RE: This week Neighbour here asked what's the point waiting for 3rd Q results when Futura is under creditor protection, and maybe already in the process of winding down. Without information on how things are going, I had no answer.
The tougher question would have been what factors caused this in the first place. Focusing only on Aeroplan reselling timeframe, they were making progress with Aeroplan. OK Tire, Integra Tire, Maaco and others made an early impact.
The new car dealership category was the tough one. Management was optimistic this was the future, but something about the characteristic of this category was like no other. It appeared like Aeroplan did not even belong here........more like a like an appendage, rather than an effective marketing program available for car dealers.
Looking at it this way,it's may not be Futura's fault. I'm therefore surprised that Aeroplan themselves offered 60,000 miles for Infiniti car dealers this year. Might as well use 100,000 miles, it will make little impact. If I like GM cars, this offer will not change my mind to buy an Infiniti.
And so the first hint of how the car business operates. Loyalty is defined with the car type and satisfaction from previous purchases. Aeroplan does little to change buying behaviour in this industry category. It would work in the parts/service provided, but even here, looking at car dealership websites, they have their own promotions. Aeroplan nowhere to be seen.
In previous posts I mentioned what if multiple dealerships in close proximity all had Aeroplan. What's the point of having Aeroplan if all car dealers have it? Where's the competitive advantage?
Any bidder looking at buying Futura will have to consider the above. It's easy to be captivated by the big money the auto industry spins out. And I know management was. But there's little room for loyalty programs like Aeroplan and Air Miles to grow.
To compound things, it costs money to sign-up one merchant at a time. Not only that, but the return is small. I noticed Futura has plenty of one location deals. That strategy won't work well. Maybe fine if one location merchant approaches Futura, but when courting new business size of operation matters.That's why the miminum 15 retail locations Futura has now set in the US that each sign-on must have.
So is this the end of car dealership sign-ons? What do the dealers say who had timeto try Aeroplan. Did it work for them, or was it just another cost where the effectiveness of the program was hard to measure.
With such an entry barrier for Aeroplan to jump over, it's no wonder Futura can't make a go of it. Advantex appears to have more success with Aeroplan and the select industry categories because the wall isn't there.