I founded RNR Tire Express (RNR) in 2000 with the objective to claim a spot in the tire and wheel marketplace as a Rent-to-Own (RTO) model, also sometimes referred to as “lease-purchase model.” I knew when first embarking on this business endeavor that there would be numerous tire and wheel stores competing against us, so everyone involved in getting RNR (then referred to as Rent-N-Roll) set up for success had to think about what was going to make the concept attractive to customers. We decided the RTO model would be the way to go.
What follows is a detailed account of how the RNR team was able to identify that particular model as our unique niche in the market, or our value proposition. Through that account and the insights gleaned over the course of decades operating in the industry, any growing business in this field, new or old, will be better positioned to determine what their value proposition is, too.
Serve, Not Service
“Serve, Not Service” is the motto that we’ve adopted, and it ultimately represents the foundation of our shop’s value proposition. It’s this philosophy that we’ve incorporated into the work we do not only in giving back to the community, but also in providing for our customer base. One of our differentiating factors is we’ll work with customers to set up no-hassle payment plans, which translates to a pay-as-you-go or a lease-purchase business model.
Ideally, a tire shop is a business that most customers will stick with for the majority of their driving experiences, even as their needs and budgets change over time. Like you, we want our customers to have as much flexibility as possible when evaluating what works best for them when obtaining high-quality tires and/or a set of custom wheels. And, in doing so, as much clarity as possible in what separates RNR from other such brands.
Your value proposition is extremely important, so much so that every customer engagement should start with it. Every sales call, every walk-in, every major and minor interaction on the job should include your value proposition. The difficulty starts when dealers confuse their mission or purpose with a value proposition. Your value proposition is simply a statement of what you do for customers that others don’t. It should be short and easy to explain what makes you different from the competition.
How RTO Works and Finding Your Value Proposition
In an NBC News article, the financial instability of Americans was put in the spotlight when the piece conveyed that nearly two-thirds of the population is unable to cover a $500 emergency expense. So how can expect everyday consumers to be able to afford a set of new tires, which can range from $500-1,000 or more? The RTO model creates demand because it provides an opportunity for those in underserved customer markets. Whether it’s because they don’t have the cash or their credit cards are maxed out, a lot of people may only be able to buy used tires, and therefore, need to get them replaced in a shorter amount of time compared to getting a new set. That creates a cycle of spending time and money replenishing them and never having a decent set. We feel an RTO model offers an obtainable supply to consumer demand.
Of course, various other styles of payment planning and consumer financing exist in the market, offering businesses a plethora of options when discerning possibilities that could seamlessly fit into their financial plan and business model. A word to the wise when doing so: the solution doesn’t necessarily have to be a payment method. It could be free add-ons (ie: road, hazard, warranty, etc.), select discounts, specialty perks and more. Any and all could establish itself as a worthwhile value proposition for your company, capable of aiding a team in building a loyal customer base.
For us, an RTO model provides a way for our shop to carve out our own niche, which helped us define our value proposition. In large part, that’s how any shop can find their own value proposition: finding that niche. Examine the industry for gaps in services to better understand what customers want but competitors have failed to offer.
Any innovative value proposition will naturally draw skepticism as to how it will be successful. The first step is building trust and making sure both the shop, its employees and the customer want to make the arrangement work, and what’s more, that everyone believes in the inherent value of the proposition.
When setting out on that journey, incorporate the views of your entire staff to ensure the final result isn’t only an operable proposition for the here and now but also a proposition with the morals and forethought to withstand the test of time. When your team participates in creating it, they tend to buy into the concept and adopt it in all of their customer interactions.
We created ours several years ago in a work session with all of our managers. We asked each attendee to write down the most important value they believed we offered customers. After everyone completed the task, they shared their thoughts with the group, and we ranked those values in order of importance. We spent the rest of the day coming to an agreement on which ones would end up in our official value proposition. It was a fun day, and everyone felt that they were helping us shape the beginning of what was to become our sales track.
When it comes to crafting your value proposition, it’s important to remember that you don’t have to reinvent the wheel. Far from it, actually. The great equalizer among most businesses lies in the fact that their customers tend to prefer simplicity and ease above all else. Yet, it’s that same simplicity that tends to make brands apprehensive and fail to do enough to set themselves apart from the crowd.
The lesson to learn here, when exploring the realm of possibilities for what your value proposition could be, is to keep an open mind and the solution simple. More often than not, that’ll lead a business in the right direction.Read More