Dealership MarketingOpinions & Advice

What Is Your Dealerships Product?

Our manufacturers and vendors can answer this question easily about their own businesses, but can the dealers? A product is a “thing produced by labor or effort. “A “thing” isn’t always something physically tangible.

What is the product of a dealership?

This isn’t a question anyone ever answered for me directly. It wasn’t something anyone directly trained me on, as I think it was just assumed I knew it.

The product of a dealership is the dealership.

I must admit, it is quite the duh statement. There really isn’t anything special about it, but once it is stated so plainly it makes all the sense in the world. Was this ever defined for you?

Now that we know our product is our dealership let’s talk about what a quality product is. We also know what that is. It is simply something you want to buy. The level of the quality determines the price.  It is a brand; it is a reputation. A quality product easily creates referrals, it doesn’t have to ask for reviews, and it generates fans.

Look at Apple. They build operating systems, but there are plenty of choices in operating systems. So why do Apple’s customers hang on its every new “thing” and talk about it like they’re part of a cult? Why do they pay more for it over and over and over again?

We can talk about Apple and everything they do all day long, but I’d rather you think about how your dealership is a product.

How is your dealership a quality product?

Is it time you define that for your coworkers and staff?


[highlight color=”#fddcaf” font=”black”]For further reading on this subject, check out Bob Lutz’s new book:  Car Guys vs. Bean Counters:  The Battle for the Soul of American Business [Amazon].  Yes, this article was inspired by this book.  It is definitely worth the read.[/highlight]

Who knew an argument with Jeff Kershner, in 2005, would lead to Alex becoming a partner with him on DealerRefresh. Where will the next argument take ...
I'm digging this post....whether or not Ed thinks it's crazy talk.

I think building a brand and selling that brand is the difference maker in lots of transactions by the time we get face to face with a customer.

How and where we "sell" that brand is the whole other discussion that happens on here with the majority still not understanding the where to sell that brand is in space, that is.
After talking things through with Ed, in direct tweets, I think he had the misfortune of hearing this notion first from someone who is a bit less "articulate."  I don't know exactly what that other person said, so I can't say whether we are on the same page or not (usually not).

At the end of the day there are two things I'd like people to walk away with after reading this article:

1.  It is all about your dealership.
2.  Read Bob Lutz's book.  
After talking things through with Ed, in direct tweets, I think he had the misfortune of hearing this notion first from someone who is a bit less "articulate."  I don't know exactly what that other person said, so I can't say whether we are on the same page or not (usually not).

At the end of the day there are two things I'd like people to walk away with after reading this article:

1.  It is all about your dealership.
2.  Read Bob Lutz's book.  
I'm going to Audible up Bob's book if it's available.....because like Ed sometimes my brain gets a little mushy from debating with a monkey online throughout the week.
Alex, I'll admit my brain became a little muddled with another person's views on a similar subject. I still feel that the "product" we sell is a car. It's about rolling iron over the curb. That said, if you don't establish a brand for your dealership and work hard to differentiate yourself from the pack, then your efforts as a marketer have failed and you will have far fewer opportunities to move the metal.

I agree with your two "Walking Away" points wholeheartedly!
1.  It is all about your dealership.
2.  Read Bob Lutz's book.

... but we could argue for days on the definition of "Product" :)
  • M
    Mike Thompson
  • August 17, 2011
Great article Alex.

The part that gets interesting is how dealers execute and communicate that that quality product across all of their marketing outlets (especially in the digital realm).  Very many dealer websites out there that do not effectively communicate a dealers quality product (or even a "why buy from us" statement) whether it be a slide on the home page or even a blurb on an "About Us" page.

  • J
    Jeff Kershner
  • August 17, 2011
You're "product" is what you make of it.

Cold Stone Creamery - is ice cream the product OR is it the all the delicious toppings and flavors being mixed in by the servers behind the counter using those special spoons to scoop, slice, throw and mix that sundae into a cone of pure bliss?

It's just ice cream.

Spotify - is music the product OR is it the ease of sharing with friends and receiving live recommendations, syncing with all your other devices that house the Spotify app?

It's just music.

ShowBiz Pizza - was it just pizza OR was this a magical land where to the Rock-afire Explosion would take stage with Billy Bob Brockali whaling away on the guitar while Fatz Geronimo was keeping the band in sync with his wicket beats on the drums? This was the original place "where a kid could be a kid".

It's just Pizza.

Ok - maybe I'm taking it a little too far :) After all, we're just here to sell cars right? Heck - anyone can do that. There's an endless supply of people and they all need to eventually buy a car. There's an ass for every seat.

Screw that - If it were my dealership, my business, my heart and soul, you better bet it would be a "product".
  • J
  • August 17, 2011
Jeff Kershner: [Screw that - If it were my dealership, my business, my heart and soul, you better bet it would be a "product."]

Would it?  Or would the DOLLAR be the heart and soul?

I know very, very few people who get into this business for the LOVE of selling and servicing cars.  I know quite a few people in this business who LOVE making the income you can make in automotive.

So then, maybe, your "product" is your "focus?"
OK Jeff - Point taken. I'd still contend that "product" of Cold Stone Creamery is the ice cream (with all the delicious toppings and flavors being mixed in). The product alone isn't only the REASON people eat there. But, that product (the delicious ice cream treat) still better be good.

At a car dealership there will be many reasons for a customer to buy from you including reputation, location, etc. But at the end of the day you're selling a car. You can't expect a customer to buy a car they don't want at a price that doesn't make sense - at least not very often. EVERYTHING matters but the car is still the product we retail.

A bad product with lots of nice amenities surrounding it is still a bad product.
Ed - does the dealer build the car?
Nope - but like most every other retailer, they sell products made by others.
  • J
    Jeff Kershner
  • August 18, 2011
My point, if you go into it thinking that the vehicle is your product, then that becomes your product and your focus. You control your product. You make the decision.
You might be a redneck if... think what you're selling is the same thing offered down the street (aka Product).

Sorry Brother Ed, yes, car is a product, but that's only part of what a consumer is looking for.
What is the customer buying? The Product? The Smiling Sales Rep? The
Internet Cafe in Svc? The Inflatable Gorilla?  NO.  I think the customer
is buying... Confidence.

Consumers seek a seller that inspires Confidence. The showroom visit is all about overcoming fears:
-Do you have a history of selling good product?
-Is this Product offered at a fair price?
-Does this Product have a good history?
-Will this product get me to work?
-If this product fails, will you be there for me?

We Sell Confidence.

Maybe I'm just an old fuddy duddy, but I will always contend that the "what" is a the car. The "how" in the case of a car dealer, is by instilling confidence.

You can't take your eye off the "how" for a minute just as you can't take your eye off the "what".

The product and the process go hand in hand and one without the other is a major problem. So Joe, I'm in full agreement that the customer is looking for more than just the car, the product if you will. My concern would be that it might be easy for some to put more emphasis on "how" we sell rather than "what" we sell. In the long term, that is a recipe for failure.

Jeff mentions a number of companies. Cold Stone Creamery sells a great "what" and the "how" is spectacular. ShowBiz Pizza sold a questionable "what" combined with a spectacular "how" - they no longer exist.

I'm not suggesting that the car is the only thing thing that matters to a consumer. It's not, they have lots of choices and you had better be differentiating yourself. But in the end, it's the car they pay their money for.
  • S
    Steve Lawrence
  • August 18, 2011
Any of you people ever been in a Starbucks? Sure you have. If your like me, it's my second home. What happens if you get a bad drink at Starbucks? I'll bet most people don't know 'cause they never had a bad drink there.

According to John Moore who wrote Tribal Knowledge...Business Wisdom Brewed From the Grounds of Starbucks Coffee, Starbucks is in the people business serving coffee.

To answer my original question, IF you got a bad drink, the Barista throws it away and makes you exactly what you want.
Someone just sent this to me, and I think it fits in here:

Incentivize people with a vision.  What is your product again?
  • D
    Dennis Galbraith
  • August 19, 2011
In classical marketing terms, Ed is right about the car being the product or merchandise. The dealership is the end of the distribution channel, the retailer. That isn't to say that retailers don't add value to the product, they must. However, marketers generally don't refer to the value added by sales efforts as a product. The service of vehicle repair is a product, the service lane is distribution. Having said that, the lines can get a little blurry.

A retailer of bottled water at the beach adds place utility. Nothing more, but it is worth a premium. Walmart doesn't add value any differently than its competitors, but it does it for less. If you sell cars at a premium, then you need to be able to demonstrate the added value. If you can't demonstrate it to the customer in the age of transparency and choice, then you need to think about selling on a low-priced transaction basis.

Some retailers actually make the product. Starbucks and Cold Stones were mentioned. Both of these companies add value to the product, primarily buy making it custom. They both try to add value beyond the product: clean restrooms, atmosphere, friendly service.

I don't think anyone is wrong here, it is more a question of vocabulary. In the pop-culture that surrounds marketing, the vocabulary constantly changes. In classical marketing terms the word product means what it has always meant.

All this misses Alex's fantastic point. If your people don't know how they are adding value, then they will not be adding much of it and they will not be fulfilled. To Joe's point, enhancing confidence adds value, but I think some stores need to be realistic about how much of this value they actually deliver and what it is worth. Getting the shopper into the right vehicle with the right mix of accessories, financing, service contracts, etc. is also a job worth doing and being rewarded for. Rarely are  the differences in vehicle prices equal to the cost of buying the wrong car and having to switch again. Proper matchmaking is just one way dealers can add value, but you need to be honest about whether or not you are in the business of proper matchmaking. I doubt anyone at a high-end dating service ever put a spiff on Ugly Betty because she had been around for 90 days.
  • A
    angelina smith
  • August 23, 2011
After reading your post, dealership is also an important part, for an specific there is an specific dealer for that.

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  • J
    Jeff Kershner
  • August 31, 2011
Well said Dennis. Much of this is a battle of words and how you define "Product".

I stand firm in the thought that the dealership should approach their dealership as the Product.  - "If your people don't know how they are adding value, then they will not be adding much of it and they will not be fulfilled"

Once you or a customer makes their vehicle purchase and leaves the dealership - what are they thinking about.. the dealership or their new vehicle?

A week later, their driving over to their friends house. What are they showing off.. the dealership or the vehicle?

Jeff, The ONLY thing I was arguing about was the definition of the word "Product". I agree wholeheartedly with Alex's goal. And I agree with the statement, "If your people don't know how they are adding value, then they will not be adding much of it and they will not be fulfilled".

A car dealer is considered to be pretty darn successful if they can hold onto 3 cents of every dollar they bring in. There can be absolutely no doubt that developing a great culture at your dealership will add value for the customer. That "great culture" translates into being your brand. And if that can add 1 penny on the dollar, you've gone from being a average dealer to a highly profitable dealer.

If "evolving" the definition of a word helps you accomplish that, so be it. :)
My two cents:

I sell Suzuki.  I love Suzuki, but as a brand and product it is pretty low on peoples' shopping lists.  In my market I outsell, in no particular order, Honda, Chevy, Nissan, Mazda, Hyundai, Kia, Dodge, Jeep, etc.  In fact, only two Ford stores and a Toyota store outsell Suzuki of Wichita. 

My customers buy Suzuki of Wichita - NOT Suzuki.  I understand the definition of a product.  Our product is our environment, culture, team, processes, and message.

I think Jeff is correct.  While we are all selling metal, we should be focusing on the things behind the metal.  The things that set us apart from all the other dealerships we compete with.  This is truly our product and the most important thing to focus on...

Just sayin'