Posts tagged consulting
The Terminator franchise has been one of the most successful entertainment series in history, ranking up with the Toy Story trilogy, the Lord of the Rings trilogy, and even the original (and best) Star Wars trilogy. If you’ve been living under a rock, or are Amish, and haven’t seen the Terminator, it starts in the near-future where an artificial defense intelligence system becomes self-aware. After the scared military operators tried to pull the plug, the system (Skynet) decides that humans pose a threat, and summarily launches a nuclear assault on humanity. It’s just the type of stuff you want to talk about with your kids before bed. I’ll be back to the Terminator reference in just a bit.
As with last year, SXSW Interactive had some real face-melting presentations. Whether it was in the title or not, geolocation, virtual display of reality, speech recognition, gesture input, and artificial intelligence pervaded many of the sessions. What this means is that location-based services are about ready to go into overdrive. Although, I know a lot has been written regarding location-based services (LBS), including a recent piece by Joe Webb and DrivingSales’ Eric Miltsch, I got to hear about the future of these services from those who created them. I’m here to tell you, those services are not as simple as they seem.
At face value, these applications look like games, or a means to get hammered with your friends in Vegas. However, most of these tools have already moved beyond the game element, and are starting to drive value for retailers. The key thing you need to understand is that these platforms that we are using today are not permanent. The current technology still cannot support the true potential. Most of the LBS technology we are using today will be obsolete in a matter of months, and will be utterly antique within a decade. The millions of users who use LBS technology everyday will continue to jump from platform to platform because they find it valuable. So while I won’t get hung up on the platforms or the different services, I will tell you this: If you are not using LBS, you will be ignored.
Why would I make such a bold statement? The answer is simple: In just a matter of months, augmented reality hardware will be widely available. For those of you who have seen the Terminator, you will soon have the means to see like the Terminator. You will be able to scan objects by simply looking at them, with relevant data popping up in your vision to help you make decisions. Military jets have utilized this technology for a few decades, projecting critical data onto heads-up displays, and even a few cars have adopted this technology. Soon services such Wikipedia, Google, Facebook, Wolfram Alpha, and Foursquare, can, and likely will, supply their data directly onto your eyeball. People won’t just see a car lot anymore – they will see OEM information, vehicle data, pricing matrices, incentives, customer comments, and ratings – all without lifting a finger
Before you quit your job, realize that this technology can also be used to your advantage. Remember that CRM your manager has been bugging you about? What if that technology was leveraged in an augmented reality environment? Imagine if a customer’s name, current vehicle, time of last interaction, service visit frequency, website activity, family information, etc., appeared right next that customer as soon as you looked at them. How much easier would your job be? Would you start taking better notes if the information would automatically be recalled later? Would you terminate skating coworkers? I bet you would.
The good news for some, and the bad news for others, is that augmented reality will be available to the masses come Christmas time. Google will be offering glasses that will be connected to your Android device, and will project its Places and Latitude data into the users field vision at the end of the year. Other hardware and software is being evaluated, and will available next year. Contact lenses offering the same technology have already been tested, and will soon follow. Even without the glasses, there are already enough smartphones for nearly every man, woman, and child in the world, and the technology exists to automatically display alerts on those phones. The Internet age is just hitting its stride.
How do we prepare for this onslaught the future? By being better today. Claiming your dealership’s Foursquare/Places/Yelp/etc. location is the first step, and frankly it’s not enough. Understanding the users behavior is the next, and most crucial, step. Even without adding users as friends, you can still gather data about their destinations, achievements, tips, and how many friends they have. If you are able to “friend” them, you can uncover more useful information. Understanding how to navigate this information will allow you to see how your customers interact, what they may say about you, and find out how loyal they are to other businesses. All of this information needs to recorded. Right now people have to take the time to gather information about your dealership. YOU must begin capturing just as much data and developing just as much software before you get overrun as it will be the only thing to save you in the future. There is no avoiding it. Take advantage of today’s technology before customers can gather information automatically, tomorrow.
Ignoring technological advances does not make them go away. Consumers take advantage of new technologies every single day. They buy a car every three years. By not embracing these changes, you accelerate the way these changes impact your business. You have created several opportunities for other companies to exploit your desire to keeps things the same. Don’t let the machines beat you. Take every opportunity to learn about new technologies on your own. Use change to your advantage. As it is with the Terminator, technology will just keep on coming. You can’t stop it.
Periodically, we receive an email or a phone call from an ISM wanting to know how to increase their closing ratio from 30% to 40%. I often have to bite my lip in order to prevent myself from laughing hysterically. Invariably, I start to ask how that dealership is measuring its closing ratio. However, as I am asking that question, I am always asking myself why isn’t there a standard equation for measuring closing ratio?
Let’s think about other forms of measurement, for a second. Although arbitrarily determined, units of measurement have been defined, agreed upon, and accepted for almost everything you can think of. Temperature, length, weight, sound pressure, luminescence, even spiciness, can all be measured. Why? Among many reasons, it’s a way of replicating a result. Imagine Shaq’s “pinch” of salt vs. your grandmother’s, and you’ll get the point. Without using standard units of measure, we can’t replicate the results that another has experienced.
If we can’t replicate the results of another’s success, how can we improve upon it? We’ve all been to conferences where one ISM tells another ISM that he’s closing at a 17.48% closing ratio, while another ISM is stating that they are closing at a 103% closing ratio, while another ISM walks up to them, and quizzically mutters that they are only closing 4%. Who’s right? They all are. Why? Because every ISM seems to have their own equation for calculating their closing ratio.
The simplest measure of closing ratio is sales divided by opportunities (leads) in a given time-frame. I refer to this as a Gross Closing Ratio (GCR). Many times, this simplest of closing ratios, yields a result that isn’t good for one’s self esteem (given the traditions of bigger is better bragging rights in the car business). Self esteem can be further battered by going to a conference, or from reading the different forums, where people can endlessly brag about their closing ratios without the substantiation of results and equations, or divulging their lead-source mix. So ISMs the world-around create complex equations to measure closing ratios that show impressive results so that they can feel like they can offer comparable results.
I have totally been guilty of this. When I first started in the business (before the magazines and forums), I came up with a formula to measure my monthly performance. I copied and pasted the data from the lead buckets in CarPoint (then AVV, and then BzTrack) onto a spreadsheet. I created an equation that netted out all of the leads that were not true opportunities that month (i.e., bogus contact information, people searching for credit approval, people who were 30+ days out, etc.). In my mind, I wanted measure myself against the guys on the lot, and I figured that they didn’t get the same “riffraff” I did. I would divide this number by sales, and miraculously, I closed as well as the most seasoned lot-guy we had. It also gave me a 11-13% bump compared to my GCR. Too bad I didn’t have an Internet forum to share my triumphs on.
However, as I moved on to corporate Internet process development, and then on to technology, I came to realize what the lack of standards really means. When I began to start reading the emerging automotive Internet sales forums, and especially after I started attending the conferences, it didn’t take long to realize that there were no hard-and-fast rules on how to calculate closing ratio. At the risk of causing a stir, I’d go as far as to say it borders on urban legend for some. Given the fact that I’ve analyzed data for well over 400 franchises, just counting the corporates, I’d say often times retail personnel and their management are presented the statistical outliers, as opposed to the norm. Since there is no universally recognized or sanctioned equation to measure automotive Internet sales closing ratio, everyone is right. This is tantamount to declaring myself the tallest person in the world, but not using feet or meters as a measurement, or offering any mathematical equivalent. Without agreeing on the math, we cannot objectively compare anyone’s results, let alone replicate them.
The automotive Internet sales closing ratio is just one measurement that could use standardization. I am hoping that at some point in my lifetime, or before the Yellowstone volcano erupts, we will have a sanctioning body to govern our automotive Internet sales standards. If you honestly want to help someone get better, be more transparent with your calculations so that they can better measure themselves against your success. If we all use the same math, and you’re still on top, then you can shout it from the rooftops. In the meantime, keep asking questions about how your peers are calculating closing ratio; what leads to include or exclude; what time-frames to consider. It’s OK to call BS. Let’s come up with an equation that everyone can agree upon. Here’s looking at you, shorties.
Back and forth. Up and down. Back and forth. Up and down. Back and forth goes the salesperson negotiating with the customer. Up to the sales manager’s desk the salesperson walks and then back down to their desk they go with another price. Another attempt. This volley with the customer has become archaic and antiquated. It is disliked and disgusting. The days of penciling deals over and over must end.
No more No. 2. No more pencils. That strategy is done. It’s finished. Someone tell your sales managers. Break into their desks and steal the pencils and multi-colored Sharpie markers. The consumer has moved beyond this tired strategy and is ready for new days of selling! Stop the negotiating with customers and start the educating.
It is time your sales managers and sales people end the rigmarole they’ve used for years and do away with how they’ve penciled deals. Instead, your managers and salespeople must learn how to overcome objections and negotiate through education. The consumers are coming in with very specific expectations and very detailed research. Why put them through the constant back and forth? Instead, you must utilize the online resources and data at your (and the customer’s) disposal to validate the price you charge.
Dedicate yourself to understanding what all is available to your consumers online and begin using the third-party data as evidence to defend the price you are charging. I’m not advocating a one-price solution here. Negotiation is still allowed and going for gross is still acceptable, but be prepared to answer the “WHY?” question when it arises with real data.
We have now entered the era of Validation Selling. (Yes, I’m coining a new term here). We must prove the reason we price our vehicles by utilizing the data they already have. Moreover, we must eliminate the tactic of writing down our offer on a half-blank sheet of paper with markers and pens and begin presenting our figures on a fully-printed out pricing proposal. All figures must be entered into the CRM and printed out as if it were an official contract. This must happen from the very first offer. Having it printed and available in a clean format lends credence to the numbers your sales team present. Certainly more validity than a four-square with $24,995 scribbled across it in thick blue ink.
Get on board with Validation Selling. Throw out any previously-held beliefs that the customer still enjoys the ‘back and forth, up and down, crossed-off price here and slightly lower price penciled there’ strategies that you’ve grown accustomed to. Educate yourself and then educate the customer with online, third-party data – or be prepared to overcome it. You will sell more vehicles and build a quality customer sales experience at the same time.
This is how to sell vehicles in 2012 and beyond. Education over Negotiation. DealerKnows are the Validation Selling Specialists. Let us explain it to you.
A couple weeks ago, I was brought in to consult with a dealer group on the East Coast. As with most people, I passed the time by reading a book. On this particular trip, I read the Lean Startup by Eric Ries. One of the concepts that is used throughout the book, is the Pivot, and the practice of pivoting. In essence, pivoting is understanding your original vision is flawed, gathering all the information gleaned while discovering the flaws, and moving in another direction to maintain a growth trajectory. In layperson’s terms, it’s setting off in one direction, realizing you are lost, and remembering the land marks you passed to get back in the right direction. Without realizing it, we pivot continuously throughout our daily lives, however we rarely apply that concept to our businesses.
On the flight home, I realized that many dealerships have never pivoted since they created their Internet operations. The management took (what they understood at the time to be) best practices, and utilized what resources they had available to build an Internet program. For some, it was round-robining the leads to the traditional sales staff. For others, it was creating an Internet Department. Yet others, thought a BDC would work best for them. From an outsider looking in, it looks like many dealerships ordered the Processus du Jour and are still suffering the from the indigestion.
Let’s eat something a little more digestible. We were all taught from a young age that plants need sun, soil, water, and air to grow. If that were really the case, we could take that free fruit basket that your lead provider sent you for Christmas, dump it out behind the employee parking lot, and grow a lush orchards of biblical proportions. If you’ve utterly failed at gardening like me, you understand that soil composition, species, climate, shade, moisture, insects, ground cover, nurturing, and many other elements play a critical role in the success or failure of a garden (luckily my wife loves to garden!). Simply taking seeds, and planting them in the soil is not enough. Sometimes a transplant will suffice, while other times, you have to till everything under, and wait for next year. Gardeners make hundreds of pivots every growing season to maximize the fruit of their labor (shameless pun), just like car dealers should be making hundred of pivots to maximize human resources, tools, customer service, and Internet market growth.
Operating a car business online is not a decision: It’s a commitment. You can’t just align your staff, create a department, throw the seeds in the backyard, and expect immediate success. You need to make mistakes to learn. You need to pivot when know you’re heading in the wrong direction. Just because it works for someone in your 20 Group, doesn’t mean an orange tree is going to grow in Wyoming. Make a commitment, fail fast, learn from your mistakes, and make the necessary decisions before it becomes too expensive, or worse, becomes too late.
Now go make your garden grow!
It used to be as a Dealer Principal or manager; you would consider yourself lucky to have a salesperson willing to make an outbound sales call, and even luckier still, if the sales person actually asked for an appointment. I have filled out hundreds and hundreds of Internet forms over the past year, and have noticed a new breed of salesperson. This eager, yet untrained, salesperson gladly picks up the phone, confidently dials a number and charges though that call with little or no knowledge of what the customer wants or needs. None of this matters to “Johnny-on-the-phone”, for he is in a race against himself towards an appointment. I am hearing untrained sales people very proudly and abruptly demanding an appointment within 20 seconds of the call. Believe it or not, I see salespeople do the same thing online. Being so bold as to ask for an appointment in an auto-responder. I have even see salespeople ask for an appointment at the end of every email exchanged regardless of the message of the email. It’s fine to focus on an appointment, but don’t charge through your opportunities and ask for an appointment without even addressing the customer’s needs. We appreciate the effort, “Johnny-on-the-phone”. We know you mean well, just… stop.
You need to be prepared to have an actual conversation, via phone or internet. The (again) untrained, but well-meaning salesperson knows this, and will use the weakest technique in the book: “Do you have any questions?” Of course they have questions, why else would they even bother to contact your dealership? Assume what those questions will be and be prepared to answer proactively. Face it… customers are already asking questions; you just might not realize it. They are clicking on buttons with labels like: “Request more info” “Get a Quote” or “Get Financed”. They are leaving comments about their needs. By making them repeat themselves, the customer may think you are playing “hard-to-get” with the information they are looking for, or they will simply think: “Wow. This dealership really isn’t listening.” The 5 little words, “Do you have any questions?” while well intended, can do more harm than good.
Developing rapport over the phone or internet is not easy, so take every opportunity to show the customer you are listening and make a good impression. Be more specific and lead into your questions: “I like the color of this one, what drew you to it?” Be ready and able to engage in an actual conversation about the vehicle by doing some research on it before you pick up the phone to make the call. You must be prepared to build some momentum over the phone and bring the customer to a place where they want to come in.
Having filled out hundreds of those Internet forms, I have had those 5 words thrown at me 75% of the time. My first response is usually: Well I already asked for a question… what’s the price?”. The untrained salesperson usually responds with” “My Internet manager didn’t tell me that.” or “That information wasn’t on there.” Both excuses are Bullshit. Get the information. It exists somewhere and it is up to you to hunt it down. Your contact management tool or Internet lead provider is the best place to start if you are not sure how to find it yourself. If you rely on another person to share contact information with you, make sure you ask the questions: “What form did this customer fill out? Were there any comments with it?” Put yourself in the customer’s shoes. We are in the information age after all, and you are the only one to blame if you are uninformed.
As the vilification train continues to carry-on full steam ahead (not going to mention the hated company du jur), I ask myself, why aren’t dealers looking at themselves in the mirror? No one holds a dealership at gunpoint to utilize their products. I know I rant about this a lot, but when are we, as an industry, going to take responsibility for our own actions? We research every facet of our business, yet don’t take the time to research the people we do business with. For an industry that practically invented selling, we get duped all of the time.
Instead of grabbing our torches and pitchforks every time an outside company wants to disrupt the car business, let’s instead think of all of the reasons companies want to replace automotive sales people (they regularly get outside funding to do this, for $#&@’s sake). Let’s reflect on why the general populace has such a skewed and negative prejudice towards the dealer community. Let’s stop thinking in terms of PVR and start thinking total lifetime value of a customer. Let’s lift ourselves up.
Whether we like it, or not, the world has changed. Pandora’s box is already open. We can’t go back. Let’s embrace the continuing change in buying habits (REMEMBER: Every minute, people gladly pay more not to shop at Walmart, eat at McDonalds, or drink Maxwell House). Let’s add value. Let’s earn our money. Let’s set a benchmark in reputation. Let’s take away all of the negative ammunition anyone can use against us (venture capital money, or not). Let’s stop being the victim.
The best days are ahead of us, friends. Are you going to be a driver or a passenger?
We have already established that communication via telephone is not the most natural form of communication. That being the case, I have heard hundreds of salespeople ask questions that have nothing to do with the task at hand (setting an appointment). Before you ask a customer a question over the phone, first ask yourself this: “Does the answer to this question get me any closer to an appointment?” Here are the top 5 questions NOT to ask an inbound sales call.
Your top sales people have spent their careers fine-tuning their selling skills. Since communicating over the phone is so unnatural for some, they simply default to the sales skills in which they have experienced success with. I hear them say a lot of things that would be best said on the showroom floor. They tend to steer the conversation into a place that is comfortable for them. I have noticed the skill set employed by these sales people seems to be the presentation of the vehicle. With a customer on the floor, giving a detailed vehicle presentation and demonstration would only make sense, after all it is one of the components that pave the way to a sale; That said, it’s pretty pointless over the phone. Reading a mundane list of features, or even worse, a build sheet, to someone over the phone is boring. Obviously, those details are far more impressive to see than to hear. I realize the vehicle description is not a question, but it’s still not something that is going to get you any closer to an appointment.
Generally, after a salesperson has read off a list of details, I hear them ask the customer: “Does this sound like something you would be interested in?” This leads me to the second pointless question: “Does this sound like something you are interested in? Considering the fact that 86% of people end up buying a vehicle other than the one they initially inquired about, the answer to this question isn’t going to make a difference as far as an appointment is concerned. On the showroom floor, the answer would lead to paperwork, and ultimately a sale. On the phone, it only leads to awkward silence.
Number three on the list of worst questions to ask a customer: “Is this going to be for you?” These days, it’s pretty common for a someone to employ a friend or family member to call a dealership and inquire about a vehicle on their behalf for any number of reasons. Mostly, because the potential buyer is afraid of; or is intimidated by, “car sales people”. Either way, the buyer, who has asked their Dad to call your dealership, has decided you need to sell Dad before you can sell them. So, untrained salespeople ask the caller this pointless question hoping for what? How do you plan to proceed with the conversation with a yes or no answer? Asking the caller if the vehicle is for them is not going to get the buyer on the showroom floor any faster or easier. When I hear a sales person ask this question, all I can think of is that they are afraid they may have to do more work. Guess what, it’s your job, so get to work! Assume the person on the phone is the buyer and sell the appointment. Sure, you may have to sell an entire extended family on an appointment before you get a chance to sell the buyer, but the one willing to go the extra mile will get the sale.
Number four on the list of Worst Questions is also a sign you have a lazy salesperson: asking about credit scores, or financial situations. It’s too soon! Let me set a scene for you. During a call, something is said that gives the salesperson the impression that the caller has poor or no credit. Something like: “I need a payment under $150 a month” or “Do I need a cosigner for that $129 a month lease I saw on TV?” Once the salesperson has used their magical mind reading skills and decides within 20 seconds that there is no way this caller could EVER buy a car, they set themselves to the task of talking the customer out of visiting the Dealership. There is no way on earth you can determine whether or not a person can buy a vehicle without that person in front of you on the showroom floor. Nor can you convince them to do anything such as borrow money for a down payment, or ask a friend or family member to cosign for them if there is no value built in the vehicle. If you have this potential customer in front of you, you can develop deeper rapport with them and advise the customer to go to any of these measures. The customer will also have more emotion for a particular vehicle once they have been given a full vehicle demonstration along with a demo ride. You need to have the attitude that you are going to sell a vehicle to every single caller, regardless of the potential obstacles you may have to overcome along the way. Most importantly, you can’t sell them anything unless you’re able to sell an appointment first.
Finally, topping off the list of the 5 worst questions to ask a phone up is: “When are you looking to buy this thing?” Asking this question is a great way to get a customer to put their guard up. It puts pressure on them and causes them to distrust you. Assume and proceed as if the caller is planning on buying today. If they are asking for a price on a new vehicle, quote them with the price of the car today, even if it is the last day of the month and you know incentives or finance rates are due to change tomorrow.
You should always have a reason as to why today is the best day to buy. The reason doesn’t necessarily have to pertain to price either. Perhaps you are having a big sale today, or your manager is in a FANTASTIC mood today, or you are giving away free oil changes today. There is an average of 30 days in a month, so try to come up with 30 reasons as to why today is the best day. This way, you also have a reason to follow up with a customer until they make a purchase. Keep yourself focused on an appointment on the phone, and save those great sales skills for the showroom floor.
Let’s say that you’ve had a persistent cough for two weeks, but haven’t had time to go to the doctor. You finally break down, and go to urgent care one night because you’re not getting any better. After waiting four hours, you finally get seen by a guy in his early twenties with acne still on his forehead. After going through some cursory checkups, he tells you that you have syphilis. He hands you a prescription slip with someone else’s name on it, and wishes you well. Given that you haven’t been to Bangkok lately, and that you’ve never cheated on your spouse in the thirteen years of your marriage, you decide that maybe you ought to get a second opinion.
If you’ve read some of our recent blog posts, you probably know that Joe Webb and I have gone off a bit on those who are new to consulting. Trust me when I say it’s not meant to personally attack anyone. Unlike the medical world, there is no certification, title, or otherwise, to indicate one’s level of expertise. In fact, there is no state licensing to make sure that you are sound to practice. There is no governing body who administers examinations, or confers expertise. Instead, we have resumes and word of mouth. That’s it folks.
Many of us in the dealer, consulting, and vendor world have spent a tremendous amount of time educating ourselves. Besides the obvious attendance at retail auto conferences, we sit in on webinars, read books, and some of us even take classes. While some were educated at the school of hard knocks, others learned (and survived) in active combat, and still others have excelled in postsecondary education. Because all we have to rely on is resumes and word of mouth, there is no way to distinguish those of us who have dedicated ourselves to mastering our craft, and those who haven’t. More specifically, there is no way to distinguish between those who are in it for a quick buck, and those who are in it because they care about the condition of retail auto.
Because there is no way to formally differentiate between the practicing experts and the self-proclaimed experts, the dealer loses. The dealer loses on beta-quality technology sold by a good salesperson. The dealer loses on vendor-driven training administered by people who have never sold a car before. Most of all dealers lose money on (one nefarious consultant after another) consultant who have nothing to offer other than their level of expertise. If the dealer loses, then everyone loses.
This is probably the same reason why so many vocations have adopted formal licensing. Think about all the professions that require passing an examination to practice. Everyone from physicians and attorneys to hairdressers and tattoo artists have to pass at least one administered exam. Why? Because someone who did not care about their practice (or reputation) swindled someone out of money, gave someone septicemia, burnt someone’s scalp, or gave some unsuspecting schmuck syphilis. Organizations were born to make sure you didn’t eat rancid meat, get electrocuted by your lamp, or use snake oil as a cure. Most commonly these organizations, laws, or entities evolve to make sure the consumer is protected.
As I commonly posit, why should we be any different? Why aren’t we working harder to create a governing body to allow those who want to become certified as experts take an examination to do so? I know individuals have tried to do so in the past, however this is bigger than one person. It’s time that we put our egos aside, and work together towards something for the greater good. I know there are many true professionals out there who would like to demonstrate their knowledge. I know many more who would seek the protection of an umbrella organization. We need to give them the opportunity to do so.
I’m not beginning to say that I have all the answers. What I can say is that if this organization is going to exist, it can’t be a club (the last thing we need is another Good ‘Ole Boy Network). It can’t be an offshoot of an existing organization, rooted in the traditional ways (old habits die hard). It can’t be formally sponsored (it’s already too hard to cut through the vendor noise). It can’t be easy to join (take a look at the requirements from the Project Management Institute or the CFA Institute). It can’t be governed by a few, because nobody has all of the answers.
The next time someone approaches you about how to improve your business, think of all the licensed and certified professionals you deal with on a regular basis. Think about the police officers you know, the teachers in your kids’ classrooms, the EMT that gave you CPR training, and the electrician who wired your garage. Think of all of the training they went through, and the continuing education they’ll have to go through. Then ask yourself: Don’t I deserve the same?
If you happened to study business in college, or are a corporate strategy junkie, you’ve probably heard of Michael Porter. If you haven’t heard of him, Porter is an esteemed Harvard Business School professor, served on Ronald Reagan’s Commission on Industrial Competitiveness, authored nearly 20 books (Amazon carries thirteen of them), and has published countless articles. Most would agree that Porter’s prophetic work has laid the foundation for the last 30 years of competitive strategy. I’d have a poster of him on our bedroom wall if my wife would let me. While Porter’s work has spawned numerous books, essays, and academic articles, I want to concentrate on one key piece: core competency.
Simply put, a company’s core competency is what only that company can do best. Ideally, this particular factor is not easily imitated by its competitors, and can be leveraged widely through many products, in many markets. For example, ADP was able to adapt its payroll technology it developed in the 50s for use in multiple industries, in multiple markets, and plays an integral roll (like it or not) in the car business. The better a company understands and develops its core competency, the more dominant position it will have in its market.
A lot of things happened long before you got into the car business. Slow, unreliable, cars made a dealership on every corner practical during the time franchise laws were written. An onslaught of foreign competition flooded the markets during the seventies because the domestic car business wasn’t prepared for rampant inflation and a decade of oil crises. The widespread suburban sprawl of the last twenty years has only paved the way for upstart competition that never existed across town. Oh, and that Internet “fad” happened, too. You can’t count on your location, your OEM, or having the most/newest/cheapest/bestest cars in town. In a 100-year-old business, it’s all been done before.
What hasn’t been done before? You.
You are an individual. You’ve collected years of rich life experiences that make you unique. Nobody can replicate you (scientifically, maybe, but not your personality), just like you can’t copy anyone else (unless you want to be known as a fraud). You are not the cheapest available option (and neither is Apple, Nike, Ducati, or John Deere, by the way). You have values, you add value, and people gravitate towards you because you possess certain qualities. Understanding these qualities not only allows you to transact with customers, but it will allow you to mentally connect with them, as well.
Many of us fall into the of trap copycatting. We feel that if we follow in the footsteps of someone we know, or a brand we admire, we can achieve the same success. How did Microsoft do with the Zune (you’ll never get that $200 back)? How’s IBM’s PC business working out for it (congrats, Lenovo)? How’s Buzz doing for Google (that buzz you hear is Twitter laughing)? Even the best companies can fall short when they fail to connect with the customer by straying too far from what they do best.
Let’s be honest with ourselves. It’s easy to read articles, attend webinars, attain OEM certifications, and comb through blog posts. Reading and retweeting the latest Seth Godin or Guy Kawasaki post only takes two clicks. Simply following the pack doesn’t create any hurtles for someone who just wants to copy you. In fact, it makes it much easier for them to follow. If everybody is following best practices, you aren’t creating any distinction to set yourself apart to the customer.
Instead, use best practices to create a foundation for you to build on. Understand the philosophy of the author or presenter. Frame it in the context of who they are, where they’re at, what they know, and more importantly, what they stand to gain. Now focus it through your lens. Apply it using your words, your emotions, your experiences, your research, to your customers, in your market. Measure your results (every variable you can think of, not just what’s required), and discover where you excel. Use these strengths as the bedrock on which to build your core competency.
Unfortunately, Michael Porter is too busy solving global issues (seriously) to turn his attention to the auto business. It doesn’t mean you can’t. Understand those qualities that your competition can’t emulate. Don’t count on someone else to carry you to success. Dedicate yourself to recognizing and measuring your strengths to feed your core competency. Be proud of what you do. Blaze a trail that no one can follow, create an unbreakable bond with your customers, and build a fortress that no one can knock down.
Initially, I intended on giving you all a day-by-day account of the sessions from the 2011 South by Southwest Interactive Conference. After going through four and a half days of notes, I realized one common thread linked all the presentations to together: to do. Not wait. Not over analyze. Not ask for permission. Just do. Nike was on to something.
Many of the panelists and presenters started with just an idea. Contrary to popular belief, they didn’t have access to tremendous amounts of capital. Not all of them were trust-funded super geniuses that went to Harvard or MIT. In fact, many acted, looked, and spoke just like you and me. The key difference is that they were willing to take an idea, and do what it took to get there. When they got there, they hired and inspired those around themselves to continue to take it to the next level.
Before those who embarked on their idea spent any money, they took the time to create a fundamental vision of what they were going to do. They made sure to think through every dimension of the space they were planning to enter. They reached out to others for mentorship. They wanted to understand how, and in what context, the end user was going to take advantage of the product or service. They weren’t worried about the technology or the mechanics because those would come along later. They focused on how the product or service would reach the customer, and how it would improve the customer’s life. For some, it took years. For others, it was a eureka! moment.
When that vision was crystallized, there was no hesitation to begin development. Prototypes were developed, tested, measured, and scrapped until the kinks were worked out. Failures do happen to even the very best. In fact, quick failures were considered a blessing. The results could be meticulously dissected so that the successes would be repeated, and mistakes would not be repeated. As development continued, testing left the developers, went to family and friends, then focus groups, and then the general public. The testing never stopped. The products and services continued to evolve to better serve the needs of the end user.
As many watched their ideas come to fruition, they never lost sight of who they were. They didn’t conform to the culture common in their line of work. They didn’t water down their personality, their ideas, or even their language. They were honest with their partners, coworkers, in their presentations, and in their writings. They were honest with themselves. That honesty reflects in their company’s brand, and what they do.
This is just a small piece of what I’ve taken away from the conference. Sharing more thoughts is some of what I am going to do. Giving my clients what they deserve is what I am going to do. Being a more effective teammate is something I am going to do. Making time for those important to me is something I am going to do. I’m going to act on a plan, and continue to move forward.
What are you going to do? Are you going to laugh this off as some feel-good excrement, or are you going to think about it? Are you going to push aside your ideas? Are you going to play it safe? Are you going to ignore that feeling in your gut? Are you going to go through the motions? Are you going to quit? Are you going to take the easy route? Are you going to keep lying to yourself and those around you? Or, are you going to do more?