While re-evaluating and communicating your business’ competitive advantages is key to building a business that is ready for the emerging market, many dealerships are still struggling with today’s challenge: namely, the dual pressures of eliminating aging inventory and making a profit despite consumers’ focus on price.
“People still think there is a better deal available,” says Rod Malone, president of The Sail & Ski Centers, Austin, Texas.
The problem with competing or selling on price, as David Parker of Parker Business Planning explains it, however, is that the price has only one way to go: down. In addition, salespeople with this mindset tend to truncate the selling process and bypass involving the customer’s emotions, Parker explains. The result? Margins take a big hit.
In response to today’s conditions, Sail & Ski has changed its strategy for introducing price points and products to customers. In the past, the dealership presented a price to customers that Malone calls “our best foot forward,” a price that the dealership would tell customers is “the one you will pay and the guy before you and the guy after you.”
“You can’t do that in this environment,” he says. “You have a better chance with doing it with people that like and trust you, but people that like and trust you right now are in the marketplace simply because they are looking to purchase something at a lower price than they think they could normally buy.”
Instead, Sail & Ski starts out by showing customers MSRP. That way, the negotiation starts from a higher price rather than a lower price, Malone explains.
Ultimately, Malone warns not to let the customer get away.
“We are trying to make people understand there are opportunities because of the economic realities right now,” Malone concludes. “There are more incentives and cost savings opportunities than there have ever been before. These are truly opportunities of a lifetime to buy a boat. Interest rates are historically low. Getting loans can be tough, but the cost of obtaining money is low. This truly is a buying opportunity. You have to make people understand that.”