Consumers are drowning with information online in their car buying journey. Learn what’s distracting your visitors, how to engage them and proven tactics to keep their attention. Download Storyboard
Yesterday Forbes published an amazing piece by Adam Hartung titled, "Core" as Killer - Demise of RIM, Yahoo, Dell.
The article begins with “Understand your core strength, and protect it. Sounds like the key to success, and a simple motto. It’s the mantra of many a management guru.” And then Hartung goes on to clearly demonstrate how this advice ill-served the three companies spotlighted here.
These three business giants let historical momentum blind them to the “changes in technologies, user preferences, competition and markets.” Hartung ends the article with, “Success actually requires overcoming internal momentum, built on the historical success formula, by putting resources into new solutions that fulfill emerging needs. Being agile, flexible and actually able to pivot into new markets creates success. Forget the past, your core strength and the momentum it generates. Fixating there can kill you.”
How does this apply to Retail Automotive? Let’s look at the core strengths of many dealerships; controlling the flow of information as well as controlling the customer, following a time-tested sales process without fail, maximizing profit on every deal, and being the best negotiators in the world. This constitutes the momentum that many dealerships are successfully fighting today. These ‘New School’ dealerships are nimbly adapting to much greater transparency in the market, living with empowered buyers, developing new sales processes, and increasing profits by increasing Market Share – increasing the number of customers they serve – rather than trying to squeeze every dime from every deal.
Price and Reputation are easy to discern today, as they never were before. 'Old School' dealers that try to obscure their pricing strategy in today's transparent marketplace will be found out and their reputation will suffer. The widely reported story of $1495 Door Edge Guards is just such an example.
The Tipping Point will come for the 'Old School' dealers when the number of customers they draw becomes so reduced that they get more and more desperate in their tactics, thus destroying their reputations. The ZMOT (if you must) is driven by Price and Reputation more today than ever before - not Inflatable Gorillas and carpet bombing newspaper ads in your market. The winners will be defined by those who best embrace today's transparent market and the losers by those who desperately try to hide from it.
‘Old School’ dealers are fighting this customer empowerment tooth-and-nail, but dealers across the country are discovering that they can use the greater flow of information and knowledge to their advantage. You can walk into almost any dealer in North America and have a pretty good idea of what kind of store you are in; ‘Old School’ stores will be engaged in lengthy, adversarial negotiations while ‘New School’ dealers will be working hard to prove the value of their vehicles, reducing negotiation thru documentation; leveraging the power of information to justify their asking prices. These ‘New School’ dealers are winning by working with their customers rather than against them.