MINNEAPOLIS -- After more than 15 years selling cars, Bill Krouse was bothered in 1992 that the most demanding customers usually got the best deals. Customers who were nicer -- and often more loyal -- paid more.
"It just didn't seem fair," said Krouse, then the general manager at Polar Chevrolet-Mazda in the Twin Cities suburb of White Bear Lake, Minn. The dealership sales culture was all about separating customers from their cash, not building repeat business.
As a Cub Scout leader who was teaching his 7-year-old son the Cub Scout promise that year, Krouse re-examined his own life and values. "There was no award to trip a little old lady with a cane carrying a bag of groceries," he said.
It set Krouse, now 61, looking for a better way. He said he found it in the one-price, no-haggle sales model just starting to pick up steam in the industry in the early 1990s. With the blessing of majority owner Thane Hawkins, Polar converted to one-price on Sept. 28, 1992; it was one of the first stores in the Twin Cities market to do so.
"It was a turning point for the dealership and for the marketplace," said Krouse, now vice president and part owner of Polar, where the parking lot and showroom are dotted with "no haggle" and "no hassle" signs.
A dad's Cub Scout-inspired epiphany helped trigger a transformation of the Twin Cities market. Eighteen years later, helped along by consumers' increasing access to pricing data, as many as half the dealerships in the Minneapolis-St. Paul area operate under a one-price or limited-negotiation value-pricing model, according to estimates by local dealers and other industry representatives. Call it "Minnesota nice" meets the Internet.
The three largest dealership groups in the market -- Luther, Morrie's and Walser -- are on board. While adhering to the model is hard work, business is going well, better than if they had stuck with traditional negotiations, some say.
John Buelow, a retail consultant at Wipfli LLP in the Twin Cities suburb of Edina, with customers across the country, doesn't know of another major market with such a high concentration of one-price and value-price stores.
"We have maybe reached a little bit of a tipping point," Buelow said. "When you have a high concentration of dealers that control that many points, then it becomes pretty pervasive pretty quickly, especially if they're trying to keep up with each other."