By Neil Pascale
HINCKLEY, England — Triumph is seeking to accelerate the growth of its North American dealer network, a move being driven by expected heightened consumer demand but also being limited somewhat by an in-depth internal review process.
The company is seeking to grow its North American dealer network 28 percent over the next three years to 250. However, company officials stress any dealer buildup will only occur at points that do not result in a split of existing dealer sales and only after an extensive review of the potential dealer.
That review, what North American CEO Mark Kennedy calls a 10-step process, has kept the dealer additions to just a handful in the past six months, although another 10-12 potential candidates are currently going through the review.
“It’s a slow process,” Triumph Commercial Director Tue Mantoni said of dealer development. “We could go out tomorrow and sign up 50 new dealers.”
“We could,” Kennedy said. “We have more than that that are knocking on the door that want to be dealers.”
What is Triumph looking for from potential dealers?
“We want to see a strong business plan, a strong financial plan, a good team, a team that understands Triumph and has some vision for how they are going to build their business up,” Mantoni said, adding, “and therefore it takes time.”
It also will take a sizeable commitment from a dealer, as Triumph requires candidates to consider the iconic English brand to be the No. 1 or No. 2 brand in their dealership in terms of focus and showroom presence.
So if a multibrand dealer expresses interest, Triumph will look for the following:
• Does the dealer have sufficient floor space and staffing, especially in the service department? Kennedy says if a dealer is interested in taking on Triumph and the extra 60-80 bikes per year, if not more, “there are probably (an additional) one or two techs required there.”
• Does the dealer have the financials to support an additional brand?
• Will the dealer install the company’s floor design, a requirement for all new Triumph dealers that includes lighting, logos, signage, retail racks and more?
“It’s just very important to keep the one vision, which in order to be successful we need to provide outstanding experiences for the customer,” Mantoni said. “We can only do that if the dealer has sufficient time, people dedicated, space dedicated, attention dedicated to the brand.”
The retail floor design is a requirement Triumph has had for the past three years and extends globally. This year, the company will have 70 stores worldwide, including an expected 30 in the U.S., that showcase the Triumph floor design.
“We’re doing all of this work to create the aspiration for the Triumph purchase,” Kennedy said. “When a customer walks in, his expectation has already been set to a certain level. If he walks in and he can’t find the product or the brand, he’s certainly disappointed. So one aspect is you walk in, you see the Triumph logos and the Triumph product and you feel the experience is continued from that consideration stage into now purchase. That’s a big part of store design.”
What can potential dealers expect in return?
Mantoni and Kennedy point to several items:
• Dealer training: The OEM has financed regional training in the U.S. for sales, customer service and is now looking at service department profitability. “Dealer development for us has been extremely costly,” Mantoni said. “It’s been a huge investment, but we can see it paying off. And for the long term, it’s definitely the right thing to do.”
• Dependability: The company has been profitable for the past three years and is owned by English businessman John Bloor, who also owns what Mantoni refers to as a “financially extremely solid” home building company.
• Investment: Over the next three years, company officials say they will spend approximately $130 million in capital and R&D expenditures to reach their volume targets.
• Design: The company has 135-140 engineers working in its R&D department, which company officials believe to be the largest such department outside of Japan.
“I’m sure if we were owned by some private equity company they would say from day one, ‘Cut that in half, at least’ because it’s very expensive,” Mantoni said of Triumph’s R&D department. “But we believe it’s very important for us for the future.
“It’s important for the dealers because it generates a lot of floor traffic into the dealerships. And it’s important for the enthusiasm of the company. Everyone in Triumph loves new models, and if you have two or three new models coming out every year, it just generates a tremendous momentum in the business for driving things forward.”
Copyright 2008 Powersports Business