WINNING THE PRICE WARS

As most of you know, I have over 150 One Price Selling dealer clients. In talking to dealers who are interested in this selling process, I always hear, “My market is different. We have a number of dealers who just give cars away. How can I compete?” For starters, most markets aren’t that different - they are highly price competitive - therefore, you don’t want to compete solely on price. You want to create a differentiated sales process that allows you to get your fair share
of business at a higher gross than your competitors. One of my mantras is, “When you add value to a transaction you can charge more!”  Below are 5 great value differentiators which are the keys to obtaining higher grosses than your lower priced competitors:

1. Upfront competitive pricing – The vast majority of your customers do extensive research before coming to your store.They recognize a competitive price (usually within $100-$300 of a guide like
   True Car/Edmunds.)  Once they realize the first price they see coincides with their research, they are no longer pre-disposed to negotiating.
2. Empowered Sales Consultants – Customers prefer dealing with one person throughout the entire transaction; look at their faces when your sales person leaves to go to the “desk.”  Hire sales people who can build value to a
   pre-determined price point.  If you’re going to allow negotiations, give your sales people a narrow range within which they can negotiate.  However, when they do negotiate their compensation should drop significantly.
3. A Time Efficient Sales Cycle – Most customers will trade money to save time.  Eliminate desk trips, use technology and clerical support to speed up the sales transaction.
4. Money-back Guarantee – Virtually all of my clients offer a “no questions asked”,  3-7 day money back guarantee on both new and used vehicles. Most customers will pay more for peace of mind - give it to
   them!
5. Knowledgeable Sales Staff – If you switch from being a “deal making” store to a superior training organization you will attract a better educated, gender-balanced, younger sales force. These types of people expect to be continuously trained so they can improve their personal skills. Commit to training so your sales staff can explain financing options and knows more than the customer about your products and your competitors’ products.

Remember, when your sales model is very similar to your primary competitors, you are going to primarily compete on price – not a good gross strategy. I run free webinars for dealers that more thoroughly explains
the above “value drivers”.  If you’re interested, send me an email (mrikess@earthlink.net)
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