By Neil Pascale
DENVER — More than 400 people from the powersports industry, including representatives from 120 dealers from across the nation, were given a different perspective of 2007.
During the past year, the U.S. industry suffered more than a 10 percent decline in new unit sales and saw approximately 1,000 dealerships shut their doors, statistics cited by RPM Group President Sam Dantzler during his keynote speech for the company’s annual Update event.
Dantzler believes the high attrition rate — in contrast the previous three years saw roughly 1,200 new franchise dealers open — is largely a result of those dealers’ penchant for selling new units by discounting prices rather than promoting the inherent excitement the products produce.
“You cannot win if you’re only going to sell on a price tag, especially in this kind of market,” Dantzler said, noting long-term dealer profitability cannot be achieved, much less grown, by counting on volume.
And that message — not to mention how to achieve that — was echoed during the three-day event in Denver that packed more than 30 seminars focusing on a dealership’s profit centers.
“Treat this like an opportunity,” Dantzler said of the number of dealership closures. “Don’t look at this as a down market.”
In fact, Dantzler said there is plenty of room for internal revenue and gross profit growth among metric and Harley-Davidson dealerships. He cited statistics from the company’s 300-plus member dealerships that showed store traffic up — 45 percent more for metric, 24 percent more for Harley dealers — but overall net profit down (metric 16 percent, Harley 2 percent).
“We have more people coming in the door, but we’re doing less with them,” Dantzler said. “You don’t have to spend more money to get more people in the door, you just have to pay attention” to those who are walking into the store.
Part of that additional attention requires dealer principals to ensure their staff is prepared to handle them.
“There are dealers who believe in trial by fire and there are those who want to prep their team leaders to be the best they can possibly be,” Dantzler said of the importance of staff training.
“If you have somebody who wants to be trained, training always works. So if you’re training your staff and they’re just not getting it, you might want to ask yourself who you have” in those key positions.
Opportunities lie elsewhere in the dealership, Dantzler said, pointing specifically at female riders, which could represent up to 20 percent of sales in the PG&A department, if not higher.
“Where are you steering them in your dealership?” he asked. “Do you have a place for them to go? Do you have a dedicated retail section (for women)?”
Questions also surround the current economy and its influence on the industry. That was an issue addressed by Jimmy Atkinson, a vice president of Assurant Solutions, the company that purchased RPM Group last spring.
Atkinson noted even if the expected challenges in 2008 bring about another 10 percent decrease in new unit sales, the collective industry would still sell close to 1.5 million units in 2008.
“So it’s really not are we going to sell?” Atkinson said during the event’s keynote presentation. “It’s just who’s going to get the sale — your store or somebody’s else? Will your salesperson get the commission or somebody else’s salesperson get the commission?”
Both Atkinson and Dantzler spoke of a simple approach at ensuring a better year in 2008: a “one more” goal. In other words, achieving dealership revenue and gross profit growth by doing one better than last year, whether it’s selling one more line item on a PG&A ticket or one more new unit per month.
The latter concept in a dealership that has 10 salespeople could result in 120 additional unit sales per year, a potential gain of a couple hundred thousand dollars in gross margin.
“The ‘one more’ theme can go to every department of your store,” Atkinson said.
Copyright 2008 Powersports Business