- May 1, 2006
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- Alex
Craig certainly hit the nail on the head with the right WOW factors. I can tell you from experience that a value-added proposition does not guarantee you anything...and in most cases it gets you the customer you don't want.
In Hampton Roads, VA value-added propositions were everywhere. Free oil changes, state inspections, tires, engines guaranteed, manicures, hair salons, and I can keep going right down to pole dances at some of the independents. It was insanity. I was selling cars in the middle of the "value proposition wars" and it simply made customers expect the dealer to give up all profit and all sorts of other freebies. It just invited it. It turned normal customers into mooches and brought the freebie-crazed folks out of the woodwork in the service department (the people you can't upsell). It eventually led to a major struggle in CSI, some PVR challenges that led to making all the profit in F&I (think of the chargebacks) and consistently large expenses.
There are some good things to be said about a bad economy. One is that it forces people to look at what works. It forces people to stop being lazy. And it forced some dealers to dump their value-added programs. Getting rid of them actually did more good than anyone imagined!
However, with the economy having a perceived stability right now, the first thing that is coming back is laziness. With laziness, excuses. Excuses come with requests to spend more money so more excuses can be given to keep the laziness going strong. A value-added proposition is something that helps to keep the laziness rolling.
Get back to what Craig was saying. Do that consistently and you will have no need for a value-added WOW program.
In Hampton Roads, VA value-added propositions were everywhere. Free oil changes, state inspections, tires, engines guaranteed, manicures, hair salons, and I can keep going right down to pole dances at some of the independents. It was insanity. I was selling cars in the middle of the "value proposition wars" and it simply made customers expect the dealer to give up all profit and all sorts of other freebies. It just invited it. It turned normal customers into mooches and brought the freebie-crazed folks out of the woodwork in the service department (the people you can't upsell). It eventually led to a major struggle in CSI, some PVR challenges that led to making all the profit in F&I (think of the chargebacks) and consistently large expenses.
There are some good things to be said about a bad economy. One is that it forces people to look at what works. It forces people to stop being lazy. And it forced some dealers to dump their value-added programs. Getting rid of them actually did more good than anyone imagined!
However, with the economy having a perceived stability right now, the first thing that is coming back is laziness. With laziness, excuses. Excuses come with requests to spend more money so more excuses can be given to keep the laziness going strong. A value-added proposition is something that helps to keep the laziness rolling.
Get back to what Craig was saying. Do that consistently and you will have no need for a value-added WOW program.
good idea - we need to do something.
