Reflections on the Internet

We all like to shop for bargains. We are all sensitive to price comparison. We love to read signs like “Closeout,” “Clearance,” “Super Buy” and “75% off.” The more we buy and sell exclusively on price, the more we risk turning products into commodities.
Most of what you can find in generic form has become a commodity and because the strength of a “name-brand” is forfeited, the items are marketed solely on low-ball pricing. For example, peanut butter, aspirin and toilet tissue can be purchased generically. We know we’re substituting top-notch quality for lesser quality but cheaper price … it’s a trade off we’re willing to make.
Allow a switch in thought for a moment.
We can all agree that the Internet is a fabulous invention. Because of the microchip, made out of silicon … grains of sand, our world and the world of commerce have become radically transformed. Like the impact from Guttenberg’s printing press, information can now be disseminated in rapid form, categorized, stored and referred to in an instant. That is a big deal. Underestimate the Internet revolution at your own peril.
Many boat dealers have become excited about advertising their products and dealership on the Internet and reaching customers and markets heretofore thought inaccessible. Imagine putting all your boat inventory on your Web site and finding the right search engines so it can be found. Imagine not being limited by space or distance, or bricks and mortar.
Is the Internet really your best friend in business? Will the Internet help pad your bottom line?
Tim Fulbright who owns Sail Place Inc. in Waukegan, Ill., also owns a 33-foot Bayliner. He knows he can put it on the net and supply a photo, which will make it look “showroom” ready. He also knows he can supply all the specs. The problem Tim found was that his Bayliner was one of 140 listed in the same category on the same page. He also found the net will find him an almost unlimited supply of similar boats offered for sale from everywhere.
What was most eye-opening to Tim, was that customers who called him did so largely with price in mind. Price is the only practical way his Internet prospects could compare and shop. Because someone in cyberspace will always be offering low-ball pricing (ignoring qualitative differences), Tim has found the “net” effect of the Internet is that it is suppressing boat prices, eroding margins and turning boats more and more into commodities everyday. The Internet can “package” a dealership so it looks flawless, but because there are so many sellers selling the same stuff the customer takes a mental shortcut and shops almost exclusively on price alone.
Allen Hansen who runs family owned Hansen’s Harbor Marina on magnificent Lake Pepin in Minnesota reports he gets about 500 “hits” a week on his Web site and that “so many of them want to beat me up on price-saying they can get the boat for so many dollars cheaper. I say-go for it.” Bravo Allan! You won’t allow your well-managed operation to become an auction house.
The Internet, for all its fabulosity, has some pitfalls and landmines obstructing your livelihood. While it may be good for the consumer, pitting dealer against dealer and encouraging revenue and margin erosion, we urge you not to fall for the trap. You aren’t just selling metal and fiberglass commodities; you are really selling reputation, image, customer service, integrity, speed, reliability, neighborliness and all the stuff that spells l-o-y-a-l-t-y. Loyalty is the glue that allows you to weather the storms of economic cycles and lousy weather. Loyalty is your most precious asset. Loyalty doesn’t have a price tag, it can only be earned in the hundreds of daily transactions you have with your customers — most of which will be found in your geographical area. Serve your local customers like they are the most important people in your world, and they will beat a path to your door and they won’t mind paying you for the pleasure.
Remember your customers want value from your dealership. We define value as product plus process (customer service) divided by price (P+P÷P). Selling on price alone causes a homogenization of product and price, and ignores your real strength or competitive advantage — superior customer service. All doctors have medical degrees, but too few have a good bedside manner. All dealerships have products, but too few have remarkable service quality.
What’s more? If you train your customers through the Internet to buy on price alone, they will discover they don’t need a middleman. They don’t need brokers, agents and they really won’t need you. Witness the decline of stockbrokers and even real estate agents. The middleman is being squeezed out of the buy/sell equation.
“Having a presence on the Internet is crucial in order to be in the ‘game’ and is a tremendous tool for product research and evaluating features and benefits,” according to Tony Zielinski, owner of American Marine and Motorsports in Shawano, Wis. “But if you make a boat purchase on price alone … let the buyer beware. Bells and whistles and lowest price are never enough to compensate for poor service or customer indifference.”
Dealer’s beware — you’re not selling peanut butter. You’re beginning a relationship with the customer. The sale only consummates the courtship … then the marriage begins.