Defining Your Value Proposition
Knowing What You Represent Can Increase Customer Loyalty
By Denise L. Rondini, Executive Editor
Although every dealership intrinsically has a value proposition, many dealer principals have not taken the time to define it properly, nor to share it with their employees.
This can result in different employees sending different messages to customers and customers having different experiences with each transaction they have at your dealership. The problem is multiplied if you have multiple locations. Most customers want to know what to expect every time they interact with your dealership.
Failure to establish your value proposition can result in different experiences at different times and this can lead customers to seek out your competitors who may offer them a more defined experience.
Developing a value proposition does not happen overnight. It takes time and effort and is the result of understanding your core values, mission statement and unique selling proposition.
Core values are the foundation on which your company determines how it conducts itself.
If you do not have a defined value proposition, you need to set aside time to develop one. According to Tom Marx, CEO of The Marx Group, you can begin the process by asking questions that will result in an accurate description of your business. This could include questions like: What does our business have to offer? Are we a good place to work? What makes us appealing to customers? What was the initial vision of the founders? What sets us apart?
You can solicit answers to these questions from your employees, customers and suppliers. Once you have an accurate description of your business, decide how you want your dealership to be viewed by others including employees, customers and suppliers. If you are lucky, the feedback you solicited in the beginning will match up with how you want to be perceived. If not, you will have some work to do to ensure your actions match your beliefs.
You next need to look at your strengths and weaknesses, as well as internal and external threats and opportunities. You also need to assess the competitive landscape and determine their strengths and weaknesses.
Once you have gathered all this information you can write your value proposition. Remember that your value proposition is more than just a slogan; it is the foundation of your business.
Consistency is one of the main benefits of having a value proposition. “When customers understand your value proposition, they have the experience that every interaction and transaction will be similar, consistent and dependable,” Marx says. “This builds trust, and as a result, loyalty.”
Articulating a value proposition is not enough. You and your staff must live it. “We started incorporating [our value statement] into our planning process and then it became our guiding response on how we wanted to grow our business,” says Eric Jorgensen, president and CEO of JX Enterprises.
Today Jorgensen says he does not have to preach culture and vision. “Everyone who is here knows our mission statement. They don’t have to recite it; they know it.”
But he cautions that going through the process, especially if you are realigning your culture, can be difficult. “When you are driving a culture change, you need to start building a core team that aligns with your vision,” he says. This can result in having to make some changes in dealership personnel.
Ultimately, having a defined and articulated value proposition will result in a strong, more viable business model. Your employees will know what your dealership stands for and will know how to respond to customer needs in a manner that aligns with your values.
In today’s competitive environment, the importance of a value proposition has never been greater. A well-defined value proposition reminds customers why they chose to do business with you. Customers who understand your value proposition are usually very loyal.
“People come to us because they know we have some really strong values and that our integrity is sound,” Jorgensen says.
Failure to develop and articulate a value proposition will prevent your dealership from reaching its full potential and from growing in the future.