Jan. 21, 2008 – A dealer’s perspective: 2007 in review

Powersports Business reviewed “Power Profiles” from 2007 and looked at the trends affecting dealers most, from the influx of
Chinese imports to the challenge of dealing with Web savvy customers looking for a bargain. We also chose some of our favorite promotional ideas dealers used in the past year, along with some memorable words of advice. Although the number of dealers is only a small representation of those across North America, we don’t think you’ll be surprised to see the trends listed likely fit with the same issues all dealers faced in 2007 and will continue to deal with in 2008.
Finally, we interviewed several dealers and asked them what their best business decisions were in 2007. The answers are enlightening and might help you move forward on a project/idea you’ve been struggling with. Look for more in the next issue.
BEST BUSINESS DECISION IN 2007
Team Bozeman, Cliff Gullett
I spent most of my summer not at the store. I was there off and on. Last year we spent a lot of our time with the Class Action lawsuit with Polaris. For us our best decision was to quit fighting with Polaris and put our concentration back on the store. I’ve done a lot of stuff through my general manager since I’ve been gone a long time. We changed a lot of things. We refocused on the store and the procedures we had and not get so wrapped up in the other stuff going on. The biggest thing was to quit fighting with Polaris. We got the Class Action lawsuit resolved, and we just got back to the basics. We are going to keep going that way. I think for next year we just have to focus on making the best out of the customers we do have. With the industry kind of slowing down, you have to make sure you do what you do the right way.
Rexburg Motorsports, Jared Burt
Just restructuring our sales system. We implemented a sales tower, and it’s just a whole new system for selling. It’s just everything that drives customer service. In addition to that we actually have a secret shopper program where we measure and have gotten feedback. We’ve measured prospect satisfaction through our secret shopper program. Then just controlling the showroom floor better. We developed our own system. That’s resulted in we measure it, give the information to the managers, and then we are continually changing our sales system, so we take better care of our customers. It’s been a positive experience; the margins have gone up and so has the morale. We really felt like that was an area we’re missing. We measure our dealership’s market share in our market. We felt we were missing enough business, and I felt like customers were coming in and leaving and buying somewhere else. They tell my salesmen that they’re going to think about it, but the reality is they were buying from another dealership or something off the Internet. We wanted to figure that out and get control of our customer floor traffic. We wanted to increase our market share.
Tousley Motorsports, David and Ron Glassman
We focused on cutting inventory; it lowers the floorplan for us because business is down. Lowering inventory is difficult to do. It’s like trying to stop a freight train. It’s something we’ve been working on for a year and are still trying to do because it’s just starting to kick in because you order so far in advance. The outcome is much lower interest costs. We are constantly working on it, and it’s something they will work on into ’08. Dropped it down a million dollars during this last year. More than that. New is a little over a million. We’re down about a million and a half. We don’t have to pay interest on the million and a half dollars.
Peacock Ltd., Jim Faeilla
We focused on managing inventory and expenses. I’m a 20 group member, and we saw this trend about a year and a half ago, but definitely managing inventory and managing expenses. The declining market, tougher competition and the fact that buyers are being more cautious are a couple reasons why I started focusing on that. Do a better job of managing when things are real good; I’ve been doing this business for 34 years and things were great for 30 years. Before you could get away with not managing as good as you should because there’s tons of profit. It kind of covers up your mistakes. When things get lean and there’s not as much profit, you really have to manage well. The other thing you have to focus on is customer satisfaction and customer retention, and that’s been a year-long buzz in the industry. It’s crucially important. The result was cutting expenses and doing a better job of managing the budget and taking care of the customers. I’ve found from talking to dealers around the country this year that you get half the dealers who are just doom and gloom, and that attitude projects to your customer base. You need to stay positive, keep your customers and employees happy; I think those dealers were doing OK this year. I think you have two very distinct groups of dealers this year. You get half the dealers not profitable, and even the most profitable dealers a year ago and two years ago, I talked to one yesterday, a 20 group member, the highest operator and even this year things are tough (for him). He’s still making a profit, not the numbers he was, but even a guy who knows how to manage and operate still had challenges.
EDITORS’ PICKS: BEST PROMOTIONAL HOME RUNS
Open Road Harley-Davidson of Fond du Lac, Wis., evolved Harley Davidson’s Garage Parties idea into town marketing events. The events are for female riders who want to learn more about riding.
Andy’s Cycle Sales of Hazard, in Bonnyman, Ky., has used a customer follow-up program to ensure its store stays top-of-mind with customers.
Ducati New York developed cross promotions with Red Bull and Mazarati, turning warehouses into makeshift nightclubs to attract younger clients
Gieson Motorsports of Rock Falls, Ill., allows the city to hold its annual fireworks display on the dealership’s property, and it also holds an annual circus on the property.
Seacoast Harley-Davidson of North Hampton, N.H., has a motorcycle-only drive-in theater it uses to show current motorcycle-related movies such as “Wild Hogs” and “Ghost Rider.”
EDITORS’ PICKS: BEST WORDS OF ADVICE
“Some old guys think race on Sunday and sell on Monday, but that doesn’t work anymore. Those days are over. It’s sad, but true. You just have to adjust to it.” Bob Dron, owner, Bob Dron Harley-Davidson Motorcycles, Oakland, Calif.
“Tap into that customer who’s walking through the door. Men and women are different. Twenty-somethings are different than 40-somethings. Know what they want.” Pete Johnson, part owner, Open Road Harley-Davidson, Fond du Lac, Wis.
“Don’t be afraid to make a fair profit. To take care of customers and employees, you have to make money. Those (people who) don’t understand that, don’t want to be your customers.” Ted Filer, owner, Filer’s PowerSports, Macedon, N.Y.
“The floorplan is the key thing that you have to watch.” Richard Fox, Fox’s Suzuki Kawasaki, Roxboro, N.C.
“The only thing I would say is to be eternally optimistic.” Mark Barnett, general manager, Barnett Harley-Davidson, El Paso, Texas