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Last month's column reported on the lack of impending novel solutions and cutting-edge opportunities. There appeared to be nothing more original afoot than the dusting off of old campaigns while the wait for a big solution to appear. It felt, to me, a lot like fishing in murky water where until you identify which baits are you cast whatever worked last. After a few unsuccessful casts, however, the

Last month's column reported on the lack of impending novel solutions and cutting-edge opportunities. There appeared to be nothing more original afoot than the dusting off of old campaigns while the “players” wait for a big solution to appear.

It felt, to me, a lot like fishing in murky water where until you identify which baits are “killer,” you cast whatever worked last.

After a few unsuccessful casts, however, the seasoned fishermen stop splashing around and start fishing for advice from anyone who's even seen a fish.

That's exactly what I was planning while heading down to New Orleans to fish the 2002 NADA convention (figuratively speaking of course). What follows are a collection of fish stories from those claiming to have an idea of where the big one's are hiding.

My starting point was weeks before I headed to the convention. I began by calling a few vendors to meet over lunch. Vendors always love to “do lunch.” Heck, most of them even pay for lunch and thank you for the opportunity to get an uninterrupted hour with you.

After all, most of their lives are consumed with scheming on how to get just five minutes of your time, now you're calling them.

Anyway, like I said, my first step was to entertain vendors, listen to their pitches and poke at who in the world was their favorite customer (code for “who is using your stuff successfully to sell cars?”).

Most vendors love to tell you how your most hated competition is hauling in barrels of profit by utilizing their products.

They'll cite facts and figures on which of their salespeople are most successful, and recount almost verbatim what's being said and how much charged.

Inside of an hour you can have a complete marketing analysis of who's selling which cars and how they're doing it. You might even pick up a few leads on some worthwhile staff and a prospect or two for your corporate or fleet sales departments. I've even identified whole dealerships for sale this way. But that's another story.

“The style package”

One of the hot tips I got this go-around involved something called “the style package.”

This idea was explained to me like this: Suppose a shopper wants a certain 4×4 model with leather and a sunroof. Ordinarily, you immediately count the selling point at $25,000 or more because only the “limited” edition K package offers leather.

So you start qualifying the customer's appetite for monthly payment versus down payment and quickly learn they have insufficient budget for either. What do you do?

Your first step is to give away your profit margin. After all, a moved unit still has finance potential and a trade and then there's the lifetime value of the customer and all that.

But, once you're through all your profit and then some, you are done. Right? Wrong! This vendor tells me that my competition has a different angle. Before he gives up his profit, he shows the customer a lesser version of the Ute with the “Limited” style package.

That's code for aftermarket leather and sunroof — cost about $1,525. Add the style package to the cost of a base model SUV and you might just have $4,000 to $8,000 to play with while still offering the customer the body series they came in for and the options (leather and sunroof) that they fell in love with.

Sure, they'll sacrifice whatever else came with the real “Limited” edition. But, chances are, after reviewing the give-backs versus the savings, they'll prefer staying in budget to paying thousands for some cladding, fancy wheels and car jewelry (the emblems and decals announcing you've paid more for yours).

What do you do if the style package is still too high? Before you give up all the gross, try offering a special program, a nearly new brass hat model with the “Limited” style package.

Conclusion, next time your salesperson comes to the desk with an “unbelievable deal from that scoundrel dealer up the street” don't assume that the customer is a liar or that your competition is low-balling. You might be up against a style package. Run the VIN.

Winning e-dealers

A walk around the floor at NADA and a lunch with my manufacturer's district manager yielded another point of interest. Today's winners in e-commerce are not necessarily dealers linked to the third-party lead generators nor are they OEMs looking to sell direct. Big change. Really BIG!

If you are making money with e-strategies today, you are most likely enabling consumers to more easily buy products and services through historical channels rather than through new-age virtual ones.

Said another way, it's unlikely you're still behaving as if cyber space were the retail highway and everywhere else were just a back-woods dirt road.

New millennium buyers seek information to distinguish between “brand” hype and unique content before taking advantage of manufacturer overcapacity and redundancy in the marketplace.

The Internet is the tool of choice for such research and successful marketing today understands how to leverage this. This shows up in the intense interest surfer shoppers show in side-by-side comparisons of products to make buying decisions. Gone are the days where a brand logo was “the” way to figure out who had the best stuff.

The really cutting-edge companies today are beginning to exploit consumer interest in expanding the definition of “products” from simply vehicle-related items to a broader list.

This is not simply hanging your trusted name on someone else's stuff like offering a Harley Davidson clock radio or Mont Blanc underwear. Winners in this category are profiling their customers and tailoring offers that are personal and compelling on products whose common threads are found in the customer's lifestyle rather than the product's specifications.

As this trend builds we'll see more strategic alliances between great manufacturers of dissimilar products that are tied to the lifestyle of the consumer.

The result is that the consumer spends less time searching for products they want, and manufacturers share the support staff and marketing costs associated with building relationships with those customers.

Coming soon will be sporting goods at a Jeep dealership, child educational toys offered with a mini-van or golf clubs with your Cadillac. More significant will be that the offers will be personalized and only sent after, that's right, after your profile suggests that you have an interest. Less spam, less wasted marketing dollars. Talk about customer-centric rather than product-centric marketing!!

“Get-me-done” customer

My advertising agent and several of the account mangers from local TV and radio stations brought me another source of opportunity. Their take on the moment was that volume retailers are cutting through the clutter by targeting customers with challenged credit rather than those with a specific product in mind.

Simply stated, go after the “get-me-done” customer rather than the high credit score “give-me-a-discount” customer.

The former is a recent model-year used-car buyer who will accept a great book car. A great book car, as every successful dealer knows, is one that has dropped in value faster in your market than the appraisal guides and residual guides have predicted.

The opportunity lies in funding the deal through a bank that will view the spread as additional equity in the deal (i.e. more GP). Nuff said.

Be a lean machine

Before parting, I'll cast a little light on the cost-cutting side of the equation of making a profit during this recession.

A couple of years ago, there was a real fear on the part of the old guard that something cataclysmic was afoot. That passion enabled huge budgets and fast-paced development strategies. Many dealers were swept up in the momentum and many beefed up their staff and technology budgets to accommodate the changes.

Today, many of those dealers are still shouldering the burden of those swollen payrolls and technology contracts. According to most of the dealers that I speak with, the volumes and revenues from those initiatives no longer justify the expense to reel in those deals.

Smart dealers have already shed the weight, others are doing so as we speak. Those who just grin and bear do so with a meaningful competitive disadvantage.

A brave new world

Lastly, since this article is a rambling of “this and that” I'll leave you with a bit of ancient philosophy. Many arrive at the doorstep of opportunity with an enthusiasm that rivals the delight of a child catching his first fish. Few understand just how predictable the future of that child is based simply on how that fish was caught.

I have worked with manufacturers for many years now. Most of their projects have been so hushhush that in their beginnings I've had to sign legal documents swearing me to secrecy lest they engage the courts to imprison and quiet me.

Looking back on our paths and results, it is laughable that there was often more passion about risks that we must not take, than about what we might have done to succeed.

It occurs to me now that our first couple of steps set the pace for where we would go and what was to happen.

With this same clarity I have put several projects under the microscope and have now drawn the conclusion that on each occasion we might have predicted success or failure within the first few steps of our process had we looked to do so.

It's as Sun Tsu wrote many centuries ago, every battle is won and lost before its first scrimmage and can be predicted simply by assessing the preparedness for victory of the participants. Those who look on the horizon for enemies, most often find them. Those who see a brave new world, create one.

Peter Brandow is a 25-year veteran dealer with stores in Pennsylvania and New Jersey. He is president and CEO of Brandow Companies.

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