Most anyone can relate to the longing of driving past a luxury car dealership and being tantalized by the shiny new model prominently displayed. But it takes seasoned promotional thinking to parlay that yearning into a way to move cancelled new home inventory. Fortunately, Kim Whitman, vice president of sales at Portland, Ore.–based Renaissance Homes, thinks that way.

THE LITTLE CAR THAT COULD: Randy Sebastian, president of Renaissance Homes, saw his company's new-home sales hit record highs in February thanks to its partnership with a local car dealership to include the new Mercedes smart car in the sale of selected homes. Photo: Courtesy Renaissance Homes Though the housing market in Portland has remained strong relative to the rest of the country, sales in the last quarter of 2006 slowed because of all the negative national press. "Like every home builder out there, we had some cancelled inventory," says Whitman. So, as the company moved into their most critical time in the 2007 selling season–January, February, and March typically account for 40 percent of Renaissance's yearly sales– the need to drive traffic and move spec homes became amplified.

Individual prefinished units were scattered throughout the builder's 16 neighborhoods, so it was challenging to pinpoint them in advertising. But as soon as he drove past Oswego Luxury, a car dealership in nearby Lake Oswego, and saw the new Mercedes smart car, a unique promotional partnership idea clicked for Whitman.

Committed to green building, Renaissance homes include a series of green building and energy-efficiency systems that the company touts as their "Living Green" standards. And with the smart car boasting low emissions, no battery pack to dispose of like hybrid cars, and an average of 50 miles to the gallon, it has been touted as the most environmentally friendly car available. Though more than 800,000 smart cars have been sold in Europe, smart car is new to the United States. To date, only seven dealers in the country have been able to obtain the exclusive rights to import them.

"As soon as I saw the car at the dealership, I went in and told them I wanted to give them away with the sale of our homes. It was a perfect way to underscore our commitment to green building and generate some excitement at the same time," Whitman says. Supported by a print and television campaign, the company launched a smart car promotion for February.

Looking through the inventory of completed specs, Whitman chose the most challenging homes to sell and assigned them to the smart car promotion with a simple premise: Buy one of these specific homes and get the car. The only parameters were that the sale was noncontingent and that the buyer could close in 45 days.

While prepping sales staff for the promotion, Whitman consciously schooled salespeople on how to handle a potential buyer who might demand the car's value to be applied against another home as an incentive. "We wanted to stave off any contentiousness," he explains. "Our rationale was that we considered the $20,000 value as a marketing expense. We project to sell five cars this way. Take the cost of a car, multiply it by five and then spread it over our 300 homes we'll sell this year. That qualifies you for a $300 credit, mister home buyer."

In Whitman's eyes, the program couldn't have been more successful. Traffic in sales centers shot up nearly 60 percent during the month. "At times, we were literally overwhelmed with traffic," Whitman says. "We'd have 50 people in at a time."

During February, Renaissance sold six homes with the car and a total of 48 homes overall, setting a record as the highest single month of sales in company history. Whitman attributes the spike directly to the promotion, as traffic immediately dropped back to normal levels after February.

"Even if we had sold all 20 smart car homes and reduced our margins to buy 20 cars, it was a preconceived business decision to do so," says Whitman. "And the increase in traffic certainly spilled over to push sales of the other specs we had on the market."

–Lisa Marquis Jackson

Learn more about markets featured in this article: Portland, OR.