One Price?

Maddy Low

I've heard so many awesome things about one price, but I'm wondering what the down side or difficulty with moving to one price is. Have any of you done it and disliked it, or had a hard transition?

mark rask

Total culture change 

Derrick Woolfson

It's that "P" word that makes people cringe. In a nutshell, pricing has been made overly complicated. I agree with Mark in so far as the "one price" would be a huge cultural change. I also believe that if OEM's had one price it would actually increase in PMA sales per dealer. As those who live within the dealer's parameters would shop at their "local" store. As of now, if John Doe Dealer is offering just $100 less than ABC dealer the customer will go there. Sounds simple, but the fact of the matter is that the first step in the right direction for a "one price" culture is the OEM starting to dictate discounts on new vehicles. Easing their way into the one price mindset. 

matt lamberth

My dealership is not a one price store.  I can only imagine the massive culture change that would have to happen in the store.  I think it sounds like a good idea, however, customers are always looking for a discount even though our market based pricing already reflects a discount.  How do you stay committed to one price when customers expect to negotiate?    

Kenny  Hammad

Mark Rask total culture change description is correct. However If you the only dealer doing that in your area you will suffer and loss sales.  You may want to distinguish your dealership with honesty, full disclosure, a good reconditioning process and a money back guaranty to earn the town respect and reputation. I know dealers some are doing this have doubled their group sued car business in the last 4 years.

Alan Krutsch

Full disclosure - our company, Ryan Adams Group, consults with dealers who are moving to a one-price business model. Clearly, we have a bias about which direction the industry is moving.

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One-price needs to be considered a business model, not just a sales process or pricing policy. When an organization decides to change their business model there is a lot of planning that goes into a successful execution. Successful implementations start with an assessment to gauge leadership and team commitment. Next, a plan is developed that includes brand promises, training requirements, communications plan, compensation models, and scheduling. Once this is in place and communicated the execution begins. After a successful implementation ongoing improvement becomes the key to high performance.

Maddy, difficulties usually arise from leadership that is not truly committed and lack of planning. That said, there are some one-price dealers that are really thriving in their markets. Here are a few I admire: Avondale Toyota, Walser Automotive Group, Tom Wood Lexus, Mullinax Ford, Honda of Seattle, Car Sense, Car Max, Rydell Chevrolet and Apple Autos. All of these dealers compete against negotiating dealers. They all attain enviable market share and profit numbers. The customer experience has become their key differentiator. Regardless of business model dealers who commit and execute always seem to prosper. Our point of view is that the friction and uncertainty that negotiation adds to the process is detrimental to an ideal customer experience. In today's Amazon influenced retail environment reducing friction and making shopping easier is becoming more important.

I read an article recently by Doug Stephens of Retail Prophet who made some good points about redesigning the customer experience. You can access the article here: Fresh Icing on the Same Stale Cake.

 

 

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