For some people, parts of the car-buying process can be exciting—doing research, reading reviews, going on test drives. But the trip to the dealership to negotiate paying for your new ride leaves almost all consumers cringing.
A recent survey by CarGurus Canada reported only 45 percent of young shoppers felt satisfied with their dealership experience, and that number gets only slightly better as you ramp up the buyer’s age. Those numbers drop to 30 percent or less when you’re talking satisfaction regarding the actual negotiation.
Enter Greg Carrasco, the general manager at Thornhill Hyundai.
Carrasco, 44, has been in the auto dealership industry for over 25 years, and would agree that for the majority of consumers, the average dealer experience isn’t positive. In his opinion, dealers use outdated tools and wrong methods that no longer work on a more educated clientele.
The catalyst for this education and resulting empowerment? The internet. With many reviews and forums focused on cars and specific dealerships, customers now arrive loaded with informational ammunition, including the cost for vehicle from websites like Unhaggle and Car Cost Canada, to help facilitate the negotiation process.
Starting completely from scratch
Carrasco started to transform that process by instituting a non-commission sales system at Thornhill Hyundai February 1, 2016, soon after he took over as general manager.
He started with a blank canvas, with only himself, a business manager, and two people in the front as employees, one of them a holdover from past management and a supporter of the new system. The next step was to hire the rest of the staff, which he also did in a rather unorthodox way.
“I don’t hire people from the industry,” says Carrasco. “I want their first interaction with the car industry to start with me, and I will go out of my way to invest in new employees.”
Carrasco’s view may seem discriminatory, but he’s determined not to recycle salespeople from other dealerships, and hates the thought of pushing a sale or using terms like “always be closing,” which contradicts his customer service focus.
“[Our staff training is only] five percent about cars, and the other 95 percent is centred around people,” says Carrasco. “As customer service agents, we need to understand how people behave, what the customer is looking for, and how quickly their non-verbal cues can be understood in order to address their feelings or desires.”
For Carrasco, it’s all about transparency and not taking advantage of the customer. And with a non-commission sales approach, you can cultivate a relationship with them for years to come without having to quickly move on to the next kill.
When fair’s really fair
At the cornerstone of Carrasco’s philosophy is a fundamental right to be fair to every customer. “Why is it fair for a better negotiator to receive a better deal on a vehicle?” asks Carrasco.
He’s right—why do we do that? Probably because that’s the way it’s always been done.
Non-commission sales may be new and extremely challenging for most dealers to grasp, but it’s a practice that seems to be catching on this year with a number of U.S. Lexus dealers.
In addition, Tesla has been a frontrunner in the online movement for a while, and now Hyundai’s own luxury brand Genesis will soon adopt a nationwide online no-negotiation sales approach of its own.
Carrasco has his critics, but it’s hard to argue with his results: 1,700 cars sold this year, and a projected 2,500 for 2017. And most interestingly, 55 percent of those sales are made online, with many customers coming in only after an exchange of emails has sealed the deal.
The internet has broken geographical barriers and has made the car-buying process easy—customers have travelled from Montreal, Sarnia, Barrie, Newmarket and even as far as Cochrane (north of Timmins) to meet Carrasco and try out his no-nonsense philosophy.
Even more impressive is the dealership’s 96 percent Customer Satisfaction Index (CSI) score for October—the index used to calculate employee bonuses in lieu of sales targets.
“I pay them bonuses in happiness,” Carrasco says with a smile. “It’s paid on contributions to the cause.”
Stand-out service—but why?
If this non-commission sales approach is so successful for Thornhill Hyundai, why aren’t other dealers using it? Carrasco seems to have an easy time finding employees, who succeed despite their lack of experience at auto dealerships.
On top of that, there’s no in-house fighting, and all employees look after each other for the betterment of the customer and the dealership.
Well, simply, change can be difficult, especially when it’s a total rework of how the commission sales system has been built. For a drastic shift to happen, you need to a strong, vocal leader, plus the backing of the dealership owner group and company itself.
Carrasco has all of this – he’s obviously a great leader, but calls himself “a fixer” – and the backing of his dealership owner group, which gave him the keys to run the show how he wanted. He’s also got Hyundai president and CEO Don Romano in his corner, who’s well-known for pushing the envelope.
While the non-commission sales approach seems brilliant and may spread nationwide in a few years, there’s much more to Carrasco’s philosophy. Earlier this year he installed a one-price policy for used cars, where he and his team set what they deem is a fair price and there’s no negotiation whatsoever.
Thornhill Hyundai is different, too, in that women hold close to 60 percent of the jobs, there, mainly in the front of the showroom. It’s not something Carrasco purposely seeked out, but he definitely has no problem with it.
Getting car sales to go viral
Carrasco has no qualms about his plans, and you can hear him preach them – amongst other topics – on his weekly AM 640 radio show, from 9am to 11am Saturday. Yes, that’s right—he’s a radio star, too.
He started on the radio 10 years ago, eventually landing a Saturday morning spot that’s now the number-one weekend radio show in Canada. That platform has helped him reach out to customers throughout Ontario, which might explain his booming online sales.
Carrasco is an early adopter of most forms of social media, too, and has seen his verified Twitter channel rack up some 73,400 followers; his Instagram page is now up to 18,400.
“The best part about it is that it’s free; I’ve never spent this little money on advertising,” explains Carrasco. “Potential customers go on Twitter, Instagram, etc. by choice, which makes them far more receptive to the message.”
“Advertising is gone and conversation is in. People want to talk about this stuff, they don’t want to be sold.”
The next five years
Carrasco’s plan looks like the future, but he has his fair share of aforementioned naysayers, people he believes don’t really understand what he does at Thornhill Hyundai.
However, many are paying attention and slowly making adjustments themselves. It’s all about adapting to a world where Millennials who don’t care for the “old system” will look to different avenues like YouTube, Twitter, and the web to get what they want.
That’s what Carrasco’s Thornhill Hyundai provides, and it’s not hard to imagine many other Greg Carrascos showing up in the next five years. By that time, car dealerships may be less about sales and act more as showrooms with product specialists and fixed pricing.
The dealership model is changing before our eyes, and consumers are more educated than ever. Now, it’s time for the auto dealerships to catch up, and looking into what works at Thornhill Hyundai sounds like a good start. Change may be slow, but it will get there—Greg Carrasco is just a pioneer ahead of his time.