One Dealer's Success Story: Lose the Commission, Drop the Sleazy Salespeople

In terms of unpleasantness, buying a new vehicle often ranks up there with visiting a passive-aggressive dentist, or perhaps meeting with your child’s teacher to discuss his or her “performance.”

Overzealous salespeople who stereotype customers, high-pressure them into buying the vehicle and package the seller wants, and generally lack knowledge about their own product likely sour more people on a brand than recalls and scandals. If only there was an easy way to avoid turning customers away while boosting sales.

It turns out, the solution could be very simple.

In the wintry wastes north of Lake Ontario, the general manager of one Toronto-area Hyundai dealership turned his operation around, only because he grew sick of the sales tactics used by dealers.

According to Autofocus, Greg Carrasco of Thornhill Hyundai found the best of both worlds. More cars moving off the lot, and more customers leaving the dealer happy, rather than heading to the competitor across the street. At its core, the plan kicked the commission sales model to the curb.

After taking over the dealership, the 25-year dealership industry veteran was eager to try something different. Well, “different” if you’re in the biz, less so in the outside world. In February, the he stripped staff to the core, then launched a non-commission sales model. Carrasco brought salespeople in from outside the industry, counting on customers to know what they want.

“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 told Autofocus.

“[Our staff training is only] five percent about cars, and the other 95 percent is centered around people,” he added. “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.”

Thanks to the Internet, more customers than ever walk into dealers knowing the model, packages and pricing they’re after. Carrasco figured, why not just give them what they want? In his view, the Glengarry Glen Ross-style salesmanship of yesteryear alienates customers.

Instead of earning commission, the salespeople at Thornhill Hyundai earn bonuses based on customer satisfaction. While assisting with a sale still nets them a bonus on top of their salary, the real cash comes when a customer gives the dealer a minimum 96 percent Customer Satisfaction Index (CSI) score. The result of this new approach? Sales in 2016 nearly doubled to 1,700 vehicles, while next year’s forecast is 2,500.

As word of its no-haggle, no-commission approach spread on social media, so did the dealer’s reputation. According to Carrasco, a full 55 percent of Thornhill Hyundai’s customers now purchase their car online, never entering the dealership until it’s time to sign off and pick up the vehicle. Many come in from outlying communities, passing other Hyundai dealers on the way.

The no-haggle, online-heavy approach could pay dividends for other dealers, especially with the growing crop of car-buying Millennials claiming they hate the dealership sales experience. Already, brands such as Genesis have eschewed the dealer-centric ways of the past to lure in buyers.

[Hyundai Motor America]