The gospel of Joe Laham: Don't dicker about price
Massachusetts dealer and no-haggle advocate Joe Laham: "I'm going to sell more for less and make it up in volume? ... We're not interested."
Printed in Automotive News May 2, 2011
If there were a Church of No Haggle Pricing, Joe Laham would preach from the pulpit every week.
Laham, a Massachusetts dealer, believes the old way of selling cars by haggling over price is a relic of the 1950s that can't survive the age of the Internet.
He abhors cutthroat discounting because it destroys dealer profits, trust and credibility. He sees a vicious circle that leaves everybody feeling lousy: the dealer, the dealership employees and the customer.
"You put them on the cross and crucified them. To make up for one crucifixion, you crucified many," says Laham in his thick Massachusetts accent. "I'm going to sell more for less and make it up in volume? That's like burning in hell. We're not interested."
For Laham, the path to salvation lies with no-haggle pricing on everything the dealership sells, from new and used cars to service contracts.
Laham, who began his working life pumping gas and doing repairs at his father's filling station, began his pure price system 10 years ago at his Premier Cape Cod Chrysler-Dodge-Jeep-Ram dealership in Hyannis, Mass.
He has carried it over to Premier Cadillac in St. Augustine, Fla., and the store he bought in November, Premier Toyota in Newport, R.I.
Laham isn't the first dealer to use a one-price, no-haggle system, but he embraces it with evangelical fervor.
"People are so tired of the old-fashioned way of doing business," he says. "There's an open highway out there to navigate any information you want."
Jesse Toprak, vice president of industry analysis for TrueCar.com, which offers a one-price selling system to dealers, says dealers like Laham are embracing the inevitable.
"If you look at the big auto dealership groups like Lithia and Sonic, they all have pilot programs in place," he says.
In 2010, Laham's Premier Chrysler sold 835 cars, divided evenly between new and used. Premier Cadillac in St. Augustine sold 450, also evenly divided between new and used.
In the gospel according to Laham, commission is a cardinal sin.
He believes commissions are one reason car dealers find it so difficult to keep good salespeople. He asks: "Who wants to go to work in a place where you don't know what the hell you're going to make?" Instead of commission, he pays salespeople a salary plus a flat per-vehicle fee.
The key to Laham's system is discipline and getting all his employees to buy into it. Their job, in his view, is to help consumers already armed with information make the correct choice.
"You have to believe in it," he says. "If the sales staff compromises the system in any way, the integrity goes right down the drain."
For new cars, full disclosure means briefing customers on all incentives, dealer cash and stair-step programs being offered by the factories.
"If there's a stair-step objective, we tell the customer. He adds: "We give [the customer] the $500" even though "we don't like it that the manufacturer does that crap."
Laham's one-price system fits nicely with Fiat, which is returning to the United States with one-price sales. Laham won a Fiat franchise, one of 130 Chrysler dealers to do so, and he believes his one-price philosophy helped make his bid successful.
If customers want to haggle, Laham's staff tells them they're welcome to shop elsewhere.
"The fact of the matter is you can beat our price any day of the week," he says. "We don't build our business based on the lowest prices.
Laham says his customers are more disposed to buy products from his F&I department because they feel good about the way they were treated during the vehicle purchase.
"We pray to God," he says, that "they come to us and say they're so much happier with the process."
To which he hopes his customers say, "Amen." c
You can reach Bradford Wernle at firstname.lastname@example.org.