TRAVERSE CITY, Mich. -- Lexus is testing out a non-negotiation approach for dealers in a bid to improve customer satisfaction.
Long an industry leader in make-the-customer-happy retailing, Lexus is piloting a haggle-free program with 12 of its 236 U.S. dealers this year, says Jeff Bracken, general manager of Toyota Motor Sales U.S.A.’s Lexus Division.
“While negotiation-free pricing is not revolutionary, we strongly believe the concept will further elevate transaction transparency and customer care,” Bracken said today during a presentation at the CAR Management Briefing Seminars.
Negotiation-free selling requires an auto dealer to commit upfront to a fair transaction price on vehicles, and then to convince shoppers that the price is indeed honest and fair, and that the dealer is committed to it.
General Motors’ Saturn brand started an emphasis on “one-price selling” in 1990, when Saturn dealers worked to focus their conversations with entry-level car buyers on product instead of price.
But the luxury-car arena has become a slugfest between Mercedes-Benz, BMW and Lexus in the past few years. Although Lexus sales have been growing and the segment as a whole has expanded, Lexus was displaced as its sales leader by BMW in 2011.
For the first seven months of this year, Lexus U.S. sales were up 14 percent to 188,664 vehicles. But it is trailing its two German rivals. Lexus, however, won the monthly luxury U.S. sales battle in July.
Luxury-segment players are trying an array of new ideas to win the hearts and loyalty of customers -- such as BMW’s creation of showroom “Genius” personnel to talk to shoppers about its vehicles.
Bracken told the Traverse City audience that his brand also has created a program called The Lexus Difference, which will attempt to give customers “a more personalized experience.” He did not provide details.
Lexus also has launched a more female-friendly program Bracken called “Ladies Night Out.” In that initiative, dealerships have begun offering technology and how-to events targeted at women customers.
Although the Saturn brand disappeared, other dealers around the industry continue to work with one-price selling on an individual basis. Proponents say that the process of haggling over a price often taints a buyer’s attitude toward the dealership.
But opponents of non-negotiation sales have been unconvinced. Critics say car-buyers want to haggle over a sales price, and continue to do so even in negotiation-free showrooms.