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At dealerships, behold the era of the slow talker

Published Oct. 12, 2005

"Be-backs" used to be no-nos in the auto industry.

"Be-backs" are customers who would go into new-car showrooms, ask for prices and leave _ promising to "be back" sometime in the future. They seldom returned, which was why dealers hated them.

Now that's changed a bit. Be-backs are beginning to come back, attracted by a new approach to sales at a number of dealerships that veers sharply from the stereotypically high-pressure, hard-bargain model of car dealing.

The new style, built around fixed, no-haggle prices and patient explanations of cars' features, has been pioneered by General Motors Corp.'s small-car subsidiary, Saturn Corp., and by the luxury divisions of Toyota Motor Corp. and Nissan Motor Co. Ltd., according to dealers and industry analysts who have been studying the development.

Sales figures _ particularly at Saturn _ suggest that the new method works, although some skeptics wonder whether the changes are more a response to hard times than a change of heart.

Still, there is belief that the marketing revolution is for real, even if some of the dealers and their manufacturers who compete with Saturn wish it weren't so. The reason is that the impetus for change is coming from consumers themselves, said J. Ferron, a senior partner at J.D. Power and Associates, a California-based marketing research and information firm.

"Dealers are responding to consumer demands," Ferron said. "Our surveys say that consumers are tired of the stereotypical, fast-talking salesperson. They are demanding respect and substance, real information, from their dealers," he said. As a result, car dealers, as well as other retailers, finally are getting the message "that consumers aren't stupid," Ferron said.

Saturn, which began producing cars in July 1990, exemplifies the trend.

Saturn sells cars with base prices _ the price with standard equipment only _ ranging from $8,395 to $12,700, depending on the model. But these base prices are the same at all 250 Saturn dealerships nationwide and are not negotiable. Thus, there is no haggling, no fear of going home to find that your neighbor got a "better deal" on the same car.

That one-price strategy helped boost Saturn's sales to 22,305 cars a month in July from 10,204 a month in January of this year.

But pricing is only one part, and possibly the least significant part of the Saturn story, according to industry analysts and some auto dealers and their representatives.

What's working, they say, is Saturn's realization that economy-car buyers want the same treatment given to buyers of expensive models, such as Toyota's Lexus, Nissan's Infiniti and Mercedes-Benz, Ferron said.

It is "treating customers with respect, giving them substance _ giving them real information" about their intended purchase, Ferron said. "It's not wasting their time." The activity in Saturn of Sterling, Va., owned by Johnny Koons Jr., is indicative.

"About 95 percent of our business is "be-backs,'

" said Koons. "People come in here and are greeted courteously. We've sold all the cars on the lot, except demonstrators used for test drives. But even so, we take time with those people. We show them the brochures, show them the car, tell them how we operate. Most of them leave here and shop around at other dealers for other brands of cars," Koons said. "But most of them also come back and buy from us," he added.

At Saturn of Marlow Heights, Md., one of eight dealerships owned by the Pohanka Automotive Group, the story is similar.

People who say they will "be back" are taken as seriously as those who sit down to sign a purchase order on the first visit, said Geoff Pohanka, president of the dealership chain. "It helps that we have a good product and that it's priced right; but I really believe that product is only one-quarter of the reason for our success with Saturn," Pohanka said. "Saturn is as much process as car," he said.

The process starts with answering all consumer questions, including those about pricing, accurately and courteously, Pohanka said. It involves "walking the customer around the car," demonstrating all of the car's functions and answering all questions.

This process can last an hour or two, longer than many salespeople are willing to spend on a be-back. But the upshot is that many of those who go away without making a purchase later return, Pohanka said.

Saturn dealers say they also take the stress out of bringing the car in to be fixed. They have a good relationship with the manufacturer, which makes it easy for them to be reimbursed for repairs covered by warranties.

Dealer representatives doubt that Saturn's one-price strategy can be duplicated, even though Ford Motor Co. is conducting such an experiment with its Escort economy cars.