at the dealerships that would open for business on September 1.


“Plant your seed in the morning and keep busy all afternoon, for you don’t know if profit will come from one activity or another—or maybe both.” Ecclesiastes 11:6 (NLT)


To overcome the stress and make good decisions during the launch of Lexus, it was important to stay healthy. Get enough sleep, stay away from alcohol, and eat right. On one of my trips to Japan I did something really stupid: I mixed jet lag, sake, and puffer fish.


(To be continued…Jet Lag, Sake, and Puffer Fish)