Asbury considers expanding vehicle-pricing plan
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Asbury Automotive Group is evaluating whether to expand a no-dicker sales model to more markets and brands.
The model, called Asbury Preferred Selling, was launched at three stores, selling BMW, Mini and Acura, in Richmond, Va., in early 2011. The goal is to replace confrontational negotiations with low upfront prices, cut transaction time, drive volume and improve customer loyalty.
The experiment was expanded in May to a BMW store in the Atlanta suburb of Decatur, Ga.
Asbury executives call results promising, with lower marketing costs, substantially higher scores on dealerrater.com and a reduction in sales staff turnover. Five other general managers at stores in Asbury's network have raised their hands to be considered for the program.
"We have to have someone who truly wants to do it," Asbury COO Michael Kearney said. "It's just a matter of deciding which phase of our learning we want to get to next, whether it's a brand learning or whether it's a market learning."
Vehicle prices are firm under the Asbury Preferred Selling approach. But executives don't consider it a one-price model, since prices are adjusted weekly to reflect availability and other transactions in the local market. It requires more administrative oversight, Kearney said, because vehicle pricing must be monitored and adjusted frequently.
Sales staffers are trained to present only the product. Some of the pilot stores have used iPads to assist in the presentation, but Kearney said Asbury is still in the learning phase on that. Sales reps are paid a salary, plus bonuses that are based on customer satisfaction, owner loyalty and retention. There are no sales commissions, which sales staffers tell customers up front.
So far the participating stores have sold luxury brands, and the process probably is easier to implement in that environment, Kearney said. But the nation's sixth-largest dealership group plans to run the experiment at a nonluxury store soon, he added.
"My belief is that it is applicable to any brand," Kearney said.
Asbury doesn't have a timeline for expanding the program, Kearney said. He declined to talk about store profitability or specific metrics on the gains seen at the pilot stores.
But consumers have been receptive. Asbury is going online with customers to appraise trade-ins, offering the customer the highest price from three sources on the Internet.
Asbury says the program has met expectations. The proof, executives say, is in the good word-of-mouth their pilot stores are generating.
Kearney said: "We get a substantial amount of referrals on the program."
-- Lower marketing expenses
-- Higher scores on dealerrater.com
-- Less sales staff turnover
You can reach Amy Wilson at awilson@crain.com.
