Value Trumps Price

November 2013, Auto Dealer Today - Feature

by Paul Potratz

There are many definitions of “value.” My favorite is benefits divided by price. This is a good representation of the trade-off often going through your customers’ minds as they compare vehicles. You can increase value by lowering the denominator (price) or by increasing the numerator (benefits), but you don’t have to do either. The most profitable approach is to enhance the perceived benefits of the vehicle as it is — and the store offering it.

Enhancing perceived benefits is what photos, videos and text descriptions are all about. Listings that simply describe the vehicle are not maximizing each opportunity. Your objective is to create an online presentation that guarantees you will be the dealer who gets the phone call, chat, e-mail or walk-in. This is especially true when your inventory is on a third-party site such as or, but the same rules apply for your own website.

Your competition is never more than two clicks away. Your online inventory needs to demonstrate value to keep shoppers from wandering off. While the shopper is on your site, the ball is in your hands, but that can change in an instant. Studies have shown that the average car buyer will visit 18 to 22 websites. This is a clear indicator that the majority of dealer and OEM websites lack engaging and informative content.

Heavy Equipment

One essential value enhancement is listing any special equipment the vehicle has and how it benefits the operator. The more expensive interior package provides a luxurious feel and a more prestigious appearance.

The entertainment and communications package make long drives and the traffic congestion more bearable. The technology package will impress friends and make co-workers green with envy. The cold weather package will start the car on cold mornings and warm the “tush,” hands and side mirrors.

Every year, your manufacturer is adding new features and great benefits to your product line. Some OEMs are offering great incentives, such as several years of free maintenance. All you have to do is tell the story. Unfortunately, very few dealers are doing so consistently.

There are many products for which the consumer has a difficult time comparing quality. That’s when price becomes a quality indicator. Years ago, academic research on the relationship between price and quality perceptions showed that women’s sweaters had a higher perceived quality when the price was higher, and beer tasted better when it cost more.

The value of some products is no more transparent today than it was when this stream of research started in the ’40s, but that’s not the case with cars. That doesn’t mean you need to increase or decrease your prices, but it does mean you need to justify them. It’s not all about price.

When it is, you can bet an unprepared salesperson resorted to closing on price vs. the vehicle’s value proposition. The retailer who best shows the shopper why that product is worth the money is the retailer who is most likely to sell it at the advertised price.

What Is Your Store Worth?

Value is not all about the vehicle, either. Why should someone pay more for a vehicle from you when it’s a few bucks cheaper across town? What is your unique selling proposition? It can’t just be stated online; it needs to be demonstrated.

If you are the dealer that has the best product specialist, have him or her record a video demonstrating his or her expertise. The same goes for vehicles, service contracts, protection products or anything else you want car buyers to purchase. If you have a competitive exchange program, list the terms and post testimonials from satisfied customers. Whatever makes you a more valuable place to buy needs to be demonstrated.

The only time price should be the focus is when you have the opportunity to demonstrate any discounts or incentives that may apply. For new cars, start with the MSRP; for used cars, your original price. Then subtract any discounts and incentives and show the net price. This has the appearance of transparency. Shoppers know the vehicle is worth the MSRP, and they know they don’t have to pay it if they act. Also include a payment example as well as a lease example. No matter how the shopper wants to get into the vehicle, you have the proper terms to fit his or her needs.

Demonstrating your store’s value should not stop with your policies and service. You need to demonstrate the value of your staff as well. Many shoppers will never visit your staff page, but this is critical information for those who do. The standard today is to let the shopper know about each of your people via text, video and links to LinkedIn or other social media pages. Just make sure you’re showing each team member in a positive light. This is proving to be a huge competitive advantage across a niche set of shoppers who insist on picking their salesperson. It’s also a compelling reason to develop an internal social media strategy.

There is a critical level of information needed to tip the scales in your favor. The amount varies with each customer. Don’t approach demonstrations of value as though you were trying to meet the needs of the average shopper, because you will only establish a value proposition your store will never be able to fulfill. With a little effort and a lot of commitment, you can win the tough customers and claim more than your share of the average and easy-to-please buyers.


  1. 1. Brent Abdulla [ November 21, 2013 @ 10:37PM ]

    Excellent article! You must separate yourself from your competition with your processes and techniques. This applies from a digital "UP' to the internet "Up". valYOU is created by YOU the sales representative and your ability to showcase your talents, experience, facilities and services in a benefit laden fashion. People don't buy features...they purchase benefits. What does buying a vehicle from YOU and your store do for ME? If you can logically explain these benefits you'll hold more gross, sell more units and incresase CSi. The cream rises to the top! What are you doing ot ensure that cream is your experience at your store? Can you name 10 reasons why I should buy from you right now? Whip out a sheet of paper, open a note on your smartphone, start a document on your computer and give it a try. Just don't tell me what you have, tell me what it does and how it benefits me. I.e.) Complimentary Shuttle Service...serves the greater metro area all day long...gets you to your office, the mall, home or other destination and brings you back when your vehicle is completed. Saves you time and money! There's one...the next nine are yours. Good luck!


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