Ford is reintroducing “stair-step incentives,” a controversial practice that pays dealers bonuses for surpassing sales targets on certain models, to bolster sales of 2023 F-150 pickups.
In its quarterly sales report, the automaker revealed that sales of the popular truck’s 2023 iteration had declined 10% year-over-year, even as company-wide sales improved roughly 6%. To clear inventory and make room for current model-year F-series pickups, Ford relaunched stair-step incentives, a program not seen since the onset of the COVID-19 pandemic.
Typically, stair-step incentives allow dealers to receive one set of bonuses when achieving a sales objective, with additional bonuses for exceeding their goals. In February and March, Ford offered $750 per unit for selling the target number of 2023 F-150 pickups and $1,500 per unit once the target was met. The automaker has now revised the latter amount to $1,000 per unit but will expand coverage to include 2023 and 2024 model-year Explorers.
Opinions on stair-step incentives vary from dealer to dealer. Some criticize the system for prioritizing monetary gain over customer service, eroding transparency in the sales process by encouraging dealers to push certain models without the buyer’s knowledge. Others argue that it is a mutually beneficial arrangement that, when utilized correctly, can connect customers to cheaper deals, boost dealership profits, and help automakers move inventory. Regardless, Ford is only one of many bringing back pre-pandemic incentives in 2024. Car manufacturers are hoping to spur demand without implementing aggressive price cuts, leading the industry to rely on discounts and offers not seen in several years.
