Digital Dealer
Playing The Losing Game Of Price
By Todd Smith
All vehicles must go! Overstocked! Clearance event! Free financing for six months! Giant year end sale! All these statements can be summed up with one word: Commoditized. Our industry has become so price-driven that we have trained our consumers to shop us for our best price like Pavlov's dogs. Unfortunately, the Internet didn't decrease the amount of "price shoppers" in our industry. In fact, it magnified it. The good news is it is not all our fault. The media has hyped the web to no end promising better deals, lower transactional costs, etc. Some of this is true. The web does have some very real and powerful applications that we can utilize for our dealerships. They forgot one simple item, however. Once you hit the bottom on your price, you have only one place to go, out of business. Maybe the dot com businesses with all their fancy techno whizzes should have peeked around the corner before they found themselves stuck in oncoming traffic. To prevent dealerships from landing in the same position many other businesses have recently, I suggest you read the next paragraph with an open mind.
Envision for a moment a place where customers were not ever called customers. They would be called guests and employees would be called driving enthusiasts. The guests would pay a premium to come to your dealership, because you would not only sell them a vehicle or service, but you would provide them an entire driving and vehicle ownership experience right down to the last detail. Your new dealership would be centered around guest entertainment. They would leave energized and not only willing to return, but recommend to all their friends and relatives that they, too, should go and visit this place and purchase, shop or become more educated about their vehicle. What I am describing here is the Disney World of automotive dealerships. People don't go to Disney for an affordable vacation. They go for the experience. I feel there can be some valuable lessons learned from Disney and we will discuss them further in the article.
I often meet dealers who are so focused on the Internet price they forget that they have the opportunity to capture the customers' imaginations and invigorate them with the ownership experience of their vehicles. Growing up in the car business, I remember watching the excitement of customers leaving the store in their new vehicles. That new car smell is a powerful aphrodisiac that needs to come alive again, even though people are trying to use the web more and more for their purchase decision. BMW's Performance Center Delivery Program in Spartanburg, SC is an incredible step forward in creating an experience transaction instead of just a vehicle transaction.
Let us now look closer at Disney World and see what we can learn so we can apply it to your dealership. First, your directly competing dealerships aren't your only competitors. Your dealership competes with every other company your potential customer does business with, whether it is L.L. Bean, FedEx etc. Raise your customer service to the "knock your socks off" level to get guests talking about how easy and fun it is to do business with you. Second, little things will have a tremendous effect on your businesses success. These could include how we introduce ourselves to our guests, how we present the vehicle, how we deliver the vehicle etc. Third, every time a customer or prospect comes in contact with your dealership, you have the opportunity to create value. Do you feel your dealership is creating value for your customers at every step? Fourth, look to your employees on how to improve the business. Management has some answers, but by leveraging the power of the entire dealership's staff, mistakes can be caught and corrected faster and service levels can be improved immediately.
These are just a few items to start to think about as the Internet gains more and more influence in how we do business. Now is the time to start creating the "Buying Experience" for your guests. Build relational value with your guests by offering them services that are unique to your store. Loaner cars, Saturday service, kid playgrounds, anything that can extend to your customers that adds a point to build a relationship. Look at other industries and see what you can apply to work within your own dealership. Walk through your dealership and pretend you are in Disney World. Envision your store as an incredible place to do business. Walt Disney flew over Orlando, Florida, a year before Disney World was created, and called out to those in the plane describing exactly how it was going to look and where attractions would be placed–all from a vision. You need to put these same practices to work now to ensure you don't wind up competing on price alone.
Todd Smith is C.E.O. of Lear Media Inc. a company focused on implementing real solutions for dealership that want to embrace the web. Todd has been a top consultant to many of the OEM's, large dealership groups as well as individual dealership nationwide. tsmith@dealeronline.com.
