Value-add for the purpose of value-add is probably a pretty bad idea. "Me-too-ism" related to this topic is usually a losing proposition. Frankly, as we always say at the Rich Dealers Institute -- "same is lame."
However, there are two critical elements that need to be considered in this discussion in order to make a truly effective strategic decision.
1. Most people have a "something for nothing" self delusion. This is, in fact, the driving element behind all successful retail marketing, automotive or otherwise. This is what causes people to buy lottery tickets, play the slots in vegas, buy the value meal at the drive-through (tip of the hat to the fry pic). Same reason "The Four Hour Work Week" has been tearing up the bestseller charts for 3 years. Everyone believes, deep down, that they can somehow can something for damn near nothing. The insatiable desire to "score" that something drives people to make emotional buying decisions (it's the feeling you get when you tell yourself, "just one more pull on the one-armed bandit...this is my time to win!"). Incidentally, this is also the magic behind cash for clunkers.
People are expecting that something. As marketers, we really need to deliver on that. And if we can deliver it in a unique way, that they aren't hearing from our competitors, we have an opportunity to become the first choice. The obvious choice. That's the key.
The sports illustrated football phone comes to mind. The cracker jack toy. The free prize in a box of cereal. The wooden ship from Napoleon Dynamite ("I want that!"). Free oil changes for life. All variations on the same theme -- all effective.
Truly, no small value-add is enough to shift the value proposition completely -- but combined into a package, with the right message, it is enough to separate a dealership from everyone else and create an apples to oranges comparison -- ultimately, making it harder to compare by price alone. This leads me to the second critical element to be considered:
2. If we can provide no way for a customer to differentiate between us and our competitors, price will be the final dictator of decision. Hate to break it to to, but being chosen because you have the best price isn't the greatest thing that can happen. The better thing that could happen is being chosen because the value proposition is better, even though your price is more -- leaving you with more profit.
Ultimately, value-added tsatskes are only part of the equation. The ultimate value-add you can promote is the ability to solve the customer's problems. Most all of your potential buyers have a problem that's keeping them away (upside down, still making payments, credit issues, no money for down, over mileage on lease, etc, etc). If you can shift the conversation away from price, even away from free tires and oil changes, and move toward becoming a problem solver rather than a product pusher, you can actually begin accelerating a stalled-out market and creating your own pool of buyers.
However, there are two critical elements that need to be considered in this discussion in order to make a truly effective strategic decision.
1. Most people have a "something for nothing" self delusion. This is, in fact, the driving element behind all successful retail marketing, automotive or otherwise. This is what causes people to buy lottery tickets, play the slots in vegas, buy the value meal at the drive-through (tip of the hat to the fry pic). Same reason "The Four Hour Work Week" has been tearing up the bestseller charts for 3 years. Everyone believes, deep down, that they can somehow can something for damn near nothing. The insatiable desire to "score" that something drives people to make emotional buying decisions (it's the feeling you get when you tell yourself, "just one more pull on the one-armed bandit...this is my time to win!"). Incidentally, this is also the magic behind cash for clunkers.
People are expecting that something. As marketers, we really need to deliver on that. And if we can deliver it in a unique way, that they aren't hearing from our competitors, we have an opportunity to become the first choice. The obvious choice. That's the key.
The sports illustrated football phone comes to mind. The cracker jack toy. The free prize in a box of cereal. The wooden ship from Napoleon Dynamite ("I want that!"). Free oil changes for life. All variations on the same theme -- all effective.
Truly, no small value-add is enough to shift the value proposition completely -- but combined into a package, with the right message, it is enough to separate a dealership from everyone else and create an apples to oranges comparison -- ultimately, making it harder to compare by price alone. This leads me to the second critical element to be considered:
2. If we can provide no way for a customer to differentiate between us and our competitors, price will be the final dictator of decision. Hate to break it to to, but being chosen because you have the best price isn't the greatest thing that can happen. The better thing that could happen is being chosen because the value proposition is better, even though your price is more -- leaving you with more profit.
Ultimately, value-added tsatskes are only part of the equation. The ultimate value-add you can promote is the ability to solve the customer's problems. Most all of your potential buyers have a problem that's keeping them away (upside down, still making payments, credit issues, no money for down, over mileage on lease, etc, etc). If you can shift the conversation away from price, even away from free tires and oil changes, and move toward becoming a problem solver rather than a product pusher, you can actually begin accelerating a stalled-out market and creating your own pool of buyers.
