In May 1997, when Bill Marsh Auto Group changed to the one-price sales concept, the company also converted to a salary-based system of paying its salespeople. Bill Marsh Jr., one of the partners in the business, says the changes were two sides of one coin.
'It doesn't make sense to pay commissions when you're a one-price dealership,' says Marsh Jr., 40. 'Saturn showed us a different paradigm. The fact that they could do so well with the one-price system showed us that we could do it throughout our company.'
The other partners are founder Bill Marsh Sr., Jamie and Mike Marsh (Marsh Jr.'s brothers), and Kevin Foster. The flagship Buick-Pontiac-GMC outlet has been around since 1982; the Chrysler-Dodge-Jeep store was added in 1988; the Saturn dealership in 1992; and the used-car superstore, Price Point Used Car Supercenter, in 1998. The latter is in a separate location, but the new-car dealerships are all in one contiguous complex, the Bill Marsh Family Auto Mall in Traverse City, Mich.
Marsh Jr. says going to one-price selling is one of the most productive steps the group has ever taken. 'First, it differentiated us from the competition,' he says. 'It also enabled us to attract a wide range of salespeople and other employees.
'One price changed our culture. We still try to sell the car, but now the focus is on selling value instead of trying to manipulate the customer psychologically. Remember, part of the salesperson's compensation is still based on selling as many cars as possible, but the price of the vehicle has nothing to do with it.'
Instituting the one-price/salary concept has attracted a different breed of salesperson, according to Marsh Jr. 'They are more stable and more consistent,' he says, 'and they truly believe that the way we do things is the right way.
'One of our top salespeople is a former teacher. She said, `I would never have dreamed of coming to work here if you were not a one-price dealership.' Our people like the salary system. The ones who liked negotiation have left the company. But the fact is, a salesperson can make as much or more with the one-price system.'
Before arriving at today's positive situation, there was a bit of a bumpy ride. 'We started it in the spring, and it was easy at first,' Marsh Jr. recalls.
'Then, in the fall of '97, it got tougher. After about six months, people - mostly those who had been with us in the commission days - started complaining and blaming every problem on the one-price system. But we got through that OK, and since then it has worked well. You just have to make a serious commitment to training and coaching.'
The structure of the group's salary system has evolved and is much simpler than it was in the beginning. 'At first, we were trying to reward many different behaviors,' Marsh Jr. says. 'You have to remember that `line of sight' is important to a salesperson: `If I sell X number of cars, I'll make X amount of money.' '
While he's a dedicated proponent of the salaried-salesperson system, Marsh Jr. admits there are challenges, the biggest of which, he says, is that many job applicants are motivated more by security than by opportunity. Once they reach the target salary they've established for themselves, they don't work quite as hard.
On the plus side, sales staff turnover has been reduced dramatically. 'There is a greater sense of loyalty,' Marsh Jr. says. 'People won't sell you out for a better pay plan down the street. We were the only alternative for salespeople in the area who didn't like the negotiation/commission system, and we're still the only one-price dealership in our market.'
The concept would work in any market, Marsh says, but he doesn't think it's for every dealer. 'You have to be truly committed to the one-price philosophy,' he says, 'truly committed to eliminating the negotiation system.'
Choosing the 'road less traveled' has meant severing some old ties while forming some new alliances. 'Other dealers think we're crazy,' Marsh Jr. says. 'When we went to the one-price system, many of the dealers in our 20 Group thought we were heretics. Now, we're in a 20 Group that's all one-price.'