How I Got A Ridiculous Deal On A Car And Why Your Customers Have All The Power

When I walked into a local car dealership in Columbia, Mo. earlier this year, I knew which car I wanted and I had a plan to get it at a great price. Within thirty seconds of walking onto the showroom floor, a sales rep named Chad asked me to step into his cubicle with promises of “any soft drink flavor you can imagine” from the dealership’s extravagant new vending machine.  “Just water, Chad.” I replied.  I was here for business.

When Chad returned with my cup of water, I handed him a folder containing all my research – everything from invoice pricing to examples of what customers in the local area had paid for the same car in the preceding months. Chad looked a little disappointed, but his face moved into downright despondency a moment later when I proposed what I thought was a fair offer.

Chad, a genuinely nice guy who deserved none of this hassle, briefly rebounded long enough to pivot to a few of the standard replies, but I wasn’t budging on my offer. Dutifully moving on to the next part of the ceremony, he took out in search of his manager and to learn whether it was “even possible to let this car go for so little.”

A few minutes later, Chad came bounding back into the little cubicle like a conquering hero and proudly delivered the news that he had been able to make the deal happen. I almost felt bad when I said, “Sorry, Chad, now I want this deal.” I handed him my phone so that he could see the certificate guaranteeing me a price $800 below what he’d just agreed to.

In the brief time that Chad had been negotiating with his manager on my behalf, I Googled deals for the car I wanted and found a service that pre-negotiated prices for the very car I was buying with the very dealership I was visiting and all I needed to do was show them a certificate on my phone guaranteeing me the lower price.  No additional negotiation necessary!

Since the invention of the automobile, sales reps have been heading off to talk to their managers, but never before has that moment extended such an advantage to the customer.

This is only one example of how the 21st century consumer shops.  Today’s customer, unlike those of 15 years ago, is in complete control. Here are the three biggest changes that have taken place in that time:

1. Customers have more information.

My recent experience buying a car is vastly different than the experience I would have had 15 years ago.  Back then, I would have walked into the dealership just expecting to get hosed because the only thing I knew about car prices was what I learned reading the stickers at various dealerships. Today’s customers, however, have nearly unlimited information about products. Online reviews and price comparisons can help a consumer become even more informed than their sales person.  This results in the further commoditization of your products.  If you don’t find some new way of connecting with your customers and creating value in their lives, they are going to continually narrow your profit margin by forcing you to compete globally.

2. Customers have all the power.

In 1999, if you wanted to buy a TV you had to go to one of a handful of stores in town and settle for the best option. In today’s world, supply of just about any product significantly outnumbers demand. Thanks to online retailers, a consumer has literally thousands of options each time they make a purchase. At the very least, they have thousands of prices they can expect you to match before they make their decision.  This is a never-ending race to the bottom. The only way to make it stop is to stop selling products and start solving migraine problems.

3. Customers expect perfection.

While in the past consumers had to settle for the best product they could find, today’s consumers expect perfection. They no longer have to settle. That means that even if you once had the perfect solution, it might no longer be perfect.  Customer needs and wants change and technology allows us to produce so much more for so much less. If you aren’t constantly innovating to create products and services your customers can’t live without, you’re going to follow in the footsteps of numerous others who thought they were doing well and suddenly found themselves out of customers. Think Kodak, Blockbuster, and Borders.

The only way to keep these kinds of customers and even have a chance of accumulating new ones is to stop selling them products and start solving their problems.

To be continued… (make sure you are subscribed to receive the next installment).

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