Dealer auction a first step to loyalty

Renegade Harley-Davidson builds customer base by hosting auction

Kate Ribar got a lesson in planning when she decided to hold a used motorcycle auction to reduce inventory earlier this year at Renegade Harley-Davidson in Alexandria, La. As the store’s longtime successful operations manager/GM, Ribar has guided the dealership through a range of successful events, but the first auction in the store’s history was unique in a lot of ways. For starters, it was sizable, day-long affair, with 120 bikes staged.

Ribar recently shared her auction insights with Powersports Business Editor in Chief Dave McMahon. Just like they were in 2013, dealers will always be invited to bid at Renegade Harley-Davidson auctions. So yes, this was the dealership’s first auction, and yes, there will be another, Ribar says.

PSB: When I first saw that you were doing an auction at your dealership, my initial reaction was ‘What?’ So what made you decide to have an auction at your dealership?

KR: I had been wanting to do it for about five years. I had read an article about Barbara Bonnette’s auction company, and how she won the No. 1 auctioneer in the world. I mean, who doesn’t like to go to an auction? So I knew it would be fun with her as the auctioneer. But as I got to thinking, I knew it would be a lot of behind-the-scenes work and loopholes that we would need to be aware of.

PSB: Was there anything the spurred your idea to move forward with the auction?

KR: I was at a 20 Group meeting, and we were going around the room at the end of the meeting trying to find out who had the next big idea. So I said ‘I’m going to do an auction,’ and I stuck to it.

PSB: What was the outcome of the auction? Were you satisfied with the results?

KR: The auction itself went really good. We sold 55 bikes and had several hundred people in attendance, at the store and online. About 50 percent of the sales were from the Internet, and the rest were here on site.

PSB: Were you looking at the auction to be a revenue generator, or lead generator? Both?

KR: Well, we did lose money on a few bikes, but at that time of year [August], you’re going to take a loss at auction. I’d rather sell them to a customer and make a future conversion and have the customer at least start to build that loyalty with us.

PSB: Cajun Harley-Davidson in Scott, La., followed your lead in October with an auction of its own, also the first time that dealership had ever done it. What are you hearing from other dealers who might want to try do their own auction?

KR: Another dealership from the East Coast called me and they want to do one. A few other people have tried to do them, but I’m not sure they’ve been successful. It’s about three full months to get it together. People say, ‘Wow, Kate, what did you have to do?’ And it’s a lot. You just have to keep finding ways to prime the consumer for it. I sent out direct mail. I peppered the Internet with it. I bought extra clicks so people would navigate to our site. I had it on our site well in advance. I paired our website with Bonnette auctions, who did the auction. I had a list of the motorcycles with videos and descriptions. If you’re going to do it and take 20-30 days to put it together, I think it’ll be a half-assed job, that’s my opinion.

PSB: What were some of the details you had to take care of in the early going?

KR: The first two months I took to make sure everything was on the up and up with the Motor Company, and with the Louisiana Motor Vehicle Commission. No dealership in the state had ever done anything like this, so they kept thinking we needed to be an auction company in order to do it. But we worked our way through it. One thing I did have to do was run all marketing and advertising materials through them for approval. They don’t necessarily look at life through a retailer or consumer’s point of view.

PSB: What kind of financing arrangements did you have?

KR: We had a weeklong preview, and if you came to the preview we could get people pre-qualified with Harley-Davidson Financial Services. So because of that, we had a lot of foot traffic coming in to be pre-qualified. We gave them a certificate stating that they were pre-qualified, although we couldn’t state specifically what they were prequalified for.

PSB: How did you take care of those who were attending an auction for the first time?

KR: They all came to get their bidder’s number, and we basically taught people on the spot what to expect if they were a first-time attendee. Some bikes failed to meet minimum, and others were selling for $18,000, $16,500, $13,000. We sold some great motorcycles. Some models were absolute sales, others had a reserve. Some were sold as-is.

PSB: In looking at lead generation, how many leads did you capture from the event, both online and at the event?

KR: We added 300 leads. Again, we didn’t make a lot of money on these bikes. Our goal was to create space for the 2014 models. We could have gone through other avenues and lost money on them. Instead, we converted customers. The leads have all been added to the CRM, and we recently did a call campaign where we learned more about those who attended. One customer was in for the auction but didn’t see what they wanted, so now that turns into us finding something for him that he does want. So yes, we’re still seeing residuals from the auction.

PSB: Looking back, and ahead, are you planning to do another auction?

KR: I do think I’ll do it again, yes, I do. I also think I’ll do it at a different time of the year. It happened to be 103 degrees that day, so at the last minute, I had more huge fans ordered for our un-air-conditioned warehouse. But yeah, I would do it again.

PSB: How would you sum up it overall?

KR: It was really successful and lot of fun. More than anything it was something different and it gave us exposure. I think sometimes you have to forego a little bit of money to know that … would you rather sell the bikes back into our industry which gains you nothing or would you rather sell them to customers? That was the whole premise behind it. I’d rather give the opportunity to a customer. I’d rather have them swing into my door and with boots on the ground in here, buying incidental things. We were very busy over the two days of the preview and the auction itself. Our other departments had sales those days. It was a very, very good two days.

PSB: You guys are partners with four other dealerships. What type of interplay could that lead to with future auctions?

KR: Who knows, right? Who’s to say we couldn’t all bring 50 bikes together in one central location? There’s a whole lot of opportunity, I think.

PSB: I know you reached out other dealers and encouraged them to come if they need to build their own inventory. How did that turn out?

KR: We did have a guy from Texas come up. He has an independent shop and bought three bikes from us, and we shipped them back for him.

PSB: How easy or difficult was it to formulate the lineup of bikes that were going to auction. Obviously you can’t just hold bikes off the sales floor for weeks prior to the auction, can you?

KR: Every Monday we would purge the list, because, no, we can’t stop customers from buying the motorcycles. While we’re in development behind the scenes, the inventory is moving.

PSB: What kind of prices did the bikes sell for at the auction?

KR: They were basically what you would find at an auction. For us, it’s not the matter of the profit margin. It was about exposing a whole set of different customers to the motorcycling lifestyle.