There’s a belief among many in the industry that “innovative” dealers can somehow gain and hold a marketing or technological advantage over their competition. This belief is so strong among some, that they’ll often abandon tried and true solutions in favor of flirting with the “bleeding edge” – all because they believe this latest shiny object will give them the proverbial first-mover advantage.
First-mover advantage, for the uninitiated, refers to the very real advantage enjoyed by those who are the first to enter a given market or market segment. First-mover advantage has almost no application in automotive retail when it’s a dealer leveraging a solution offered by a third party.
No Barriers to Entry
You see, the great thing about technology and marketing solutions sold to dealerships is that no single dealer can hold a competitive advantage for very long. If the solution works – that is, if it genuinely helps a dealer sell more cars or reduce costs (or both) – the very idea of anyone keeping this terrific solution to themselves is ludicrous.
When any vendor has a product or service that provides real value for their dealers, they put their sales and marketing efforts into high gear to gladly share the stellar results their paying client’s report.
There is simply no barrier to entry for the second, third, or even 1,500th dealer to adopt any working solution offered by a vendor. Moreover, unlike those dealers diving in head first on an unproven solution, there is almost no risk for the dealers taking a wait-and-see approach.
It’s okay, in other words, for you allow other dealers to expend resources trying to gain and hold a competitive advantage with easily duplicatable technology or marketing.
So, We Can Never Hold a Competitive Advantage?
Dealers and groups looking to gain and hold a competitive advantage should stop eyeing solutions that anyone can easily duplicate and start giving closer examination to the dealerships that profitably grow market share year-over-year (because these dealers genuinely hold a competitive advantage).
Of course, you’ll quickly notice these dealers have the same websites as you, and they use essentially the same vendors you do. The difference? Top dealers are obsessed with measurement, process, and accountability.
Top dealers know there are no magic bullets and that no vendor solution – regardless of how great it is – will give them a sustained competitive advantage. Their competitive advantage comes from their leadership and their culture.
Characteristics of Top Dealers
Beyond their common obsession with measurement, process, and accountability, top dealers share a few characteristics that set their organizations apart from those chasing every shiny object and expecting the next solution will grant them a sustained competitive advantage.
Top dealers are dissatisfied. And, they are fanatics about improvement.
Just coming off a record month? Top dealers spend about 10 minutes congratulating themselves, then they become dissatisfied with treading water and fanatical about improving on this record. They know that properly measuring those things that matter, strictly adhering to their processes, and holding everyone (yes, even their managers) accountable all contribute to a great company culture.
Additionally, they know that without accountability to the processes that they’re measuring, there is no opportunity to improve. The great technology and marketing they buy is all subordinate to their people executing better than the guy next door. This execution is never by accident; it’s the result of strict, but simple, repeatable processes.
But, I Don’t Want to Miss Any Cool Technology!
You have nothing to worry about – just learn to emulate top dealers.
That is, you should listen to everyone. This means you’re willing to give every new vendor up to ten minutes to show you how their solution will either sell more cars or save money (or both). However, regardless of how convincing the sales pitch, top dealers also want these new vendors to prove it.
They’re willing to be the first to try something new, provided the vendor assumes all the risks of proving value. They do this because top dealers know that even if this product turns out to be the best solution ever, they’ll never be able to keep their competitors from quickly adopting it – instantly erasing any creative competitive advantage the new solution promised.
So, if you want to be considered a true innovative dealer, execute a strategy that revolves around your superior team and your unequaled culture. Then, feel free to add any new products, services or technology that can be proven to support this strategy, while avoiding those that are just shiny objects.