When questions of strategy arise, I try to refer back to Sun Tzu, a Chinese General who wrote “The Art of War†some 2,500 years ago. “The Art of War’ has been studied by leaders as diverse as Napoleon, MacArthur and Bill Belichick. There have been numerous translations, but everyone in business should own at least one copy.
“The Art of War†teaches that position is supremely important. The relative position of forces will determine the best strategy to pursue. It also teaches that as conditions change, so must strategy. In war or football or business, this seems obvious.
Let’s look at Car Sales in the time before the Internet. For decades we were able to fight the same battle over and over, because it was literally the same battle. Each side fought from the same positions and their weapons (their information) didn’t change. So we were able to hone our battle plan as we fought the same battle over and over. As long as the positions remained the same, and conditions didn’t change, we knew exactly what we were facing.
If you feel that the positions and conditions are the same today as they were 20 years ago, by all means continue to fight the same fight – using the same strategy you’ve been using for decades. If you think, as I do, that we’re facing a different battle, the logical conclusion is to develop a new strategy.
If you really embrace and leverage the Internet you have the ability to adjust your position so that it is very hard to attack. Your position is your price. Sun Tzu said, “…supreme excellence consists in breaking the enemy's resistance without conflict.†When you price your cars to market and use the information available online to prove and defend that price, you can all but eliminate the conflict of negotiation. I believe this change is so fundamental that even the enemy has changed; for years the conflict was with the customer – today the enemy is the dealer down the street.
The importance of this is huge. With every customer – sold and unsold – having the ability to review your store online, unhappy customers today can impact your traffic for months to come. Does any customer emerge from an hours-long negotiation really happy?
My advice (for what it’s worth) is to take a hard look at the current conditions and ask if yesterday’s strategy is really best for today’s battle. Or maybe is it best to avoid the battle completely?
