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Are You Playing Offense or Defense?

Give your dealership a comfortable lead with a strong value proposition and force competitors to play catch-up

As a lifelong marketer and loyal sports fan, I look forward every year to the Super Bowl--the ultimate in both marketing and sports.

Although last year’s Super Bowl ended up in the record book as the lowest-scoring such game in NFL history, it was still a major televised event. More than 100 million people watched the game while advertisers spent more than $5 million for each 30-second spot—or roughly $175,000 per second.

The Super Bowl is full of such super-sized statistics.

Take food, for instance. Super Bowl Sunday is the second largest day for food consumption in the United States. On that day, Americans can be expected to drink an estimated 325.5 million gallons of beer and devour 1.25 billion chicken wings. That's four wings for every man, woman, and child in the U.S. or enough to encircle the Earth three times, according to the National Chicken Council. In the two weeks leading up the big game, we also spend more than $278 million on potato chips and $198 million on frozen pizza, as estimated by Nielsen. One can only imagine how much is spent on antacids.

Or ticket prices. The cost of a ticket to the first Super Bowl game was just $12; today, you can expect to pay around $2,500 for a non-VIP seat a long distance from the field of play, stuck behind some inebriated guy in a huge foam hat.

Or the game itself. The highest-scoring Super Bowl came in January 1995 when the two teams combined for 75 points. The San Francisco 49es beat the Chargers of San Diego by a score of 49–26, in an impressive display of offensive firepower.

And that’s what I really want to talk about: your dealership’s game plan.

Play to your strength

In retail automotive, no dealership has a unique advantage in new car franchise products, prices or financing. Dealers get the same cars from the manufacturer, pay the same amount to the factory to receive them, and have the same options to finance them for customers, so, no advantage there. Truth be told, dealers share the same resources to evaluate and price their pre-owned inventory, so, no real advantage there either.

In that context, it’s an even playing field. Which begs the question: how do you separate your dealership from the rest? Or put another way, what makes you unique to your customer?

Clearly, offering the lowest price is one strategy. But it may not be your best solution, especially since it can result in lower profit margins for your store and price-driven customers tend to be less loyal.

The good news is negotiating over the lowest price is a game you don’t have to play. Price is not as important as you might think. According to a Consumer Reports national survey, 95 percent of car shoppers rank reliability high when choosing their next vehicle purchase.

Similarly, based on a survey of over 85,000 people, J.D. Powers created a top ten list of reasons why people buy a particular vehicle. The number one reason given for selecting a vehicle is its reliability. Price was not even in the top five.

On defense

I believe value instead of price can distinguish your store. For example, your store might offer attractive value-adds like free oil changes and car washes, a 72-hour exchange program or a lifetime power train warranty.

One of the best opportunities a dealership has to separate itself while ensuring a purchased vehicle’s reliability is through the warranties it offers. But what dealers offer and how aggressive they are in promoting it says a lot about their priorities.

Some dealerships look for the cheapest warranty option on the market and promote it half-heartedly, almost as an after-thought. They know they have to offer some kind of warranty but are not fully committed. Put another way, their strategy is to play defense.

On offense

Other dealerships look for the best warranty programs and use those programs to drive more business. They prefer to play offense.

Instead of looking solely at price, these dealers choose to work with a quality warranty program that offers training and marketing support. They promote their warranty program at every touch point in the store and in their advertising. They’re reaching out to the value-focused customer, because value breeds loyalty, and they know a loyal customer is 17 times more likely to buy from them again.

Play to win

Reliability is all about providing peace of mind for your customers, which is what the best warranties offer.

Ask yourself, are you playing offense by using high-quality warranties as a way to provide value and bring in new business and higher gross? Or are you playing defense and see warranties only as an effort to not lose business?

Put another way, would you rather be chased or chase, lead or follow? Playing to win is different than trying not to lose.

David Adcock is the Executive Vice President of Binary Auto Solutions, a leading provider of customized programs designed to help dealerships sell more vehicles. He can be reached at David.Adcock@Binaryauto.com.

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