Edmunds's No Haggle Video - Offensive?

[JessicaRuth]

Update: Edmunds has removed the video. BUT - It's still out there...

 

[JD Rucker]

I think it's a great idea! Instead of haggling, every car dealer in America should go to no-haggle pricing that is in line with other retail items. Instead of negotiating, let's just set the gross profit margin at a flat 10%. Compared to deli meet, jewelry, or furniture, it's a pretty low expectation to achieve 10%. Make it easier.

 

[skeetle]

A flat 10% - are you including dealer cash, retail bonus cash, financing cash, because-I-have-a-car-now-cash, etc? What a lot of consumers don't realize is that (at least in my experience) there is only about 10% (give or take a few bucks) mark-up in most vehicles MSRP -> Invoice. Sure I'm all in for 10% markup from invoice....

With that being said, people realize that there's a markup in every single other consumer good out there. Yet - they choose to haggle with us? Why? Becauase they've been conditioned to - they've been conditioned to "push for a little more" even if we're already as low as we can go - people don't realize that dealerships lose money on the [front] end of car sales.

The bigger question is how do we change the public perception of the situation?

 

[Alex Snyder]

The bigger question is how do we change the public perception of the situation?

I think it is in the works. Reduced profit margins are driving many dealers to look away from the practices they grew up with to embark into realms of retail that have been fairly foreign to our industry.

You see this in the stores that have adopted one-price. In a one-price store you have to put customer service at the top of your core deliverables. As one-price grows (through the lemmings method) more and more of the industry will grow to be more customer service oriented.

I'm watching the dealers who are seriously (some are just paying lip service) shifting their store/group's focus from sales to service ....these are really interesting.

 

[ed.brooks]

“Negotiating prices has always been expected... having it referred to as ‘haggling’ ... is insulting.”

I don't really think this is about negotiating or not negotiating - this is about being mocked - and then being charged for the privilege.

No one likes to be made fun of.

 

[jmcreavy]

You see this in the stores that have adopted one-price. In a one-price store you have to put customer service at the top of your core deliverables. As one-price grows (through the lemmings method) more and more of the industry will grow to be more customer service oriented.

I'm watching the dealers who are seriously (some are just paying lip service) shifting their store/group's focus from sales to service ....these are really interesting.

Alex - How does a one price store work? I've been told that one-price stores eliminate jobs as there is less need of Sales Managers and as many Finance Managers?

What are your thoughts of how it works and how it could work?

 

[Jeff Kershner]

"The Ferrari of Tuna" - classic!

 

[Alex Snyder]

Alex - How does a one price store work? I've been told that one-price stores eliminate jobs as there is less need of Sales Managers and as many Finance Managers?

What are your thoughts of how it works and how it could work?

There isn't one process for every one-price scenario and that means it doesn't necessarily eliminate jobs. Some stores do try to move F&I responsibilities to the sales agent, but management is still needed. Someone needs to order cars, put a number on the trade, and handle the HR duties.

Most people can be great at one specific job. When they're tasked with many duties that don't align with that job "great" isn't an expectation you should have. That's just plain human psychology.

Whether you're one-price or haggle-your-face-off basic psychology still applies and it is up to the head of operations to formulate the best organization for the goals of the business.

Since you asked for my opinion (warning - it is quite extreme compared to the traditional dealership)...
...I don't think sales agents make good paper hangers. And making them responsible of all the potential contracts in need of funding could be disastrous for the dealership's cash-flow. I'd prefer to task people with specific job duties pertinent to achieving a higher level of customer service. Make someone's largest responsibility getting deals funded, make someone responsible for inventory management using a combination of technology and gut, and then build a management role that is less about waiting for worksheets behind a tower and more about teaching sales agents how to be better at delivering a higher level of customer service. I would have a webmaster paid on the store's bottom line to include parts and service. The sales agents would be responsible for answering the phone and responding to any Internet leads that came in (however I prefer to build a website that inspires floor traffic over Internet leads - less leads is better in my book). And I would do this no matter if we negotiated or not.

 

[sryan]

Right off the press:

The following message will be delivered shortly to the media, and you are welcome to share it with your clients and other contacts as needed:

From Edmunds.com President Seth Berkowitz:
"Our digital videos illustrating the 'Absurdity of Haggling' missed the mark. Some of our partners were deeply insulted, expressing that our attempt at humor reinforced outdated stereotypes. That was obviously never our intent. It has created a distraction from our business of helping to make car shopping easier. We are terminating the videos and getting back to working with our dealer partners to improve the car buying process for car shoppers around the country.

 

[Jeff Kershner]

Right off the press:

[FONT=&amp]The following message will be delivered shortly to the media, and you are welcome to share it with your clients and other contacts as needed:[/FONT]

[FONT=&amp]From Edmunds.com President Seth Berkowitz:[/FONT][FONT=&amp]
"Our digital videos illustrating the 'Absurdity of Haggling' missed the mark. Some of our partners were deeply insulted, expressing that our attempt at humor reinforced outdated stereotypes. That was obviously never our intent. It has created a distraction from our business of helping to make car shopping easier. We are terminating the videos and getting back to working with our dealer partners to improve the car buying process for car shoppers around the country."[/FONT]

Should they be forgiven?