Price is not the foundation of your Unique Selling Proposition

Publish Date: 
Aug 26, 2012
By Rod Stuckey

THE ANSWER TO THE question, "why should I do business with you" is the foundation for your marketing message. And your message is called your Unique Selling Proposition, or USP.

Your USP is typically the first and most fundamental marketing project you must complete to develop a successful marketing and training program. But most dealers put little or no thought into their USP — until their advertising rep is sitting in front of them asking what marketing message they wish to convey to their customers.

Reaction often leads to this fatal flaw: promoting price to get customers in the door. This flaw is especially apparent in competitive markets where there is an incestuous copycatting of discounters based on the “If they can do it, so can we” mindset.

When you make price the main focus of your marketing message, you commoditize and devalue your products and your dealership. When your marketing emphasizes price, you invite prospects and customers to use price as the answer to that important “Why should I choose you?” question.

As a general rule, if the masses are doing it, do the opposite. And this certainly applies to leading with price in your marketing messages.

This reminds me of the story of two guys who decided they would make some money selling watermelons. They purchased the watermelons for $1 per melon and decided they could do more volume if they bundled them at a discounted price. They come up with a great sales and marketing plan to sell a dozen melons for $10. Eventually they started to figure out they weren’t making any money; in fact, they were losing money. The one proud business owner turned to the other and said, “You thinking what I’m thinking?” to which the other replied, “Yep, we need to buy a bigger truck.”

I learned the hard way that you can work diligently and sell a lot of product, but if you have heavy discounting, you will make no money. I remember sitting in my GM’s office at the end of a wide-open Saturday event. I was exhausted, yet excited at how many door swings we had. Our marketing worked! Or had it?

My then-rookie GM, who was very attentive to his numbers, pulled out the end-of-day report and his calculator. We had promoted big discounts in all departments, and I had underestimated the consequences of those discounts. When he added up the gross profit from all departments after the discounts, I was completely sapped. That was nearly 15 years ago and I can remember it like it was yesterday. From that day forward, we never again advertised price, and instead focused on conveying a compelling USP.

WHY PRICE DOESN’T CUT IT
In a 2010 J.D. Power and Associates SSI study, customer treatment actually trumps price during the new vehicle sales experience. This validates that the customer experience truly is the next competitive battleground — not price. (continues)