Q&A with Greg Heichelbech, CEO, Triumph Motorcycles (America)
Dealers at the annual Triumph dealer meeting got a first look at the new Trophy, in addition to the Daytona and Street Triple. With about 50 U.S. dealers selling well over 100 new bikes and close to 200 annually, Triumph booked another solid growth year in 2012. There was a time when one dealer would lead the pack with 200 unit sales annually, and most in the 35-45 bike range. With 75 percent of its dealers moving more than 50 units per year, the brand is on the rise as its dealer footprint has grown to 215, up from 165 in 2010. Read the entire Q&A in on PowersportsBusiness.com.
Your recent dealer meeting held at Barber Motorsports Park in Birmingham, Ala., got a lot of positive feedback from dealers. Why was it such a successful event?
“We’ve been working on the brand and the positioning of the brand quite a bit, not only in the marketplace, but with our dealer body. Part of the strategy of that was not only partnering with the AMA and M1, but in particular, Barber Motorsports. Through that association we were able to sponsor the Superbike Classic and the Vintage Motorcycle Festival. That was important to us because we wanted to use that vintage festival as a launching pad for our dealer conference, which immediately followed it. The Vintage Festival is heavily weighted with Triumph customers and Triumph motorcycles, and the park itself does so much to help position our brand in the market. The Barber facility and museum are gorgeous and present Triumph as a premium brand.”
Dealers raved to us about the amount of riding they were able to do at a dealer meeting. How important was that aspect of the meeting?
“If it’s not the best track in the country, it’s got to be in the top three, and we’ve already booked our dealer meetings their for the next two years, and hopefully we’ll be there even longer. The dealers work so hard, and sometimes they forget why they got into the business. They just don’t have the opportunity to enjoy it. We wanted to give something back to them as our way of saying thank you. That venue gave us the opportunity to have a business meeting and ride bikes. We let them bring their own bike on the track if they wanted to also. They could ride on the countryside of Alabama on the Thunderbirds and the Rocket; we had an adventure ride on the Tiger Explorer and Tiger on the Barber property; and of course the track rides.”
We talked to a lot of dealers who were appreciative of the amount of riding they were able to get in.
That’s what we were hoping for. I went and rode with them, and it was great to be able to develop a bond that way. A lot of them had not been riding for the pure joy of it — not being associated with work — for a while, let alone being on track. Some dealers do race themselves, of course. But other dealers were telling me they sell these products but they haven’t been on one in a while.
What did 2012 look like, and what can dealers expect to see in 2013?
“The main thing we wanted to show them from 2012 were the changes we made not only in programs, but in margin, staff and internal processes. We were fortunate enough that with the help of the dealer, everything pointed in the up direction, because we’ve really been focused on their profitability the last two years. As for 2013, the pipeline is full for new product. But what we can share is that over the next 24 months, there’s well over 15 products that are either going to be refined or new. There’s plenty of new product coming in the pipeline, and [Triumph Motorcycles owner] Mr. [John] Bloor is investing heavily in the business like he always has. We told the dealers we need you to push the brand and put Triumph as your No. 1 brand because we see a great opportunity in 2013 as well.”
A lot of dealers may not know that you launched an especially progressive and innovative ecommerce site last month for your North American dealers. What drove the decision to develop an OEM-based ecomm site that dealers can benefit from simply by providing a link button on their own dealership’s site?
“We launched it on Black Friday in partnership with Bridgeline Digital and UPS. It allows all of our dealers to get into ecommerce without the investment of doing it themselves, so yes, it’s dramatically different than what’s out there. We moved our warehousing over to UPS last summer. We closed our warehouse in Newnan, Ga., and moved it to Elizabethtown, Ky. As part of the package they have the technology for us to overlay an ecomm site for our dealers. We created a model where the dealer doesn’t have to do anything but collect a check each month based on the ecomm sales. When a customer goes to a dealer’s site and clicks onto the ecomm button, it pegs that dealership as the selling dealer, and if you go to it from the Triumph site, you can select your local dealer.”
And it sounds like dealers will be able to capitalize on some of the 600-700 million customers that use Amazon, right?
We’ll also be adding a feature so that people shopping on Amazon will be able to directly link to our ecomm site, and those people, based on their ZIP code, will be assigned their nearest dealer. The dealer doesn’t have to inventory anything or do anything but collect a check. UPS handles everything and we send the dealer the retail profits. Our job is to wholesale, not retail, and in this case it was easy to leverage across all 200 dealers, so we took advantage of it. Dealers do have to sign up for it, and there are some dealers who have decided not to participate. Ecomm costs money no matter who does it. We give them margin minus cost, and they’ll make more money doing it with us than they would doing it their own. It’s a win-win for all of us.
How did you decide to contract out your warehousing to a third party provider?
Myself and the management team were troubleshooting our business, and we looked at some of the hot areas. One area that’s not our core competency is warehousing. So we asked, “Why are we in it?” To be the best in class we’re not going to get there doing it ourselves. We looked at the volume we wanted to generate over the next couple of years, and we said we would either need to invest extremely heavily in warehousing in terms of infrastructure and IT and staffing, or find a partner who does it best. It’s not our core and we don’t want it to be our core. Our core is supporting the retailer and the customer.
How is you dealer landscape shaping up?
This year in particular is for recruiting new dealers. There are spots that are open that do not have a Triumph dealer that we’re filling. Those are our first priority. We’re looking for the No. 1 dealer in every market that has the same philosophy that we have. We have our regional managers out there talking to dealers. We’ve been signing about 25-30 dealers per year, and this year through June we’ll have signed 50 new dealers.
How much more growth do your foresee at the dealership level?
We want to grow a dealer body that’s between 250-300. We think that’s all we need to service the entire U.S. If we have the best dealers and those are the best dealers in those markets, we believe our opportunity is unlimited.
Any other message that you’d like to let our readers know about?
We’re having fun. For whatever reason, that fun has been taken out of the business.