Differentiation gives shoppers a reason to choose your dealership from among other options in the market area. It may also give you the ability to compete on features other than price. In short, a well-differentiated dealership can attract more customers and charge more than their competitors.
How does your dealership stack up against your main competitors?
Ask yourself some questions:
- What are the top 3 features or attributes that differentiate your store from your 2 or 3 most important competitors?
- What are the top 3 features or attributes that differentiate each of your key competitors from your store?
- Which of the features and attributes are most important or relevant to your customers?
- How many of your customers and prospective customers are familiar with your differentiators?
- How do you know the answers to these questions?
- We researched our customers
- Gut Feel
Differentiation versus Table Stakes
Dealerships can lose track of how their differentiation compares to that of their key competitors over time. What started as a highly differentiated feature loses that position as competitors find ways to emulate what once gave you a competitive advantage.
Differentiated features in automobiles offer a good example. In the 1940’s electric windows were found on a few luxury brands such as Packard and Lincoln. It was an extra cost option that differentiated high-end models within these brands. Today virtually every car has electric windows. The feature is necessary but not different. Power windows are table stakes in the competition for car buyers. Manufacturers can’t charge more yet can’t sell a vehicle without this feature. Table stakes are what is required to “get in the game”. How many features does your dealership promote that are truly different versus those that are table stakes?
Make sure your differentiators are still different. Ask your customers what matters to them. For a more in-depth look at evaluating your differentiation try the PWC “Right to Win” calculator found online here. See the examples below and then enter your own differentiators.