Done by non-commissioned sales staff using market values instead of list prices, the Stewart and Kelley systems have been in force for years as profit-generating successes.
“The old concept of 1-price based on grosses failed because sales people couldn’t or wouldn’t get off commissions as their chief reimbursement,” says Stewart, owner of Gordon Chevrolet in Garden City, MI, outside Detroit. “Making the change to steady salaries, plus bonuses based on volume, has made all the difference.”
Kelley follows a similar formula at his Buick-Pontiac-GMC store in Fort Wayne, IN, where sales staffers’ salaries are supplemented by monthly volume bonuses paid incrementally for eight or fewer sales, then eight to 16 sales, and so on.
“One-price as we do it results in owner and employee retention,” says Kelley. “Customers – especially women – are satisfied that gone is the hassle of having to negotiate with sales people trying to make an extra buck off higher grosses. That’s why we draw customers from all over Indiana.”
Billboard touts non-commissioned sales staff.
Both Kelley and Stewart have leveraged their flagship stores (that have been on the Ward’s 500 for more than a decade) into centerpieces for groups with other stores in their home states, as well as two Southern states: Georgia for Kelley and Florida for Stewart.
The 1-price concept hasn’t followed into all of their other stores.
“Certainly, not all markets can sustain 1-price selling,” says Stewart. “I found that out early on after I pioneered 1-price-marketing in Detroit in 1987. We got it going here, but when I added Chevy stores in Jacksonville and near Orlando, there was a different mentality that has made it more difficult to sustain.”
Gordon Chevrolet General Manager Susan Ianni, a 20-year employee, does the dealership’s radio commercials, focusing on the sales staff being “non-commissioned” and geared from that perspective to offer unchangeable “lowest prices” for new vehicles.
“We also have a unique 48-hour exchange offer, letting buyers switch their vehicles if they’re dissatisfied for any reason,” she says.
Stewart recently refined his website to reflect all the inventory on hand at his respective stores, which is being expanded to include the Hyundai brand near Birmingham, AL, and a Cadillac franchise at a location soon to be disclosed.
As one of the highest-volume Chevrolet dealers in metro Detroit, together with Stewart Chevrolet in Woodhaven, MI, Stewart joins his Chevy peers in calling Saturn a General Motors Corp. “mistake.”
He concedes Saturn ignited the 1-price trend in the late 1980s, but “in addition to appropriating new models intended for Chevrolet, they caused their dealers to stick to 1-price MSRPs, which simply doesn’t work in a metro market.”
Stewart’s son, Gordie, Jr., runs the family’s Hoover Toyota store near Birmingham, AL. That dealership has grown steadily and is on the Ward’s 500.
Kelley’s group includes 12 stores and recently added its first Ford Motor Co. dealership in Decatur, IN, a town of 15,000, where Kelley also has all the GM franchises except for Cadillac and GMC. The Georgia franchises are Chevrolet in Atlanta and Saturn of Gwinnett.
“Ford is pretty good to work for,” Kelley says in his commodious Buick-Pontiac-GMC flagship store in Fort Wayne.
“We just built a new store for Ford over in Decatur and applied the same system we have in our GM outlets in Evansville and Fort Wayne, IN, and Atlanta – free car washes for owners, liberal upgrade job opportunities for our 800 employees and 1-price market selling.”
An active website is managed by Tom’s 21-year-old son, Jim Kelley II, whose grandfather and founder of the group, Jim Kelley, 86, oversees the Chevrolet store in downtown Fort Wayne.
Compared with Fort Wayne, a city of 350,000, Atlanta is a “metro market challenge” for us, Kelley admits, “with perhaps 100 dealers serving the metro market. But the key dynamics aren’t really that different from Fort Wayne or tiny Decatur: keeping customers satisfied, not hassling them, establishing the Kelley family brand as one that is here to stay and always training and retraining.”
Kelley also runs a special-finance used-car superstore and is building a new Hummer store in Fort Wayne.