Managing the impact of down grading and sizing

Tim CalhounThis year is at best a trying one with the election, a still slow to recover economy and lending that still puts many of your potential customers outside staring at that bike they want. At these times it is may be tempting (or elemental) to reduce your service levels or simply put; offer less to your customers than you may have offered in the past. This is when you have to ask the hard questions; what element of your business matters most? Is it service, sales, or parts that is reduced? What impact on your customers will this have?

If changing personnel, the long-term impact must be measured. Should you lay off employees you have to think about everything from the impact on staff you are retaining to what it will take to scale up again. If you are reducing staff, look towards the roles that can be easily integrated into other positions you will keep or that can be readily managed by a minor investment in better technology. Today it is easier than ever to integrate online forms such as warranty registration or inquiries, service appointment calendars, consumer question forms, live chat or listings of current units available at your dealership. I personally detest answering services but there is indeed a place for them as reaching a directory or a recorded voice is considerably better than a phone ringing or busy signal. I always take these as signs you are either out of business (living in another era) or just do not care.

If you are lessening or removing benefits that your customers have enjoyed it could prove even more costly. It could be as simple as removing the free coffee, or the free bike wash after the service or more elemental like losing a full time service writer which lengthens the process of setting an appointment and displeasing the consumer, or reducing counter or sales staff, so getting answers or purchasing that accessory or unit becomes more of a hassle.

Here are a few thoughts on this:

  • If possible avoid downgrading services, as your customers will always be more concerned on what they have lost than what you have given them as an alternative.
  • If you cannot avoid changes then offer alternatives: no free coffee but a new affordable coffee or drink vending machine. No dedicated service writer but a convenient easy to use online calendar to book a service or sales appointment. Make these changes clear to your customers as the worst thing you can do is let your customers painfully discover them.
  • Discount these alternatives to the bone, make them feel like an exceptional deal; “Would you like to add a bike wash for five dollars?” If it is realistic and seen as an affordable luxury then it will be seriously considered and could actually enhance your value to your customers. Trying to make any of these a profit center I believe is a mistake.

Your best customers, believers, tribe of loyalists are your most important assets and being open about your changes and creating a clear message about these changes is elemental. Managing the impact of these and keeping this core group happy is considerably easier than just expecting them to understand “How hard it is right now” or worse yet just letting them discover their loss of service or conveniences and having them seek these elsewhere.

Tim Calhoun is the executive vice president of LeoVince USA, a dealer-direct manufacturer of exhaust systems. Its Italian parent company is the world’s largest powersports exhaust manufacturer.

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