How to Differentiate Your Auto Dealership from the Competition

Competition in auto sales is fierce. With so many options for car buyers to choose from, how can you differentiate your auto dealership so you stand out from the competition and attract more customers to your business? In this article, we will tackle this important subject and guide you in the fine art of creating a unique differentiator for your auto dealership.

3 Elements of a Good Differentiator

A key differentiator is a brand’s distinct value that sets it apart from other competitors in the market. It answers the question, “Why would a car buyer choose our auto dealership over one of our competitors?” The answer must be compelling to persuade potential buyers to choose you over anyone else.

According to the experts over at Brand Master Academy, a good differentiator has three characteristics. It should be:

Unique
Valuable
Defendable

Let’s discuss each of these elements.

Unique

Unique means that your customers cannot find the exact differentiator elsewhere. It is unique to your specific business, and people must come to you to get it.

To create a unique differentiator, you must understand your competition inside and out. For example:

Marketing: What is their signage like? What kind of promotions do they run?
Physical Location: What cars are they displaying? What is the layout of their dealership like?
Salespeople: How do their dealers dress? What words and mannerisms do they use?
Process: What is the car-buying process like? How do they treat their customers?
Online Presence: What does their website look like? Are they on social media?
Personality: What’ voice’ do they use in their marketing? What message and story are they sharing?

Competitor research is an essential step if you want to differentiate your auto dealership from the competition.

Valuable

Valuable means that your differentiator must be of value to your customers. It should highlight something you offer that has monetary value, time value, convenience value, or any other value (for example, how does it improve their lives?).

To create a valuable differentiator, it’s essential to understand your customers. Who are they? What are their key demographics? What is their life like? Start your research by creating a customer avatar to understand who they are, their challenges, and pain points. From there, you can contemplate what they consider important in life and what they are looking for when purchasing a vehicle. One of the main ways you can differentiate your auto dealership is by figuring out what your ideal customer values so you can give it to them in a way that goes above and beyond the competition.

Defendable

When we say that a differentiator should be defendable, we mean that your differentiation strategy should not be easily replicated. And this is the critical area where many car dealership owners go wrong.

If you say your differentiator is low price, your competitors can easily replicate your price point—and then it won’t differentiate you anymore.

You encounter a similar problem when you try to claim a differentiator of having the highest quality, the best customer service, the most extensive product line, etc. There will always be a competitor who can promise better choices, quality, or customer service. In the end, your differentiator could be replicated, making you ‘just like everyone else.’

That’s not to say that something like customer service can’t be your differentiator; however, you would want to dig deeper to get more specific.

For example, maybe you focus on your superior communication with customers because you’re the only dealership in your area that uses an array of communication methods, including text messaging for status updates. Or maybe you focus on your industry knowledge in helping car buyers because you’re the only dealership with an extensive blog of articles and online resources. Whatever you choose, you will need to defend your differentiator and claim it as yours and yours alone to differentiate your auto dealership.

Finding Your Differentiator

Now that you understand the basic characteristics of a good differentiator, it’s time to determine how to differentiate your auto dealership from the competition.

There are two main ways to do this:

Decide what you want your differentiator to be and then implement it in your business.
Examine your business to see what differentiator(s) exist, and then focus on that.

While you can create a brand-new differentiator, most auto dealerships will want to look at what they currently do to see if they can find a differentiator that already exists. It’s often better to find something already embedded in your company culture than to create something new and hope it works out.

Here are seven ways you can identify if there is already a differentiator in your business:

1. Review Your Company/Brand

Take a look at the brand you have created. How is it different than the competition? Is there something unique about your history, story, mission, or values that will differentiate your auto dealership from the competition? For example, maybe you are the oldest car dealership in your area, so your differentiator could be your experience and reputation over the years.

2. Review the Customer Experience

Map the entire customer experience, from when a customer becomes aware of your car dealership to the moment they walk out with a new set of car keys in hand. How do they find you? How do they interact with your staff? How do they make a purchase decision? Put yourself in the customers’ position and think about how they experience your business at every step.

3. Try the Differentiator Template

Brand Master Academy offers a simple template to help business owners determine their key differentiator. It’s a simple fill-in-the-blank sentence:

Our [blank] is the only [blank] that [blanks].

Our [offer] is the only [category] that [benefit].

Although there is much more to creating a complete differentiation strategy, this template will help you gather ideas.

4. Focus on How not What

Another strategy is to focus on the process by thinking about ‘how’ not ‘what.’ This is particularly helpful for auto dealership owners because a customer can get the same product (car) at another dealership. In a case like this, how you deliver the product can be the best way to differentiate your auto dealership from the competition. As you focus on the ‘how,’ make a list of all the benefits a customer gets from choosing your company to purchase a car.

5. Ask Your Employees

Your employees may have valuable insight into what differentiates your business too. After all, they may have worked for other dealerships in the past. Many of them also engage in direct communication with customers, so they know what people are saying – those who buy and those who decide to leave and shop elsewhere.

6. Ask Your Customers

Recall back that we said a differentiator answers the question, “Why would a car buyer choose our auto dealership over one of our competitors?” There is no reason to guess the answer to this important question when you can ask directly! After a successful sale, make sure to do a ‘win analysis.’ Have your sales team ask the following questions:

Why did you come to our dealership?
Why did you ultimately decide to buy from our dealership?

Another option is to conduct a follow-up phone survey a few days after the sale. Using tools like call recording, listen in, or ‘whisper,’ your marketing manager can gather the information from the call and assist employees in conducting better phone interviews.

7. Check Online

A final strategy is to check online to see what people are saying about your business. For example, look at review sites to see what people have posted about your business and search social media for your company name to see what comes up.