|POSITION:||Vice chairman, Duval Motor Co., Jacksonville, Fla.|
|ACHIEVEMENT:||Converted four stores to no-haggle pricing while increasing sales, profits and customer satisfaction scores. In 2015, new and used combined sales were 12,177 vehicles for the six-store group, up 32 percent from 2014|
Alex Graham said phasing in no-haggle pricing at some Duval Motor Co. dealerships over the last few years has been worthwhile despite a few "skinned knees" early in the process.
"We can take care of the customer better, speed the transaction process, sell as many or more cars in less time and hopefully work less hours," Graham said. For instance, he said the no-haggle stores are closed Sundays, which is unusual for the market.
Graham, 35, and his brother Hampton Graham are co-vice chairmen of Duval Motor, in Jacksonville, Fla. The group has four dealerships in Jacksonville and two in Gainesville, Fla.
Since 2010, the Jacksonville stores have converted to "negotiation-free" selling, Alex Graham said. The brothers have a partner who operates the Gainesville stores, which have not made the switch, he said.
"When we started it, we thought it would help us recruit from outside the industry," he said. "We have hired more college grads and people with previous nonautomotive experience."
Initially, some seasoned salespeople left, but some of them have come back, Graham said. "I think they are more comfortable with the model in the marketplace now," he said.
"It's not necessarily a better way to do business; it's just a different way to do business. We wanted to be able to attract a different type of person to the automotive environment," Graham said.
Besides no-haggle vehicle pricing, the dealerships also have set prices for finance and insurance products, he said. In addition, Graham said the dealerships follow National Automobile Dealers Association guidelines to pick a fixed ceiling for dealer reserve on finance contracts and to document any exceptions to the rule.
Besides faster transactions, the payoffs from no-haggle pricing are greater transparency and customer satisfaction, he said.
"The people who benefit the most from the negotiation-free sales environment are people without access to the Internet and the elderly," Graham said.
He said, "A little old lady, when she comes in [to a traditional dealership], the price she gets has less to do with her ability to negotiate than it does with whether she's seen the invoice price on the Internet, like every single young person who walks in the door."