mmarshall

This is probably the article you were looking for, Jill. I'll post it.

http://www.thetruthaboutcars.com/201...on-lexus-plus/

Half an hour from Fort Lauderdale, in Margate, Florida, sits JM Lexus, the highest-volume Lexus dealership in the United States.

Even by Lexus standards, where throughput is the best of any premium automaker operating in America, JM Lexus’ 8,000-unit new vehicle sales tally in 2016 was striking. That’s more than 150 new luxury cars, crossovers, and SUVs sold each week. That’s roughly six times the volume achieved by the typical Lexus dealer.

And JM Lexus, perennially the top Lexus dealer in America, does so as part of the Lexus Plus strategy: no negotiating, a single representative per customer, fixed prices for new and used cars as well as service fees and accessories.

Perhaps there’s a lesson to be learned by Lexus’ other dealers. For the time being, according to Automotive News, only 5 percent of Toyota’s premium brand stores operate under the Lexus Plus model.

For car dealers, adopting a fixed-price model is no mere alteration of the status quo but rather a wholehearted transformation. The upsides are significant: more satisfied employees, happier customers, and greater profit. Satisfied employees don’t leave in search of greener grass on the other side of the fence. Happy customers return for their next vehicle. Greater profits can be reinvested back into the dealer, creating an even better space for employees to work and for customers to buy. A better space in which employees work and customers buy consequently makes for more satisfied employees and happier customers, and so the cycle continues.

But just as the upsides are significant, the downsides are well known. “If you’ve got personnel that are used to doing business very traditionally, they may not fit into the Lexus Plus process,” Lexus’ Greg Kitzens, general manager responsible for future initiatives, told Automotive News.

Indeed, personnel accompanied to a competitive environment won’t be pleased when customers negotiate a better deal on an RX350 at the Lexus dealer one town down the highway. The same group of existing employees, potentially older employees, would also need to be trained in areas such as F&I, areas in which they’ve never worked. In search of a more satisfied staff, dealers making this major transition might just discover a particularly unsatisfying metamorphosis.Switching to Lexus Plus, “was major disruption to our business,” says Peter Cooper of Allentown, Pennsylvania’s Lexus Of Lehigh Valley. “It took everything we learned over the last 35 years as a dealership group and threw it out the window.”

For JM Lexus in Margate, Florida, adopting the Lexus Plus strategy served to bring factory support to an approach that was already in place. JM Lexus was already the top Lexus dealer in America thanks to success the store enjoyed with a similar strategy prior to Lexus Plus.

“It’s a toll on our customers, but mostly on our associates,” JM Lexus general manager Jim Dunn says of selling 150 new vehicles per week. “We really want this dealership to reflect a culture that’s caring, that’s sensitive to what our associates need and what our buyers today are really demanding.”

That’s a toll many other Lexus dealers would be happy to pay. Regardless of whether JM’s fellow Lexus stores adopt the Lexus Plus strategy soon, it’s likely they will eventually end up with the same format.

“[Lexus] always play the long game,” NADA consultant Mark Rogers says.

According to Lexus HQ’s Kitzens, this is no experiment. “It’s one of these things where you’ve really got to burn the ship,” he says. If, after the ship is burnt, more Lexus dealers reap the kinds of benefits enjoyed by Florida’s JM Lexus, the gain will have been worth the pain.

For the time being, Lexus is looking back on seven consecutive months of U.S. sales decline; on 13 year-over-year sales decreases in the last 14 months. If boom times made blowing up the traditional sales model difficult, perhaps lean times will present Lexus Plus with some more early adopters.

Toys4RJill

Thanks, this was not but it will do. There was another that said it converting.

bitkahuna

iTrader: (20)

shric

Here is a practice I found at one dealer-
After negotiating a decent deal for 2016 RX450h with trade-in, they tacked on a "standard", non-negotiable Dealer Documentation fee. When I complained about the fact that it was not disclosed up-front, I was shown sales documents of previous sales- all showing the $375 charge. At that point, I guess I could have walked out, but after having spent a total of 4 hours door to door, I gave in. Next time, I will ask the dealer up-front about such non-negotiable charges and then use that info in my negotiated price. Live and learn I guess.

mmarshall

Virtually every franchise-dealership has that fee, in one form or another (company-owned Tesla shops may be an exception). It's just a matter of what they call it......Processing fee, Documentation fee, and Dealer-Overhead are just a few of the several different names they call it. Some states, like MD, regulate and/or put limits on it....others, like VA, don't. It's like the freight destination charge at the bottom of the price-sticker....very difficult or impossible to avoid. I have, on occasion, seen it lowered....on a new car my late mother bought, they cut it the fee in half. But most of the time, it's pretty much a given. No matter where you go, you will be facing it...if the state allow it.

RNM GS3

This only would work on ES and RX - all the other models are collecting dust.
Maybe new generation of buyers will accept this or women/older folk who mostly buy these Lexus models.

Toys4RJill

Should of walked out. You would see how fast they would chase you down.

mmarshall

Possibly, but don't bet on it. Some dealerships are as stubborn as the people they deal wth LOL.

Toys4RJill

Then good for them if they don't chase you down.

Toys4RJill

Back on topic.

http://www.cpbj.com/article/20170804...buying-process

Transportation

The Whiteboard: Lexus finds speed bumps in test drive of better car-buying process

By David Taylor, August 4, 2017 at 3:00 AM

(Photo / Thinkstock)You don't need a mountain of market research to discover that most people dislike the process of buying a new car. Haggling on price and trade-in value, discussing financial packages and extended warranty plans, and waiting while “I check with the manager,” often turn the joy of buying a new car into the bitter resentment of what it takes to close a deal.

If ever there were a brand experience that could be universally improved, new-car buying would have to be it. Yet very few automotive brands have been willing to significantly alter the car-buying process, in part, no doubt, because their dealerships generate so much of their profits using the existing system.

Enter Lexus, a leading luxury car brand, with some of the highest customer experience ratings in the industry already, but with a small slice of the luxury car market compared to BMW or Mercedes. About a year ago, Toyota’s premium car brand introduced Lexus Plus, which is a new process to purchase its vehicles where car buyers deal with one person only and prices are set—no negotiation required, no checking with the manager. The Lexus Plus concept also applies to service visits, where one service manager handles a customer from start to finish.

Among major automotive brands, only Saturn was able to sustain a no-haggle approach to new car buying. During its early success with the concept, some dealers for other brands adopted it, but with Saturn gone, the prevailing model is the one consumers continue to hate.


David Taylor - (Submitted)So, how is Lexus Plus doing? Depends on whom you ask. A year after its introduction, only 13 Lexus dealers out of 237 have adopted the program. Lexus wants us to believe it’s OK with a gradual rollout.

"Not only are dealers learning in this process, we too as a manufacturer are learning how to better support them in this transition," Lexus’ general manager of future initiatives, Greg Kitzens, told Automotive News. "It's one of those things where you've really got to burn the ship. You're not going back, and if you've got personnel that are used to doing business very traditionally, they may not fit into the Lexus Plus process."

It's hard to tell at this point what Mr. Kitzens is inferring about those who "may not fit into the Lexus Plus process." Will those dealerships be allowed to continue with business as usual or be forced to convert to the new system?

Because Lexus, like most automotive brands, doesn't own its dealerships, it can be complicated to proclaim the widespread changes that Lexus Plus requires. The majority of its dealerships appear to be waiting to see the results of Lexus Plus in beta form before making the substantial changes it would require.

All of which is evidence of how difficult it can be to change a brand experience for the better. Lexus clearly sees how to improve it for the consumer. Yet its partners in the process — its dealers — seem to prefer higher profits over better customer satisfaction ratings. For Lexus, the obstacle to changing the car buying brand experience appears to be convincing its own dealership network what’s best for the brand will also be good for their bottom line.

swajames

Thanks for posting that article.

I still continue to think that the current model isn't irreparably broken, I think the main problem is dealer behavior in general - it's not just whether or not the sales prices are fixed or variable. You absolutely don't need a model such as Lexus Plus to eliminate poor dealer/sales behaviors such as the artificial back and forth when the sales guy just grabs a coffee while you wait, salesmen trying to use the four-square method to obfuscate, bogus dealer add-ons, finance managers selling marked-up snake oil and the like. Any dealer could choose to eliminate those, empower the sales associate to negotiate and never make you sit in front of a finance manager. Any dealership could have your only point of contact from start to finish be a sales associate.

The current model may not be perfect, but neither is Lexus Plus. Dealers can choose to be easy to work with or hard. I'm done with dealers trying on the poor behaviors mentioned above and then begging for a 10 on the survey. That does, however, point to a possible solution for at least part of the dealer experience challenges. Fix the broken surveys where today only a 10 is a "pass", and reward/incentivize dealerships based on responses to better questions which customers feel able to answer honestly. If a dealerships margin or a salesperson's commission was contingent upon scores over time and feedback from properly designed surveys you'd see better behaviors in short order.

The issue with Lexus Plus is that it's arguably too big a leap from the current model because poor dealer behavior in the past means that consumer trust/confidence in dealers is low - and for good reason. I would not trust most dealers with a no-haggle system as I don't trust most car dealers full stop.

A halfway step to improve the experience in stages and improve confidence in the process in stages is the key to the future willingness of customers to buy into something like Lexus Plus.

RNM GS3

This no haggle pricing is BS and all Lexus dealers have that now without being Lexus Plus - Its called Internet Sales Manager.
Just email them and u will get quote much better than MSRP.

mmarshall

????

Not sure I follow you here. In most cases, the no-haggle price itself is much better than full-MSRP.

RNM GS3

Hence my point - It already exists.
Just write an email.

SW17LS

Just got quotes from 2 traditional Lexus dealers, emailed, got good quotes including good trade numbers from pictures within about an hour. Very friendly, respectful, no pressure. What's the big deal?!