The Sticker-Dicker Dilemma

Will more dealers embrace haggle-free selling in the face of tough market conditions?

The possibility of that is on the radar screens of National Automobile Dealer Assn. leaders, such as the outgoing chairman, Dale Willey, and his incoming successor, Annette Sykora.

“It's been a tough year for many domestic brand dealers,” says Willey, a General Motors dealer in Lawrence, KS, “and you have to wonder if greater acceptance and use of non-haggle pricing might have made a difference.”

Sykora, who with her husband Patrick, co-owns Chrysler-Dodge-Jeep and Ford-Mercury stores in the Lubbock, TX market, agrees that a turn away from negotiated pricing could prove a sought-for solution to selling problems of her dealerships' brands.

“Certainly, women buyers would appreciate no-haggle new-car and used-car buying,” says Sykora. “Up to three out of every four women prefer to pay a fixed unbargainable price, according to a Kelley Blue Book survey. That compares to five out of every eight consumers. Is absence of haggle-free driving shoppers away from domestic brands? I have to think so.”

Under male chairmen, NADA has not taken an official position calling for implementation of no-haggle policies by its members, perhaps in recognition of the failure of past haggle-free initiatives on various domestic-brand marketing campaigns.

But one of the nation's top dealership chains, Lithia Motors, and a 10-store group in Minneapolis have gone aggressively into “fixed pricing.”

Lithia CEO Sid DeBoer has kicked off a three-year game plan for all-brand unshakable prices.

“Attracting women buyers and increasing customer loyalty is key in this market,” says DeBoer. “Salesmen who've been in the business as price-cutters and trade-in jugglers are fearful of the change.

“But our no-haggle consultant, Mark Rikess, points out that sales people in 1-price stores can make $50,000 a year, instead of $35,000 on commission, and customer loyalty rates rise.”

The Paul Walser group in Minneapolis has instituted single-price policies at all of its locations. “We've doubled the number of repeat customers,” says Walser, “even as the soft market has cut the number of domestic-brand deals.”