Dealers who use a 1-price system say they are responding to changes in the marketplace.
Having been happily involved in the auto business for 45 years, I, like many, have become comfortably set in my ways. I’m sometimes guilty of saying, “This is the way we’ve always done this or that, and it has always worked.”
It’s hard to teach old dogs new tricks. I use the word “tricks” only in the context of that oft-used quote. I once saw a respected dealer become irked at hearing someone refer to “tricks of the trade.”
He said, “This is a great business and our people need to learn this trade and completely dismiss any thought or reference to tricks.” I have tried to keep that in mind ever since.
When Saturn franchises were awarded, the customer-friendly process and concept fascinated me. I was impressed with the enthusiasm with which dealers and consumers conducted business. Saturn did not fail because of its hassle-free sales process.
During the past year, I have participated in many meetings with dealers and learned about their use of a process that isn’t new but is gathering renewed energy in the marketplace. It is negotiation-free or 1-price selling. It seems like today’s marketplace is asking for or prodding the expansion of this process.
Speaking with dealers who use it, I have not heard a single comment that switching to it has been a mistake.
While each of them admits the implementation of the process was painful in many respects, the net effect on their organizations and personnel has been positive. They seem totally committed to it.
I have asked many of those dealers why they’ve chosen this process versus the more traditional approach. Several said they were responding to changes in the marketplace, noting that today’s consumers want a more transparent car-buying experience.
The No.1 comment I hear is how much customers enjoy the simplicity, openness and seamlessness. Arriving at the dealerships, customers are told of the non-negotiation process, how it works, what they can expect and how they will remain actively involved as the deal progresses.
In most cases, dealership customer-satisfaction scores have improved after stores implemented the system. I’ve been told dealership personnel for the most part endorse the system, leading to improvements in employee satisfaction as well.
Negotiation-free selling is not a magic bullet. Dealers using it still must handle issues most commonly associated with dealership operations, but in a totally different environment.
Yes, there still is sales personnel turnover, but it seems less of an issue with these dealers. They still must battle their competition in all arenas, focus on gross-profit production, personnel productivity, inventory turns, expense management and net profit as a percentage of their gross.
I’m not pitching the no-negotiation process nor suggesting every dealer switch to it. But some highly successful dealers now use it, saying they saw a need for change in the way they conduct business.
After spending time in meetings with these dealers and their managers, I must admit the enthusiasm is contagious.
Tony Noland of Tony Noland & Associates is a veteran dealership consultant. He can be reached at tonynolandandassociates.com.