The son of Hans Pfaff, a Canadian retail and motorsports icon, Chris Pfaff is a futurist and entrepreneur intent on changing how people buy vehicles in today’s highly-competitive luxury car marketplace. His plan is to simplify the process, offer one price, eliminate negotiation and deliver a new vehicle within three hours of purchasing. It’s a lofty goal and it’s working at Pfaff Auto across Canada. We sat down with Chris recently to learn more about who he is on a personal level, what motivates him today and where the automotive retail industry needs to go for future success.
VC: What does it mean to you to have the Pfaff last name and carry on the entrepreneurial legacies of your father? No pressure I guess.
Chris: (Laughs) I think it was just natural, I’ve been in it my whole life. I was that 6 year old kid looking at my dad, he had a Porsche franchise and would bring those cars home and so it was very exciting to me. I’ve been a car guy through-and through my whole life, so I never really had to think about, it was just a passion that came from being excited by being around it.
VC: What made you decide to get involved with the business and add your name to the family ledger? Did you have a choice or was it an expectation?
Chris: I know I’ve heard this question asked of Lewis Hamilton and Jenson Button by Ron Dennis where he asked them, what was that key point that took you to where you want and they both had very interesting answers. My answer might be that in Grade 3, for some reason, my teacher said, “Your dad’s a Volkswagen dealer right?” I said yes and she said, “I am looking for a Volkswagen Beetle.” I said I would talk to my dad and get all the stuff, so I brought the brochures and then we met and she was in between a Ford Mustang and a Volkswagen Beetle. She bought the Beetle. And I think she bought the Beetle because I was looking at her with big blue eyes and saying will you buy this car, and so I love that part of it. That was my first deal. Going to the track with my father and all that stuff as well, it was just so natural for me. I couldn’t not get involved.
VC: As a young man growing up surrounded by your father, cars, tech, sales staff and most likely being privy to many insightful discussions about the challenges associated with creating and strengthening a brand, what are some of the more valuable lessons you learned through these experiences?
Chris: That’s a good question. You know, people ask me, did I sit here when we started and say, I want to build a great automotive brand. I didn’t have that clear intent, we just wanted to get better at how we did business. We wanted to be the best and we wanted to give a better experience to customers and we wanted to highlight the emotional appeal of the cars that we sold. Somehow within that we started getting involved in motorsports and raced against our competing dealers and we had a little success with it. We started to grow the automotive business and it helps if your name has only five letters. When my dad was selling cars and managing a dealership at Yonge and St. Clair and he moved to Newmarket and bought the store, people said Hans, we love dealing with you, but that is the middle of nowhere. He said, never mind, we’ll pick up your car and deliver it for service and he would take cars to the city to show them, so they never really had to come to the dealership.
VC: Who are you listening to and watching with interest these days? Does anyone stand out for you?
Chris: Industry-wise, I look up to the Penske organization in the US, follow Lithia Motors and some of the big publicly traded companies and what their strategies are. We are nowhere near the size of those companies, but that’s an advantage, because we can be a lot more nimble than they can I think. That’s one and two, I look at the new retail models like Amazon, Apple and I look at how they do business and how that appeals to consumers and how that could resonate with automotive consumers as we go forward.
VC: Do you have a few favourite vehicles that have inspired you over the years?
Chris: Porsche for me would be the biggest as they are a significant part of our business. The Porsche 911, again I grew up in one as a kid and so that car has always been a part of me. I just drove a turbo for the last few months and am driving the new 911 now, so that’s definitely a big one for me. But I am a car nut, so McLaren’s, it’s been great to be involved with that. The Audi’s, I still have an S5 and an RS4 because of the 8-cylinder engine, nothing sounds like that or the Porsche GT3 RS. As for classics, I own a 1986 black Porsche 911 Coupe. I first ordered that car new when I was working for Mercedes-Benz, sold it and bought it back three years ago from my neighbour at the cottage.
VC: You are a Canadian Motorsport Hall of Fame inductee and you have a Motorsports division in your company. Why is important to maintain this connection to racing in a world that sometimes seems less interested in driving and more interested in just arriving?
Chris: I think motorsports in this new world maybe becomes even more important, as a recreation and as an appreciation of cars. I think that as we deal with intense urban areas with stop and go traffic and we deal with new types of vehicles, electric vehicles and others that, perhaps, don’t have the same passion as conventional cars, that track events and motorsports becomes even more important for people. We are seeing so much focus from the manufacturers in having motorsports divisions; Porsche has been doing it for a long time, but McLaren is also doing it, BMW, Mercedes Benz, Audi all really emphasize it with their dealers and so it very important. It is better for the relationship we have with manufacturers, it is great for our employees to boost their morale, getting them excited so they can rally around something. It’s good on so many levels. If we are a winning racing team, I think it builds credibility for the dealership.
VC: Does the coming shift towards electric-powered vehicles enhance or detract from the fun-to-drive DNA?
Chris: I don’t know, I’m torn on the issue. I am interested to drive the new Porsche Taycan on the track and on the street. Some of the cars I have driven to date, the electric cars, haven’t done it for me. I get it, I get the reason and the rationale, there is something neat about them in a way, the silence and stuff, it’s cool. But I would argue you’re not a pure car guy if you can like an electric car. It’s not emotional. Maybe once my kids start driving and they don’t know anything other than electric vehicles, maybe they are going to find it passionate.
VC: As someone with a storied history in automotive sales, was there an ah-ha! moment that made you decide to change the way people purchase vehicles?
Chris: I went down and experienced upfront pricing, negotiation-free car buying in Minnesota with a group that has been doing it for 20 years and I was completely blown away. I’ve been to a few other companies along the way and said, I’d like to work here myself, it seems like fun. I would say once I saw that and started looking at retail trends, the way consumers want to do business, the transparency of information, I knew as soon as I got back from the trip we needed to do business this way. We were there in May 2018 and it took us a month or 6 weeks of talking about it when we got back and we said guys we’re doing this. It’s a big change, it’s risky, but I think the risk is bigger not doing anything. Consumers keep telling us in all kinds of research, including our own, they hate negotiating, they hate the time it takes to purchase a car, those are two of the biggest pain points. Time is the big one, they just want to get it done. If you are a great negotiator, are you going to end up thousands of dollars better than the next person? We look at all the dealerships and we see what the profits are and it is typically a few hundred dollars on an Audi A4. Why are we wasting everyone’s time? For a couple of hundred bucks, it doesn’t make sense.
VC: How has the response been by your sales team?
Chris: I laugh at myself for not having realized this better. So, we have a lot of new salespeople come into the business, great personality, they know their product and yet they struggle with selling cars. I would think, you’re a natural. Some caught on, some didn’t make it and they left, but what we are finding now is we are taking people, they are in our system for 2 months and they are selling 20-25 cars because they don’t have to negotiate. They hated it, they weren’t good at it, and it would take them quite awhile to learn how to negotiate. Now that it isn’t part of the process, they are taking off like crazy. Why I laugh at myself is I honestly didn’t realize these people were struggling, but it’s been an amazing change. The top salespeople have taken to it quickly, the middle ones are still struggling a little with the change.
VC: How does the Pfaff Future Retail model revolutionize things beyond not having to negotiate to buy a vehicle?
Chris: Aside from just taking away negotiation, we’re trying to take it from a three hour process to maybe an hour. The ultimate vision is you could pick up a car that’s in stock within three hours of buying it, rather than waiting a week to get your car. There are no fees, the price is the price and you can return the car within three days if you’re not happy and get your money back, new or used. We try to reduce the risk to the consumer that they haven’t made the right decision. The trade value is transparent and if we give you our best number on the trade and you decide not to buy a car from us, we will still honour that number.
VC: What are some of the challenges you face in bringing this to market?
Chris: There are two main things. One is, I know the concept is good, but how well you execute on it is critical. We’ve centralized inventory at the same time so new and used vehicle pricing is now centralized and not at the dealership level. It’s very collaborative with the dealer, of course. Second is sustaining it. We found that some stores took off out of the gate, then six to eight weeks later it’s not the same situation. What we found is, if you’re not following the rigid process of explaining it to the customer when they walk in, customers are used to having to negotiate. So we right away ask them, have they ever been to a Pfaff store, this is how we do business today and tell them right away up front so they know. A lot of customers still don’t believe us and I don’t blame them. We’ve had people walk out to the lot, turn around and say, I thought you were going to chase me. They ask for floor mats or no deal, we say I’m sorry, this is our best price and they say we have a deal because you didn’t budge one penny from what you said.
VC: Do you enjoy pushing the envelope in an industry that is typically slow to change?
Chris: Do I enjoy it? I think it is necessary and I am glad we are doing it earlier on than most. Everyone asks me where we are at with this and I say I regret we didn’t do it sooner. There is a BMW store in Denver, Colorado that has been doing this successfully since 1991 and they are a sizable store selling 1,500 cars a year.
VC: Without giving away company secrets, where do you see Pfaff Auto in 10 years?
Chris: One thing is we are trying to expand our independent businesses like our leasing company, the body shop is successful, we are expanding that, our rental car business that will take into account subscription services and shared vehicles. So we are looking at other revenue opportunities, not just at the dealership level.
VC: When you are away from the responsibilities of being the President and CEO of Pfaff Auto, what do you do for fun?
Chris: (Laughs) I have young kids, so that is a big focus of mine right now and it’s a pleasure. I’m very active running, that’s my religion in the morning.
VC: Our magazine is all about the adventure of driving. Where are some of your favourite places in Ontario to drive?
Chris: I think my favourite one is driving from Toronto to Ottawa on the northern route through the hills and stuff, I love that area, it’s beautiful. There are some great roads up there, so I’ve done that 4 or 5 times where I had to go to Ottawa and decided I wouldn’t fly and actually drove the backroads on purpose. Even though it was longer, it was fun. I haven’t done it awhile; I need to do it again.
VC: Last question. With all the different brands that you sell, if you had to choose one in which to spend a Sunday afternoon, what would you choose?
Chris: I get asked that question a lot, but I honestly have to answer it depends on my mood. For my top three, I would take the Audi S5 or RS4, I want to hear that engine, I want to shift gears, the Porsche GT3 RS, my 2008 green one and then a McLaren; the Senna or the 720. I could just go on, of course, there are a lot of great cars to chose from at Pfaff.