Priority 1 Automotive Group tests no-haggle, Internet sales


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Sales upheaval

Priority 1 Automotive Group in Towson, Md., implemented a negotiation-free sales model at two stores and paired it with a new digital storefront.

CarMax led the way in no-haggle pricing for used autos, but the practice is still fairly uncommon among franchised dealerships.

More retailers, however, realize they need to adapt to the modern car buyer to maintain, or improve, sales levels. Some are ditching the traditional business model of negotiated pricing and commissions in favor of making the customer feel special and simplifying the purchase.

One of those making the switch is Priority 1 Automotive Group in Towson, Md., a nine-roof enterprise with about 4,000 new and pre-owned sales per year. Five months ago, it implemented a negotiation-free sales model at Mini of Baltimore County and Audi Owings Mills. Company officials say they are confident the system, paired with a new digital storefront and a laser focus on customer satisfaction, will boost results.

“We wanted to make the process more enjoyable and make it more about the customer getting exactly what they want,” said Alison Cohen, vice president of the group.

She pushed for the move after hearing about, and visiting, Schomp BMW and Schomp Honda in suburban Denver, where she observed that customers seemed much more relaxed and enjoyed their experience. Cohen said Mini seemed like the ideal brand to test the concept and hopes to roll it out to the group’s other rooftops once it’s perfected.

Training for transition

Sales upheaval

Priority 1 Automotive Group in Towson, Md., implemented a negotiation-free sales model at two stores and paired it with a new digital storefront.

To help with the transition, she enlisted the Rikess Group, a consulting firm that provides training for negotiation-free and Internet sales. Over two weeks, managers and salespeople learned how to explain the one-price process to customers, carry out Internet sales, shop other stores online and make comparisons. They engaged in extensive role-playing, aided by thick briefing manuals and online tools.

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As part of the restructured process, managers are involved with customers early and often, even riding along during the appraisal.

So far, the new approach seems to work a little better on pre-owned cars, Cohen said, but overall sales appear on par. It’s too soon to make any direct comparisons with past years, but customers are more at ease, and the overall customer experience is better, she added.

Client advisers aren’t paid a sales commission. They get a bonus for every unit they sell, no matter the transaction value. And customers get peace of mind with a three-day, 300-mile exchange policy if they don’t like the car.

The salesperson’s mindset is “I just want to help find you the car that’s best for you,” Cohen said. “I don’t care whether I sell you a $50,000 car or a $30,000 car.”

Dealerships that operate negotiation-free are still the exception. While many people lament the negotiating process, they typically like having the ability to negotiate once they become potential buyers, according to industry officials.

Still, the concept is gradually growing. In 2016, Lexus introduced a no-haggle pricing, single point-of-contact model, but only 12 out of 240 dealers have adopted the program so far, according to Lexus spokesman Ed Hellwig.

Going digital

Priority 1 also hired Palo Alto, Calif.-based Roadster to create a digital app and storefront on its website that automates the sales process. Customers can search the dealership’s inventory, determine whether to buy or lease, calculate the best down payment and finance terms, apply for credit, enter trade-in information and get the Kelley Blue Book instant cash offer, select aftermarket service contracts, upload insurance information and complete other steps before they arrive at the store.

A recent Audi customer was at the mall shopping with his family and did the entire purchase on his smartphone, Cohen said.

Bill Keyes, director of operations at Mini of Baltimore County and several other stores, admitted he was a skeptic of the no-haggle concept until he experienced the Rikess Group’s training program. Now, the sale process is built around transparency and putting the customer first.

That means sales consultants adopting the mindset of the consumer and understanding how much research they’ve done ahead of time.

“You don’t waste your time showing customers cars they can’t afford, or they don’t want,” he said. “The customer is constantly involved in it. They know what’s going on. It’s no more a hide-your-peanuts shell game. That’s all gone.”

Keyes said the negotiation-free model is also helping the Mini store attract college-educated salespeople who are more interested in explaining the product, providing a good experience and having time off, than making top dollar.

Sales upheaval

Priority 1 Automotive Group in Towson, Md., implemented a negotiation-free sales model at two stores and paired it with a new digital storefront.




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