• Stop being a LURKER - join our dealer community and get involved. Sign up and start a conversation.

Thoughts on a big-city test for no-haggle pricing?

Over the years, I have seen the One Price philosophy come and go...and come.....and go again, and on and on and on. I am now in a market that has a couple dealers that are One Price, and I have a couple that aren't. The One Price stores are consistently 10% higher priced on their pre-owned inventory than I am. I believe that Yago hit on some really good points regarding the customer's perception about the value to price ratio and feeling good about the transaction.

My favorite customer has always been the one that handles it like this:

I am going to give you 1 shot. Give me your best deal, and I am either going to buy it or I am going to walk away empty handed. Just cut all the crap, and give me your number.

Ok, no problem. I will sell you the car for $12,260.

I will give you $12,000, right now.

Customers love to negotiate. They just don't want to feel like they got Man Handled through the process. We price our cars fairly close to market. We also leave a little room for the customer to have some fun with us.

Buying a car is supposed to be fun! We make sure that they have fun and negotiation is just part of it.
 
... I am now in a market that has a couple dealers that are One Price, and I have a couple that aren't. The One Price stores are consistently 10% higher priced on their pre-owned inventory than I am...

I find this fascinating.

One Price must not be a solution, one price must be a way. As a dealer, you can choose which way you want to run your business... this becomes a problem when you chase unicorns and you decide to change to one price because someone else is doing well with it.To me, its no different when you change your marketing to copy another dealer just because they outperform you.

The leaders and their vision is what ultimately make either one of the ways a success.
 
  • Like
Reactions: joe.pistell
I find this fascinating.

One Price must not be a solution, one price must be a way. As a dealer, you can choose which way you want to run your business... this becomes a problem when you chase unicorns and you decide to change to one price because someone else is doing well with it.To me, its no different when you change your marketing to copy another dealer just because they outperform you.

The leaders and their vision is what ultimately make either one of the ways a success.

There is no right or wrong. It's all about implementation and execution.
 
I find this fascinating.
Me too Stefan, something all of us could kill many drinks over discussing at length.

I've never been a fan of the "one price" model for new and/or used vehicles. I think it's too restrictive and it does have to be definitive to work at any location like others have stated, but the problem is the whole market is based on a consumer perception of false-hope. Yago and some others on the thread here have touched on this point, shoppers (some dealers w/tech) will still think there is always a better deal out there because they do not really know what they are doing. I think you limit your potential as a committed one-price dealer, competing in a market of low ballers, aggressive pricers, best deal beater dealers, who have been doing the same buying strategies for years. Whether it's in the newspapers, radio, TV, or now online - they know consumer (human) behavior and how to manipulate it. Most shoppers look at publicly declared one-price dealer as being the starting point price to beat at their local dealer. You will have a good portion of the market shoppers who simply appreciate the transparent nature and great service of one-price dealers, but never the majority IMO.

However, I've always been a big fan of a very competitive pricing model for both new & used in your market area. With new it's about ordering the right stuff, and with used it's about buying the right stuff for your market. Then you have to hone your sales processes and educate your sales crew. Look at your market (50 for new, 150 miles for used) and strive to be the number #1, that's all that matters.
 
Lexus Sets the Price and That's the Price.

"Lexus revealed last week that it is launching a multicity dealer pilot program for "non-negotiation" retail sales. Throughout 2016, 12 of the luxury brand's 236 U.S. dealers will try to sell vehicles at set prices that will make customers happier -- Lexus hopes -- while still allowing the retailers to make money."

Full article

Check out this thread, too. Here, we were talking about training the dealership on making a one price, no haggling work. Sure, you can say you have a one price store - but HOW does that work?
 
  • Like
Reactions: joe.pistell
Dealer Lexus leadership.


Saturn. :rip:
Scion. :wstupid:
JC Penny. :rip:

I don't know.. they're not going to force it onto the rest of the dealers, they just want to try it. This experiment could give them great insight into their pricing, dealer network, regional variances, etc. I'm a big fan of OEMs at least putting in the effort to gather data about their customers and dealer network. Look how many people on here who run dealerships or work with them every day and they can't all agree on whether one price makes sense or not - I don't believe we have enough information to make a consensus and I haven't even looked at it from the perspective of luxury brand vs entry level.

As for Scion, I like their business model and haven't seen it fail yet but I'm keeping a close eye on what they're doing with Subaru, Toyota internationally, etc.
 
I'm with ya Craig. Lexus is conducting a test and that's smart. JCPenny never tested the one-price theme, they just rolled it out and it almost bankrupted them.

That being said... this is not an easy test.

On the dealer side, this is a cultural change that'll need training to make it work. Depending on the rules from Lexus, shoppers will walk and reps will whine.

On the OEM side, we're in a very dynamic market where customers are selfishly looking for what's best for them. When Lexus goes to a publicly printed one price, it's competitors will react and counter.

Lexus leadership should be able to see this coming and arm their dealers with a truck full of weapons to make sure they don't fail.
 
Every SUCCESSFUL one-price store I've ever seen has one thing in common - Commitment. As @JoePistell said, this requires a cultural change, a change that's hard to accomplish in a "market test". But as Joe went on to say, customers are looking whats best for them; some customers are looking for the best possible deal, while other customers prioritize saving time and reducing aggravation higher.