You Don’t Need More Customers, You Need the Right Ones

When I was in graduate school, I also spent some time working for a Ford dealership, in the ecommerce department. Specifically, I was tasked with handling online sales for a particular group of products that Ford sold. We sold these products online via both our website, and through eBay. When I came on board, the manager basically handed the online sales off to me, and I was tasked with improving the numbers.

At this time, around 75-90% of the dealership’s online sales came from eBay auctions. Most of the products we sold we did not have on-site, we would purchase the products from a drop-shipper. Most of our competitors on eBay did the same thing.

I quickly discovered a big problem; Our competitors used the same drop-shipper we did, and they had a higher purchase volume. This meant they paid less for the same products that we sold. So it was pointless to try to compete on price. We would drop the price of an item in our eBay auctions, and our competitors would go a dollar lower.

So I started scrambling for ideas on how we could better compete. I began to do some googling trying to figure out how how customers decided who to buy from on eBay. Specifically, I wanted to see if there was already any content or reviews on the internet for both our dealership and our competitors. It was brand reputation monitoring years before social media.

While I didn’t really find anything about our dealership, I did discover multiple forums and message boards devoted to Ford customers. Many of these boards discussed products they were using or that they were considering buying.

A light bulb went off; What if we created an account and started interacting with these Ford customers? We could answer any questions they had about products, and also use it as a way to increase awareness for the products we were selling online on both eBay and our website.

I thought this was a great idea, and took it to my boss. His reaction was basically that he didn’t see the point, we needed to be selling to all customers, not just Ford owners.

But to me, it made perfect sense. This would give us a competitive advantage versus other sellers on eBay, who worked for generic companies that had no ties to any automaker. The way I saw it, being a Ford dealership was something we needed to focus on, not run from.

So in the spirit of it being better to ask for forgiveness rather than permission, I began to alter our branding strategy. In our eBay listings, I played up the fact that we were a Ford dealership. I changed listings that would previously have a ‘works for all makes and models’ approach, to highlight the Ford vehicles that the item would work with. This item went from working on all trucks, to working on all trucks, especially Ford trucks like the F-150.

I also promoted the fact that we had a separate website where customers could shop for more Ford products. This change in strategy had an immediate impact. Over the next few months, online sales increased by almost 50%. Additionally, we began to see more sales for Ford products from our website. This was a welcome change, because it meant we could sell the same or similar items as what was sold on eBay, but by selling it on our own website, we avoided eBay’s seller fees.

All of this goes to show that having the right customers is better than having more customers. My boss thought we needed more customers. Getting more customers would have meant continuing a price war with competitors that had higher profit margins than we did. So we could never win. Our advantage was that we could appeal to Ford customers, better than our competitors could. Ford customers were the RIGHT customers for us, and the increase in sales is testament to this approach.