Pfaff Subaru: Selling Transparency

Pfaff Subaru: Selling Transparency
The 20,000 sq. ft. Subaru store is located in Guelph, Ontario. (Photos: Jack Kazmierski)

Pfaff Subaru ushers in the group’s next-generation customer experience.

Paul Cullen, General Manager of Pfaff Subaru

As the newest addition to the Pfaff Automotive Partners family of dealerships, Pfaff Subaru, located in Guelph, Ontario is doing business with a focus on transparency.

Not only does the new store, which opened its doors in January of this year, offer its best price up front, but it has also removed the F&I manager from the equation, opting instead to have a single point of contact (a commission-free salesperson) for the customer throughout the entire buying process. In addition, a money-back guarantee and exchange policy provide customers with additional peace of mind.

“There are a number of reasons we have adopted this approach,” explains Paul Cullen, General Manager of Pfaff Subaru, “one of which is that it helps us attract employees. There aren’t too many people who want to sell cars anymore, so it allows us to attract people who are younger and brighter— people who have a passion for the industry—and prefer to interact with the customer, which is what we’re focused on.”

Every vehicle is priced individually. “Our philosophy is that we price our cars and not our customers,” Cullen adds. “We know what the cars will sell for. We’ve done our research, and we know based on colour, trim, equipment, availability in the market, and other factors what the price should be.”

He adds that the price is not static. It may change, going up or down based on market conditions. But when the customer steps into the showroom, the price is set for that day, and they know what they can buy that car for.

Every car has a sticker on it listing the MSRP along with the store’s price. “Our cars are currently priced under MSRP,” Cullen says, “but that may change in the future, based on market factors.”

The bottom line is that pricing is transparent. “We don’t have any fees,” Cullen adds. “We’ve taken away any dealer and administration fees, so the price of the car is the price plus taxes and licensing. There are no last-minute surprises.”

Without a traditional business office, the customer only interacts with one sales consultant, and there’s no going back and forth with the F&I manager. Instead, the salesperson guides the customer through the purchase experience, including F&I products. “We’ve narrowed down the portfolio of [F&I] products to items that we understand will provide real value to customers,” Cullen adds.

An experiment in transparency

This approach to doing business is vastly different from the status quo in the market today. And while Pfaff Subaru has hit the ground running wholly invested in this new approach, other stores in the Pfaff family are dipping their toes into this next-generation customer experience.

“Three of our other dealerships are using parts of our process,” Cullen says. “Our Mazda dealership in London was the first to implement a one price philosophy, which means no negotiation on the sales floor. We just launched our two BMW dealerships with the same program. They started May 1st with the one price approach.”

At the moment, none of the other Pfaff stores are pursuing the one-touch strategy. “We’re the test bed for that, and they’re watching our results to determine if they’ll follow suit,” Cullen explains. “It’s going well; we’ve got some growing pains. The early results are very promising, but we do have areas where we need to improve.”

Customer experience

As might be expected, most consumers prefer the non-confrontational approach to car buying. “Generally, the vast majority of our customers are relieved,” Cullen says. “They’re more comfortable and more relaxed. It’s a much more collaborative approach. We’re focusing on making their experience as simple and as painless as possible.”

Each customer knows what to expect, from the moment they step into the dealership. The new approach is explained to them clearly as part of the “what makes our dealership unique” part of the presentation. So there are no surprises as they get deeper into the sales process. The customer knows what to expect.

In fact, the difference between traditional dealerships and Pfaff Subaru is self-evident the moment a customer steps onto the showroom floor. Instead of traditional sales desks, the floor features round bistro tables.

“All the sales consultants sit at circular tables, and there’s no assigned seating,” Cullen adds. “They work on tablets, sit beside the customer, and we show them our screens. It’s all about transparency. We work with them to find the best vehicle for their budget, and because we’ve taken away the negotiation, we’ve sped up that part of the process because the customer already knows what the price of the vehicle is going to be. Now, it’s just about finding the right product, the right payment terms.”

Even the sales managers are on the floor, so there’s no more, “I gotta go check with my manager,” and no more secret conversations behind closed doors. The customer is invited to interact throughout the entire process.

While this way of doing business may not be the norm today, it certainly appeals to today’s consumers. This level of transparency may be avant-garde, but it’s what today’s consumers expect and demand. It may well be the way of the future.

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