Please, Ladies, No Haggling
No-haggle pricing! It’s kind of the zombie of the auto industry. How, you ask? Well:
- Touching it makes your dealership sick
- It periodically comes back from the dead
- The nerd/geek crowd loves to talk about it
- It doesn’t actually exist
It’s also typically something that’s embraced by losers, whether the “loser” in question is a troubled dealership trying to remake its image after a complete decapitation of the leadership/ownership, a troubled brand trying to differentiate itself ( Scion), or a troubled automaker clutching at straws in the face of overwhelming competition (General Motors, with Saturn). But Lexus, the latest brand to give it a shot, doesn’t know the meaning of the word “loser”. Its lineup is bulletproof, both in terms of durability and customer perception. Its dealers are obscenely profitable and generally immune to the worst of the customer-abuse excesses for which mainline Toyota stores are justifiably famous.
So why jump on a strategy that has never, ever worked for any brand that doesn’t own the majority of its retail outlets? Perhaps the answer has something to do with Ellen Pao.
Ms. Pao, an attorney who became famous for suing her employer following what she felt was discrimination for sexual involvement with a fellow employee, somehow managed to get the job of “interim CEO” at Reddit while she was waiting for her lawsuit to come to an end. (Which it did, with a jury finding in favor of her employer on all counts.) During her brief tenure, she instituted a policy banning salary negotiations for new hires. Her motive was, apparently, attempting to ensure equal pay for women:
“We provide offers at the high end and they are non-negotiable,” Pao said at the PreMoney Conference in San Francisco on Friday.
Part of it is offering employees a fair salary at market rate, but when 500 Startups founder Dave McClure asked if there’s some gender-discrimination motivation behind it, Pao said yes.
“There’s some gender to it,” Pao said. “People won’t get penalized for asking.”
Women are significantly less likely to negotiate for higher salaries than men, research shows, and if they do, people react more negatively than they would to a man. Pao said the idea is to get everyone who comes in a fair salary.
“I haven’t heard any complaints. We’re tracking it to see if candidates really want to negotiate,” Pao said.
This whole idea — that women are “less likely” to negotiate — comes as a giant surprise to your humble author, who spent years watching his first wife beat the hell out of everybody from high-end car dealers to jewelry shops in the Caribbean to street vendors in Chinatown. My current girlfriend just served as the general contractor for our home remodel and, over the past six months, I’ve lost count of the number of times I heard her on the phone ripping the intestines out of some poor tile vendor or shower-glass cutter.
To the contrary, my experience in selling cars for years indicates that it’s men who don’t want to negotiate. Many men, particularly those born before 1980 or so, are hard-wired with the idea that disagreement has the potential to end in fisticuffs and we are anxious to avoid a fight if we don’t need to get in one. I never had a man raise his voice to me over the price of a car and I extended the same courtesy in response, but I certainly had their wives call me a son-of-a-bitch over three hundred bucks.
It also seems slightly odd that Ms. Pao, whose boldness in hooking up with a co-worker and then expecting to be cashed out sixteen million dollars in the aftermath has now led her to demand $2.7 million in exchange for not appealing the verdict in her case, seems to think that other women can’t be arsed to ask for a few grand at the end of a job interview. Perhaps she thinks she is unique among women and it’s her job to guard the weaker members of the tribe.
Ms. Pao, however, is not unique in thinking that “women don’t negotiate”. There are plenty of books on the subject. So whether it is true or not, the idea of negotiation-averse women has plenty of social currency.
Lexus is also very interested in pitching directly to women. The Lexus Difference program, another small-batch idea being tested at a few Lexus dealerships, teaches dealers how to prioritize interaction with women:
With Lexus Difference, associates are now being trained to speak to women first rather than directing their pitch to men, among other techniques. “Women hold 80% of the influence in a purchasing decision,” says Turner. “Whether she’s making the decision or not, she’s definitely going to influence the decision. The man doesn’t really care whom you’re addressing, but women feel left out.”
Decades ago, women who were shopping for cars on their own were often advised to come back with their husbands. I don’t know about you, but I’m kind of looking forward to the day when a salesman says to me, “I know you like this Viper ACR. Why don’t you go home and talk to your wife; same-sex, non-cisgender partner; or otherkin poly triad member about it before we sign the papers?” That way I’ll know that America is completely dead and it’s time to hoist the black flag before starting the food riots in earnest.
If Lexus believes that they’ll sell more cars by becoming the proverbial safe space for women, I’m all in favor of doing it. But I wonder: When some Silicon Valley company decides to take a third chance on Ellen Pao and she in turn decides to celebrate another megabucks job with the purchase of that lovely new Lexus RC-F coupe, will she accept her no-haggle feminine destiny, or will she demand to negotiate?
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I'm not sure it is for losers. Saturn and scion seem to be more hampered by product then dealer experience. The largest Honda dealer in my area Manchester Honda has been no haggle for more then a decade and they seem to grow bigger every year. Lexus is in a good position to test this they have a. Good product mix and good dealers so it would likely be the first real test of fixed pricing. A neighbor of mine used to work at the Honda dealer I mentioned, she noted a large amount of buyers were either in their 20's women or senior citizens it seems to me if these are the groups attracted to no haggle pricing it should work out fine. One more note I like you writing Jack, but this is another one of your articles where you seem to step over the line from insightful free thinker to bitter old divorced white dude.
What a bunch of first-worlder problem nonsense. I've never held a job that a woman could do for any LENGTH of time. Thread is full of female reproductive organs.