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The Fixed Price Strategy for Car Sales

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A group of dealerships in the northwestern United States has implemented several innovative strategies to boost sales. Photo Shutterstock

As part of its virtual meetings, Driving Sales recently featured a discussion with Marketing Manager Paul Schnell, who has developed an interesting strategy to drive sales in his network of 13 dealerships in the northwestern United States.

Over the past few years, the Alpha Auto Group network has gradually implemented a strategy aimed at simplifying the path of a potential new or used vehicle buyer, which has had a beneficial effect on sales volumes.

The first step was to set a single price for all vehicles on sale, both new and used, in all dealerships, in a gradual manner. “What this means is that our team will set the selling price, never exceeding the manufacturer’s recommended price, for all our new vehicles. It’s a fixed, non-negotiable price that will be the same in the dealership as it is on our website. Our customers have become accustomed to this approach. We want to have competitive prices compared to the market, but for us there is no question of negotiating with the customer once the price has been established.” One of the concrete effects of this strategy is that during the sales meeting with the customer, the advisor does not need to go to his manager to see if it is possible to meet a downward bid request.

Accessories and financing

“We don’t push accessories and financing products either. If the customer wants options or additional equipment, he pays the listed price, no discussion, no gifts. The important thing,” says Schnell, “is that the entire sales team is on the same page. It’s a matter of one advisor making a pass that this bending of the rule spreads among the customer’s family members who will then come in and negotiate benefits during their own buying process.”

The dealer group has also set up a formula where the advisor, the one who establishes the first contact with the customer, will lead the whole operation to its conclusion, including financing, the sale of options and accessories. Customers appreciate this direct link, especially in the current context, where they may have to wait a few weeks or more to get the vehicle they want and will want to be informed by their advisor of the progress of the delivery.

“You always have to put yourself in the client’s shoes,” he says. “What the customer wants is a simple process and someone they can trust and stay connected to. Even after the sale, our advisors will keep in touch with their customers, wishing them happy birthday, sometimes offering maintenance or simply asking if everything is going well with their latest purchase.”

Used cars

In the context of a slowdown in the supply of new vehicles, the Alpha Auto Group is banking on used cars according to two strategies. He makes sure to recover the vehicle that the customer will offer in exchange by offering the right price and guaranteeing it until the delivery of the new car. This practice could change, but the current market shows that the used car, in high demand, will retain its value even if the customer uses it for a few weeks.

The other approach is to entrust one person with the exclusive task of hunting for used vehicles by scouring resale websites and auctions. “We have also instituted a policy for all of our staff members that if they see a car for sale in their neighborhood to let us know. If the purchase closes, we offer them a bonus,” Schnell explains. The result is that more than half of the used vehicles we offer to our customers, especially those who can’t find a good fit in the new vehicle option, are not from trade-ins.”

 

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