Taking on the Big Boys – Differentiation Part 1

How can independent agents compete for and win business from the “Big Box” F&I providers? Before I provide my thoughts on the subject, let me start out with a definition of “Big Box” F&I provider. For the purpose of the articles I am writing, I’m referring to the large, well established, direct employee providers in our industry. They would be the Goliath in the biblical tale of David and Goliath. Actually, the story of David and Goliath provides a good backdrop to the situation a lot of high quality independent agents’ face on a day-to-day basis. Much like David, the odds look horribly stacked against you. The competition is much bigger than you, financially stronger than you, and has been terrorizing the townspeople for years. Yet, in order to survive, you (like David) have to believe in yourself; you have to defy the odds and you have to take the giant down, but how? Over the next few issues, I’d like to share some of the things I’ve learned over the past 28 years in the sole hope that it will help you elevate your game.

In order to win new business, you need to be able to describe your value proposition (more about that in future articles) in a clear, concise, and compelling manner to prospect dealers. Before you can do that however, you need to determine who you’re going to be. Whether you’re a part of a full service agency or on your own, you need to determine your sweet spot. In other words, where you think you’ll have the greatest competitive advantage. An agent’s sweet spot may be as individual as his/her fingerprints, but it’s an essential element for success. When determining your sweet spot, you need to be honest with yourself and realistic with your expectations.

What are you good at? Can you work with underperforming F&I departments, raise the PVR and improve product penetrations? Do you remain current on the legal climate and how Dodd-Frank and the CFPB are likely to impact dealers today? Are you an authority on reinsurance and wealth-building strategies for dealers? Do you have the manpower to service a multi-store dealer group? Do you have the cheapest product on the street? Do you have something unique and different? These are just a few of the questions you need to ask yourself, and remember, when answering, be honest with yourself.

Next, take a look at the providers you represent. Are your offerings better suited for franchise stores or independents? Do you have an advantage with domestics or imports? Is there a particular make that gives you an edge?

How well do you know the competition? Whenever you attempt to unseat an incumbent, you need to know what you’re up against. Why did the dealer choose them in the first place? How long have they been working together? Who has the important relationships? How good are you at introducing doubt in the mind of the decision maker?

These are just a few thought-starters for you. Once you know who you are and what your ideal prospect looks like, then you can move to the next step, which is segmenting your market. Market segmentation involves looking at the opportunities in your marketing area, and then comparing them to the list of attributes that best align with your sweet spot. This step allows you to prioritize your acquisition activities and better leverage your strengths.