Hot Dogs Are Not A Value Proposition

Market Differentiating Strategies: Hot Dogs Are Not A Value Proposition

"Why should I do business with you? The store down the road is cheaper," asks a customer. "Well, er … ah … gee," you stammer, "We do all kinds of special things for our customers." The customer asks, "Like what?" "We have, ah … (oh yes, it comes to you) … free hot dogs and sodas every Saturday for our customers." You smile as if you’ve just hit one out of Fenway. The customer chuckles and walks out of the store.

Hot Dogs, soda and free coffee are not in and of themselves a reason for customers to do business with you. Neither are pictures with Santa, free balloon day or get-your-picture-taken-with-a-Hooters-girl day. Many of these things have become common in the marketplace and are of dubious value to the customer experience. Customers are changing and dealerships need to change as well. People say, "sell the sizzle not the steak." Well you have to start with a decent piece of meat. Then the sizzle often takes care of itself.

If you want to compete on something other than price, you have to do business well in the first place. For many dealerships this fact alone is enough to have them collapse like a folding chair. Don’t let this happen to you. Competing on aspects other than price isn’t easy, but the effort can be well worth it with higher margins and customer retention.

What you can do is create and perpetuate your dealership brand.

Consultant Alan Weiss states that a brand is a consistent communicator of quality. So your dealership brand is who you are and what you do. We typically think about "branding" as products, but new thinking shows it can also be the service side as well. Your service is your product. So what are you communicating and how can you set yourself apart from the crowd?

Make Your Dealership the Difference. Here are some guiding principles you can incorporate either separately or on an inter-related basis so that price is not the primary differentiator in a customer’s buying decision.

Develop an external brand tagline that can consistently communicate your quality:

  • Laidlaw’s — Family Owned And Operated
  • Milwaukee Harley-Davidson — Where Customer Service Matters
  • Monterey H-D — A Different Kind Of Dealership

In addition to your external branding, create internal mantras to create quality experiences for your customers. Here’s one every dealer should incorporate:

Be Like Cheers! – Where Everyone Knows Your Name. No, don’t start serving drinks; rather you should know your customers and potential customers. Make a real effort in the store to get great at this. If you were to become excellent at this one aspect of business, chances are you would see a dramatic improvement in your performance. The problem is that many dealerships and salespeople don’t do this well. Here’s a comment we received from one rider: "Unfortunately, in my experience there is little correlation in paying more and getting better service. My salesperson forgot my name and phone number the moment I signed on the dotted line. I think you may get the Royal Crown treatment if you’re a consistent repeat buyer that trades up every few years and gets all service done by dealers. Sure they take care of the cash cow. But I don’t think many buyers fit that category. So this dealer made his buck on me, but he’s not likely to get another dime."

Forget the hot dogs and balloons, customers will appreciate it more if you remember their names. Come up with ways of remembering people, like customer photo boards or albums. Teach methods of communicating names to others in the store, "Steve, you remember Mark, he’s the proud owner of that cool V-Rod." Finally teach methods of getting out of awkward situations, "I’m sorry I must be having a senior moment, I’ve forgotten your name." Not old enough for a senior moment? Okay, I’m sorry, my hard drive must have crashed, and I’ve forgotten your name."

There is no sweeter sound to a customer than hearing their own name. Think this is trivial? Think this is a given in most stores? You’d be absolutely incorrect. Ignore this important market differentiator at your commission’s peril. Numerous times while speaking with customers they’ve said to me, "You know why I do business here? They call me by name and treat me like a friend."

Listen to your customers, they’ll tell you how to be successful. This is just one strategy for success. How do you know which strategy you should employ? Ask your customers.

Many years ago, Federal Express purchased a new fleet of jets to improve their service. Their ad agency had created a whole campaign based around these new planes. During a focus group where these ads were being shown one participant replied to the researcher, "Look I don’t care how you do it. All I care is that when I have something to ship, you absolutely positively get it there overnight" — instantly a different ad campaign and branding strategy was born. Talk to your customers about your dealership. They’ll tell you what strategy you should adopt.

FedEx It – When it absolutely positively has to get done overnight. Sticking with the ubiquitous FedEx brand, you need to process perfection just like these major players because customers expect it. They expect you to call back when you promised; they expect the part to come in when you said it would; and they expect their bike will be ready on time. In far too many dealerships we take a victory lap like we just won Daytona when we accomplish these tasks. Guess what? Customers don’t think that’s extraordinary, because they are comparing you to the likes of FedEx.

Create processes in your dealership to make sure you perform as flawlessly as possible. Use check lists, job aides, have in-store problem-solving sessions. Do whatever you have to do to perform as expected.

The Trebek Effect: Know your stuff! People see Alex Trebek (you know, the Jeopardy host) as a really, really, smart guy. Yes, I know, he’s given the answers on a card, but that’s not the perception. He’s seen as a guy who knows a lot of stuff. Be like Alex: have all the answers. Your customers want to do business with those who know what they are talking about. So be a product expert. Learn something about what you sell every day. Talk to techs, read the catalog, talk to customers who have owned the item, go online and read product reviews. Then internalize the most common questions, so you can answer off the cuff. How much is it? Does it come in other colors? How much does it weigh? How fast does it go? Hey even the great home improvement giant Lowe’s is in on this one. Their tag line: "You’ve got questions. We’ve got answers."

Amazon Add-On : If you like that, you’ll like this! Jeff Bezos, Amazon.com’s founder, is one smart guy. First he started Amazon.com primarily selling books. Why? Well he figured smart people read books, smart people have computers and smart people will adopt new ideas … like buying stuff on Amazon. Now that’s a strategy that worked.

He and his incredibly innovative staff figured out that when readers finish a book guess what they like to do? You got it … read another book. So they are always looking for suggestions. Your suggestions as a "like-minded" person hold a lot of weight.

There is a lot of evidence to support this point. Years ago I read a piece of research done by the Gap. It stated that they found out that customers who purchased multiple items were much more satisfied than those who purchase just one item — i.e. I’m happier with a whole new outfit than just a new pair of pants. For someone who has spent his entire working life as a commissioned salesperson this is news I can use!

James Bond: Nobody does it better. In the 1977 film Carly Simon sings the theme song, Nobody Does It Better. The song has since been used in various forms and ways to support the James Bond "brand." Take a tip from this classic Bond theme song and get great at something. I don’t believe in discounting. My whole perspective is that we want to provide such overwhelming value that price isn’t an issue.

Here’s an example: I’m an amateur guitarist. There is a luthier here in Milwaukee who is one of the best in the country. When I need repairs or servicing on my 1988 Gibson Les Paul Custom, I go to him. Not because he’s cheap (I pay a huge premium) or because he’s fast (I often have to wait). So why do I go to him? He treats me like royalty and my guitar like a crown jewel. I learn something every time we interact. He makes me feel like I’m on the "inside" in the music scene. And, oh yeah, he does great work.

Be so good that no one does it better. Now it’s important to be realistic. If the bike books for $3,000, and you’re trying to sell it for $6,000 all bets are off. But if you are priced fairly in your market, he who offers the strongest value proposition wins. So be like L’Oreal: Expensive, but worth it.

Okay, so there you have it. Use these ideas individually, mix them or better yet, come up with your own. If you have a clearly identified and executed value-proposition, you and your customers will understand why it’s better to do business with you rather than someone else down the road — even if they are cheaper. So the next time someone asks you why they should do business with you versus the cheaper deal down the road you’ll have more to offer than just hot dogs.

For more on Peak Prospect Attraction go to
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