Transparent pricing: Lexus Plus is no haggle, no agita
You’ve had this experience, right? You go to Neiman Marcus to buy a pair of Prada shoes and the sales person has to check with the sales manager before offering you her best price. She then reminds you that the contrast stitching and soft leather insole cost extra. Then, you sit down with the finance manager to figure out how you’re going to pay for them and several hours later, you finally walk out of the store with your shoes.
Ridiculous in retail, right? So why isn’t it ridiculous in car sales?
That’s what Lexus was thinking, too
Even though car pricing is more complicated than shoe pricing, the company has come up with a plan to simplify the process: a no-haggle price policy so that the experience is clear, comfortable and in the end, rewarding. “We wanted to elevate the ownership experience,” said Peggy Turner, VP of customer experience at Lexus.
The company is rolling out a program called Lexus Plus, which will test changing the way people buy cars at dealerships. The program will feature clear pricing and customers work with a rep (called a consultant) who will walk buyers through the entire process, from deciding on the model and features to financing, so you’re not handed off from one person to another.
How is pricing decided?
Prices for each model are set by the dealers who offer Lexus Plus (and prices may vary dealer to dealer). The dealers take into consideration all the factors that go into pricing a car: their cost, what they paid for the car, dealership overhead and more, and set the price for each model. A sticker right on the windshield shows the final price.
Will there be markdowns?
Maybe. Since pricing is up to individual dealers, they are free to mark down models, too. So just like in some of your favorite retail stores, you may see end of season sales.
Is Lexus Plus more expensive?
Maybe. Maybe not. This question largely depends on what a buyer expects from her ownership experience: a dealer who approaches the sale with transparency, who wants you to have an excellent experience, and who wants to build a relationship with you. There may be dealers in the region who will offer the same model for a lower price, but Lexus believes that many of its customers will look at the whole experience of ownership, not just the price of the car.
Eleven dealers will offer no haggle pricing
Lexus Plus is rolling out in these dealerships:
- Berlin City Lexus of Portland, Maine
- Bergstrom Lexus, Green Bay, Wisconsin
- Kuni Lexus of Greenwood Village, Colorado
- Lexus of Lehigh Valley, Allentown, Pennsylvania
- Lexus of Bellevue, Washington
- Lexus of Lincoln, Nebraska
- Lexus of Omaha, Nebraska
- North Hills Lexus, Pittsburgh, Pennsylvania
- Rohrich Lexus, Pittsburgh, Pennsylvania
- South County Lexus at Mission Viejo, California
- Tom Wood Lexus, Indianapolis, Indiana
The company expects the program to be adapted by more dealers, too; there’s a lot of interest in implementing the program if it’s successful, Peggy told us.
Dealers rolling out the program are “hand-raisers,” she says. “They heard the plan and wanted to try it out. But there is a lot more interest among the broader dealership community; the idea of no-haggle pricing will make the entire process easier for the dealer as well as the customer.”
Why do this? Customers asked for it
The Lexus Plus idea was born when customer feedback showed that car buyers want transparent pricing and a streamlined process that makes buying a car easier and faster. The program puts this feedback to the test. Typically dealers compete on price, offering discounts or incentives to sell cars. Lexus will learn which is a bigger lure for their customers: transparency or discounts.
And on Lexus’ side, the no-haggle pricing strategy is just one more rose in the crown of a great customer experience: from one-hour oil change appointments to “Service Connect” that contacts owners to schedule an appointment when service is due, to tech specialists who are on call in dealerships to help customers with technology questions – the mission is to build a relationship with you, not just sell you a car.