Strategy: Using Web to Raise Commodity Margins

Who would have thought that the Automotive industry would have so much to teach channel executives in Hi-Tech. First a great Forbes article on The Lexus Dealer Channel and now another great article on Mazda from Business 2.0.

Mazda is a great case study of a vendor going beyond lip service to impact dealer profitability. Common wisdom was that the internet made more knowledgeable customers thereby increasing competition on price and lowering margins. Mazda redesigned its showrooms to feature the internet and it trained its sales force to talk to customers about the data they found. This accomplishes several important things for the channel:

1. Keeps the customer in the showroom
2. Changes the conversation away from price to user needs
3. Increases margins by enabling add on service contract sales
4. Makes the experience more enjoyable
5. Makes the channel more willing to invest in infrastructure

How are you using the "destroying" trends (such as instant price shopping on the net) to grow a new and healthier business?

The best way to build loyalty is to build in profitability into your programs and channels.
Scott Karren, The Channel Pro

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