How to Identify Your Competitive Advantage

What makes you different from the competitors in your town? Do people want to go to your dealership or do they have to go to your dealership? 

In the tire and service business, selling products with pull abilities aren’t the only part of that equation. Sure there’s name recognition and the parts and tires have to perform to standards. But the majority of products you install on a customer’s vehicle aren’t even visible to them. “No one forms a line outside your dealership when the new whitewalls come out,” an old mentor once said to me. 

There will always be customers who demand a certain brand of motor oil, or some ask for a specific tire, and by all means, do what they ask. It’s an easy sale. But the majority of customers don’t even know the name of a part, let alone the function or brand. 

Don’t believe me? Go ahead and ask a random couple of customers what an oxygen sensor does. Customers don’t care about ohms and cycles. They care about the check engine light. Specific features of parts and tires sell a product to knowledgeable consumers — namely you, the owner of the tire dealership. They provide you with the confidence to present solutions to customers’ problems. Features are what a product is: an all-weather tire, an American-made wiper blade and brake pads that don’t squeak when new.  

It works like this. Customers come in with a complaint that their vehicle is not doing the same thing it was before: operating without problems — be it a light reminding them of an oil change, a low tire or a telltale audible or visual issue like a vibration or squeal. The customer doesn’t even know what the name of the thing is, let alone the procedure to rectify the problem. All they know is when they come into your place, it’s either going to be a battle or an intelligent conversation about how to make their vehicle “get back to normal.”

Don’t get me wrong. Competitive advantage in our industry does include parts and tires — to a degree. The majority of customers, however, are very open to using alternative brands because the real advantage is not the point-of-sale materials at your counter or in your showroom. Your reputation is your competitive advantage.

The power of trust 

It’s easy for people who work in a tire dealership every day — 350 days a year for a decade or more — to forget how terrifying getting a vehicle worked on really is. Customers’ vehicles are a yoke or lynchpin to their paycheck and enable daily family functionality. It’s how they make money and go places to spend it. You “borrowing” it for a few hours is stressful enough. Paying to get it back is frustrating enough. If getting it back doesn’t go smoothly — think of an argument or a failed proper repair — that can send some people over the edge. 

Let’s hope your reputation is based on more than simply installing products that work. Let’s hope it’s more than warrantying your work when something goes wrong. Your competitive advantage isn’t what you have in common with others in your field. It’s those things that make you different. One of your biggest hurdles in business is the fact that larger companies do the exact same work, often at a lower cost of goods. Everybody sells tires. Everybody changes oil or replaces brakes. That’s a feature of your business — not a benefit. Your business has to offer something more. In addition to a monetary exchange for features — the things you sell or do — a small business must offer extra. 

Some benefits can become expensive quickly. Shuttle service, for example, is a great idea if the customer works or lives near your dealership. But if you’re shuttling one or two customers in and out of a sprawling suburban bedroom community, you need to charge a fare. Doing it for free is not sustainable. Other tangible benefits like a comfortable showroom or quiet kids play space are nice touches, but your customers aren’t going to choose you over a competitor because you have those. The same goes for free coffee, bottles of water and popcorn. These are nice gestures and it isn’t wrong to offer them. They just aren’t competitive advantages.

Your competitive advantage, as a small business, is intangible. It’s not a thing. It’s a feeling. It’s the ability to provide assurance in moments of truth. A moment of truth is when a transaction needs a decision. It doesn’t have to be a major decision. A moment of truth is any moment where trust has consequence. It’s based on an accumulation of dialogue and all the previous moments of trust. Have you and your team followed through when a customer has placed his or her trust in you? Did you speak the truth and act on it? The moment of truth is the conversion of saying what you’re going to do and following through. That’s called commitment. This repeated process — truth, then action and then trust — builds relationships. 

This includes delivering bad news and the occasional “no” as a response. As a matter of fact, it’s well known that an honest “I’m sorry” is extraordinarily powerful. Admitting mistakes — along with attempting to fix the mess the mistake caused, not just refunding money — can often commit a customer to your business for life. More often than not, a business relationship is built on the trust generated by recovery from an initial error. And so can a well-placed and proper “no.” For example, it’s not against the rules for a customer to ask for a discount. It is against the rules to state a fair price for service to a customer and then offer a lower price later in the conversation. That destroys trust. Sure, you’ll get the sale — probably. The customer has the advantage now and your dealership is on terrible footing.  

This isn’t the worst part, though. The terrible footing has been created because the customer has learned that your first stated price was a lie and that with enough discomfort, your price is negotiable. How much trust can be built from a lie? Every future vehicle issue will become a hotbed of negotiation, with the customer angling for less dollars and an advisor trying to keep the conversation from lowering the price.

What’s your competitive advantage again?

Truth comes from spending time with the customer. And telling them the truth means you’ve already weighed the options. You’ve already spent time understanding what was going to be a pain point and you sought less expensive options — or more expensive but faster options — and have explained the trade-off or you’ve explained why you can’t offer the service at that price point. This can’t be a conversation that occurs during the presentation or the close. 

Truth, action and trust aren’t always about price. Committing to having the customer’s vehicle ready at a specific time is just a trust-builder. It also can turn into a trust-breaker if you can’t meet that commitment. Waiting for the customer to call to check in on the progress of a repair can be a trust-breaker, too.

Easy doesn’t equal convenient 

Some of your competitors may present cheaper prices or longer hours to try and make things easier for customers. But don’t confuse easy for convenience. Easy is something of little effort. Convenience is the quality of saving time, effort and energy. Convenience comes as a premium. Easy is a trade-off.

Customers who trust you do so based on the hard work you’ve put in — work that’s already been done and effort that’s already been invested. Customers listen to advisors they trust. They wait to pounce on those they don’t. They look for discrepancies. They measure every comment, because their expectations are already low.

Not every transaction carries the weight of the world. Sometimes a car is dropped off for an oil change or a set of new tires early in the day and it’s ready two hours before scheduled pick-up. When the customer comes in to pick up the car, there’s not a drop of oil inside the vehicle. They just see that the check oil light has turned off and there’s a new reminder sticker on the windshield. Maybe your technician puts a small bottle of water in the vehicle’s cup holder or a dryer sheet under the seat. These are all nice touches that build trust.

And sometimes, the customer knows to drop off their car off for that oil change early on a Saturday or Friday morning. Because they’ve had all three of their cars serviced at your dealership for five years and after getting to know your store’s manager, advisor and some of your techs, they know how busy it can get on that day. And since they have no other worries to deal with, they know the work will get done. Why? Because it always does. That’s how you know you’ve delivered successfully on those moments of truth. That’s when you know you have developed your own competitive advantage.