How to Set Your Dealership Apart from Your Competition

Competition in business is inescapable, and more often than not, necessary. It forces companies to constantly evolve so that they can maintain their customer base and profitability. Of course, competition can also easily cripple or outright kill a business, if it’s not careful. So, there’s certainly a risk associated with competition.

For most power equipment, powersports and marine dealers, their biggest competitors aren’t other dealers. Instead, they typically have to contend with big-box stores, such as Home Depot or Lowe’s, and online retailers like Amazon.

So, how can your small-to-medium-sized dealership compete against juggernauts like Amazon or Home Depot? The key to that is figuring out why your customers would choose them over you and then winning their loyalty by offering something those businesses don’t.

With that in mind, here are some unique strategies that could make your dealership stand out:

Strategy #1: Showcase Your Industry Expertise

What separates you from online retailers and big-box stores is your industry focus. So, if a customer has a question about a part or a piece of equipment, you’re the one who can provide the most accurate answer, and in turn, help the customer pick the right product.

Big-box stores lack this kind of focus because of the variety of items they carry, while online retailers don’t offer any kind of product-focused customer assistance at all.

“You won’t find many associates at Home Depot who are as well-trained as any person here,” said Justin Ishmael, the Parts Counter Salesperson at the outdoor power equipment department of Crescent Springs Hardware. “We like to hire in the winter and train aggressively for the coming spring. That way, no matter how big or small a customer’s issue is – whether it involves a $2 part or a $2,000 piece of machinery – we’ll always put the same amount of effort into helping them.”

In fact, Crescent Springs Hardware’s power equipment department no longer even competes with Home Depot or Lowe’s.

“Now Home Depot and Lowe’s both send over some of their floor models to us for assembly – they have become our customers,” said Ishmael.

So, whenever a customer comes into your dealership, make sure there’s always someone available to show them what’s what.

Strategy #2: Have Your Most Popular Products Always on Hand

Let’s assume that you display your expertise front and center each time a customer comes in. Your next challenge could be: what if customers simply come in for advice and then leave the store to buy the product elsewhere?

To answer that question, you need to take a look at your inventory. Generally speaking, there are two reasons why a customer would purchase the same product elsewhere.

• You don’t have the product in stock
• Your price is not right (highly unlikely)

Let’s address problem #2 first. According to dealership expert Bob Clements in his guide on how to generate up to $100,000 in extra income, 60% of customers are more concerned about the value they get out of a product as opposed to its price, and 25% are simply looking for a dealer they can trust. This leaves online 15% of dealers who are actually shopping for low prices. In other words, very few people will leave you for another retailer because of the price.

Now onto issue #1 – not having the product in stock. This is a big one. Nothing irks a customer more than coming into a store in person and not finding the item they seek. That’s practically why they came by in the first place.

Keeping items in stock is definitely a challenge. To make sure you can do that effectively, you need to be able to track what’s selling and what isn’t. And of course, you need to keep the items that sell well in stock at all times, while minimizing the ones that don’t sell. Maggie Less, the Power Equipment Division Manager at Pinnacle Award-winning Middleton Ace Hardware, uses a dealership management system to keep her stock in check.

“Sometimes, we can’t compete with online retailers on price, but we can compete on availability,” she said. “More than likely, when a customer walks in, we will have what they need immediately. Based on the history that I can see in our system, we will often have the right part on the shelf at the right time of year. It might cost a few more dollars, but they can get it that day instead of having to wait.”

Strategy #3: Accept All Equipment

Here’s a business suggestion 101 – don’t turn down any customers that come through your shop!

Surprisingly enough, many dealerships refuse to work on the equipment that was bought somewhere else. Unfortunately, inflexibility is one of the quickest ways to lose a customer for good. Want to inspire loyalty and keep your customers coming back? Then work with them. Be flexible. Help them however you can. Sticking too closely to “policy” will only drive people away.

Strategy #4: Identify and Satisfy Your Customers’ Needs

Do you know which of your customers buy which products? Unless you have quality dealership management software, then probably not.

The advantage to tracking your customers’ buying habits is that it allows you to become familiar with what they’re interested in. Chances are, you see around 5%-10% of your loyal customers on a regular basis. Do you know them by name? Do you remember what they bought last time, so you can ask how it’s working out?

Good software will allow you to store all this information and pull it up in seconds whenever you need it. Imagine how special that customer would feel if you greeted him or her by name and asked how that snow blower they bought last month was working out for them.

“The way our software retains past work orders and customer repair histories is great,” said Justin Ishmael from Crescent Springs Hardware. “It helps us out a lot, especially on the rare occasion when a customer has an issue.”

Strategy #5: Display Your Inventory Online

With so many customers online these days, it only makes sense that your dealership has some kind of online presence as well. Otherwise, you’re just giving your customers away to your competitors.

If you don’t already have a website for your dealership, then you need to start with that. Once you’re all up and running, the next step should be showcasing what you have in stock. Initially, you may simply list all the products you sell, along with their photos, but down the road, you should also provide up-to-date quantities and pricing. That way, a customer will know what you have even before they walk into your dealership.

This is something many automotive dealerships are already doing, even though they don’t sell their vehicles online (though that’s probably also in the pipeline).

Since updating this kind of information manually would be far too time-consuming, you will need to automate the process using some kind of software. Otherwise, there’s no need to even try.

Last Word – Make Sure Your Staff is Competitive as Well

Your staff is the reason your dealership is still in business, so if they’re not up for the challenge of keeping you competitive, then you probably won’t be. To ensure they are able to carry the torch even when you’re not around, you will need to keep a close eye on each of them. That way, you’ll be able to avoid employee burnout, and in turn, maintain a customer-friendly environment.