One Pricing: A Solution to the Wrong Problem - AutoSuccessOnline

One Pricing: A Solution to the Wrong Problem

AutoSuccess Magazine, auto magazine, auto dealership magazine, auto dealership, auto dealer, auto industry, automotive industryJim Russell

Yes, survey after survey has shown that today’s car buyers have a great distaste for the haggling they expect to undergo when they buy a car. One Edmunds survey showed 91 percent of Millennials want to avoid the haggling of a negotiation, while 33 percent of those surveyed said they’d actually prefer to make a trip to the DMV.

Of course no one enjoys haggling. But it’s not the sales price of the car being haggled about that’s so distasteful. It’s the poor quality of the salesperson’s communication that causes the haggling. That’s the real problem.

And one pricing does not solve that problem.

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The actual price of a car is a relative thing. A new Dodge Charger cost about $3,500 in 1978. Today, a new one costs eight to 10 times that. Customers know that. They just don’t want to pay more than they have to, and they don’t want to pay more than they would at another dealership. That’s all.

Conrad Hilton once said, “The buyer is entitled to a bargain. The seller is entitled to a profit. So there is a fine margin in between where the price is right.” Today’s car buying public only needs to feel they’ve bought right on that fine line. It’s not that price point that they’re trying to avoid at a dealership.

What they’re trying to avoid is the stress of haggling, and that’s a communication point, not a price point.

We’ve all met at least one salesperson who was so genuine, so friendly, so entertaining, who was so enjoyable to spend an hour with that we really didn’t know — or care — how much we were spending for that Buick, for that condo or for that piece of undeveloped land in central Florida. That person was truly charming and we walked away feeling good, regardless of what we paid. Why? Because the quality of her communication was so stellar. We may have negotiated with her, but we never haggled.

If your customers love the way you do business with them, if they feel at home with you, if they aren’t subjected to haggling, they don’t even mind paying a higher price for your product. Surveys show that, as well.

While it is true that brand of salesperson may be rare, it does illustrate an important point. We like dealing with someone who treats us honestly, kindly and respectfully. We like someone who makes us feel good about ourselves — regardless of what we’re paying for that Charger.

Hiring salespeople who approximate that level of customer service and who aspire to that level of quality communication is the real solution to the problem of why people today shun the typical car buying experience. One pricing is not the solution.

In fact, one pricing actually runs against the grain of many important traits of the car buying public.

Almost every buyer likes to feel they’ve gotten a bargain, for instance. That’s why so many shoppers set up their lawn chairs in the Walmart parking lot at four a.m. on Black Friday. They want a bargain. They want a deal. That’s why millions flock to the Las Vegas blackjack tables. They want to beat the system. They want to feel they’ve won.

You can’t feel you’ve gotten a deal or a bargain or gloat over beating the bank with one pricing.

And while it’s true that many women respond with fear to the car buying experience — often with good reason, given some of their prior experience with horrible, haggling salesmen — many men respond to it as a challenge. Like the Las Vegas crowd, they want to feel they’ve won, that they’ve been in control. They want to feel… well, like a man. They want to feel like they’ve cleverly negotiated a good deal.

None of that is possible with one pricing.

So, stop offering and advertising one pricing. Instead, start offering and advertising a pleasant car buying experience. Start hiring the sales and administrative staff who can provide that.

Your car buying public needs to know that you’ve changed the way you do business. Your purpose today is to help them buy a car, not to sell them one with force, with poor communication, with insincerity. In short, with all the elements that have led to the haggling that any sane person would want to avoid.

If you treat your buyers with genuine and sincere respect, a light touch and, ideally, a bit of charm, they’re going to tell their friends all about you. Then you can start worrying about how you’re going to handle all those new customers, rather than worrying about the gyrations you’ll have to go through to make a fair profit with that one pricing gimmick.

​A gimmick that creates more problems than it solves.

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