It’s every powersports dealer’s worst nightmare — that one competitor in your market that sells every unit at $99 over cost. We’ve all dealt with these guys undercutting prices, and matching or beating their prices is simply not sustainable.
So what’s the best way to conquer the so-called price war? What does it mean to be a samurai? It means to devote your dealership utterly to a set of moral principles. To seek a stillness of your mind and to master the way of the sword.
Yes, lowering your prices is an option; that’s easy! Anyone can do that but not without crippling profits. Even in the end, if you win the battle, you’ll still be bruised, beaten and broken when the war is over. Then you have to hit the reset button and reestablish your brand in the marketplace. In order to win the war, you need a strategic battle plan, and it starts with VALUE and then buy-in from your troops. If some are unwilling to make that change, discharge them. These changes are necessary in order to support the strategy moving forward.
You need to position your dealership as a clearer choice in the eyes of the potential customer. Create a checklist with your staff titled “The Way of the Sword.”
As a group, list out five value-based statements that differentiate your dealership from the competitor. Your staff must live and die by these statements; it is their moral code for as long as they are clocked in. A competitor can’t copy your culture, your people, or your code. You must leverage these advantages.
Come up with a way to label the competitor as a less desirable place to do business without outright slamming them. For example, if your customer values doing business locally, refer to the competitor as “that out of town dealer” or “that out of state dealer.” Your true but unflattering label should bring to surface information or traits about the competition that your customer might find undesirable.
Second, stop selling and start educating! You need to invest in your army with proper training; weekly boot camps are essential. The OEMs offer a lot of no-cost training; use it! Your customers will pay the premium with a salesperson that can actually educate them on the products they're buying.
Understanding your competitor’s sales process is important, and finding ways to simplify yours to make it hassle-free is key. This will allow your customers to sell the process for you and generate positive word-of-mouth.
Last, promote the new you! Let the customers know all about your new value-based approach.
You won’t always win with a higher price. Sometimes customers really do want the lowest price. That’s okay. If you offer more than a low price, then you want customers who value more than a low price. Treat your dealership like swordplay. Grip it; hold it tightly, then make your move.
Nate Stickney is an industry veteran and managing partner with the Sky Powersports Group based in Orlando, Florida. He's well known within the industry as an innovative operator and expert team builder. Nate has a unique vision on how dealerships should be managed, motivated and maintained. He's spent the last 16 years in American and metric dealerships working hands-on in all departments from sales, F&I, parts, service and marketing.
Follow him on twitter @NateStickney.