Why Dealerships Shouldn’t Be Racing to the Bottom

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There is a common assumption among dealerships that the best way to reach more consumers is to lower prices—slashing those sticker costs in order to outflank the competition. It’s a race to the bottom, and in the past it may have worked well—but in today’s auto sales landscape, we’d argue that it’s counterproductive.

Why the Race to the Bottom Doesn’t Work

Certainly the consumers of today want to get maximum bang for their buck—but that doesn’t always mean lowering prices. Instead, dealerships should focus on improving and promoting their own unique value proposition—showing the customer that they will receive a great experience for their hard-earned dollar.

To be sure, if price is the only factor, dealerships will have a hard time competing with Craigslist and with other online discounts; your dealership will quickly lose sales shares, because you just can’t maintain your business while constantly competing with online prices.

Understanding the Sales Funnel

To really understand why the race-to-the-bottom sales mentality doesn’t work, it’s important to understand the buying process. You see, by the time a consumer reaches the bottom of the sales funnel, he or she has typically decided which make and model to buy. This decision has been reached on the basis of ample online research.

Once arriving at that decision point, the only thing left for the customer to consider is where he or she will buy the vehicle. Here, finding the lowest price point is certainly important—but there’s also the matter of overall value. Here’s where dealerships can shine—offering some unique benefit that no other seller can match.

Your dealership’s unique selling proposition could be a great F&I bundle. It could be an easy, no-hassle sales experience. It could be a trusted and affordable service center. It could be something else altogether.

What’s important is that you give the buyer a reason to purchase that vehicle from you, and from no one else—a reason to consider factors other than the bottom-line price. Because if price is all that matters, your dealership will have to constantly chip away at its own margins, or else have literally no way to compete.

Developing Your Value Proposition

Now, a word of caution is in order here: Your unique selling proposition needs to be something that’s a true win-win for you and your customers. Gimmicks or novelties aren’t going to be enough for you to earn business, especially not in the face of the ongoing price wars.

Something else: Your unique selling proposition should be included in all your dealership marketing—including even your own Craigslist ads. After all, Craigslist isn’t just a way for you to sell your inventory. It’s also a way for you to sell your dealership.

We’d love to help you with that, and our marketing professionals know just how to do it. Enlist Get My Auto to help develop and promote your dealership’s unique selling proposition—and get out of that race to the bottom! Contact us today.

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