Car sales and skin creams

One prompt for a business is to ask: where are my customers and what do they see? The answer and application leads to the Customer Acquisition Cost. The best businesses find creative answers and the answers aren’t always obvious. Where are Gen Z customers? TikTok and Target. But a beauty brand cannot sell in Target.

The Target problem for a natural beauty brand has to do with the second half of the question. Gen-Z-beauty-LC may be at Target, but so are a bunch of other products, mostly at cheaper prices. The customers compare brands and framing on price is powerful.

A good business then, finds customers and frames their value relative to what the customer sees.

In 1918 Ford’s market share was 50%. A dozen years later it was 25%. Oof. Competition. One innovation where Ford floundered was financing which Henry Ford considered reprehensible. But the innovation treadmill continues today. “There is so much competition,” in the auto market, said Carvana founder Ernie Garcia, “which leads to the need to be more creative to monetize the transaction.” Dealers don’t just make money selling cars.

Dealers began with: Where are your customers and what do they see? For auto dealers this happens on multiple levels. First regionally, dealerships have geographical footprints and internet homepages. At that level the customer communication has to be big and use framing (zero anything works well too).

Zoom in and the next level is the dealer lot. Here customers are captive, and unlike Gen-Z at Target, there’s no framing. Dealerships use financing, warranties, trade-in offers, and accessories to enhance their margin becuase it’s hard for customers to shop around. Amazingly it seems that even the medium of contracts affects sales.

There are multiple JTBD for new cars and skin screams. One is utility. Another, like Aviation magazine, is appearing cool (and these status games are okay). When car dealers use fat margin products they can ‘offer’ sticker discounts or trade-in boosts as visible and easy-to-understand wins for the consumer. Getting a good deal and sharing the story is a job to be done too.

Business is hard. Innovation and its competition are never ending but this is a good challenge. One way to face it is to ask, where are my customers and what do they see?

I did not follow my own advice – always buy two new cars – and bought a minivan. It wasn’t a blast. But I did sell my old car using Carvana and that was pretty good.

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