Government cuts have created doubt in the minds of many businesses and consumers, but reducing your prices is not always the answer.
Government cuts have undoubtedly been at the forefront of dealers’ minds since the raise in VAT from 17.5% to 20% was announced, along with other spending cuts that will undoubtedly be painful for many consumers, and in this case when searching for the best vehicles and the best car loans. Since 2008 when the recession dawned upon us, many businesses have reacted by adopting a price led structure whereby to get customers in the door, discounts and price promotions are offered so that the most suitable cars and loans are offered to gain competitive advantage.
Consider how this affects the long term productivity of a business. Discounts may see a rise in sales now, but this can have an effect on your brand in the future. If customers perceive you as a low cost provider in the vehicles you sell then over time your brand can become devalued. Given this, it is extremely difficult to raise prices again as consumers simply won’t pay it.
If your business bases its selling point around being a low cost provider however, then you have already accepted that your prices will always be low; but if your business sells quality goods in a quality environment then lowering prices to overcome the recession can cause long term damage.
Consider other strategies that are not price orientated. For example, improving customer experiences and understanding exactly what your customers want can be a better model for the future of your business. In many cases customer experiences play a larger role in sales success than the actual product being sold, so it is no longer about offering the lowest cost car of finance but rather about what you can do to make the process easier for your customers. If you can make a customer feel special and secure then you are more likely to add value to your business in the long term and generate sales, and your customers will walk away feeling positive about their experiences with you. Above all, innovation is a success driver. Continuously consider new ways to create a customer experience that makes you stand out from the crowd, and a means for customers to remember you. During a recession, only the best survive. To help you bring innovation to your dealership, Carlyle Finance have created a link for you to use on your website to help make the customer experience easier and more special, giving them all the information they need, helping them decide the best car financing option for them. Take a look at the site at .