Dec. 1, 2008 – Pulling in holiday shoppers

by Steve Bauer
Managing Editor
With household budgets squeezed to near-historic proportions, powersports dealers are trying to find new and creative ways to attract holiday traffic.
According to a recent Powersports Business online poll, 41 percent said they would be holding sales or discounting items to bring in more foot traffic. Although dealers interviewed by PSB agreed advertising still can be an effective tool for driving store traffic, many believe simply lowering prices on products will outweigh the importance of advertising.
Kerry Gilde, owner of Main Powersports outside of Mobile, Ala., says he plans to drastically cut his advertising during the holidays this year, as he believes many consumers are numb to advertising during recent times because fliers in the newspaper still won’t solve their budget woes.
“As a business owner, I have to be prudent about where my money is best invested during these times, and for this year I have decided advertising is probably the least productive thing I can do,” he said. “Frankly, I think the best course of action right now is to discount your older inventory and those who are interested will be more willing to buy when they see the great deals they can get on some of the vehicles they’re interested in.”
Matt Solomon, an independent economist who specializes on retail sales, says most big-box retailers are counting on steep discounts to help keep sales strong, and that the strategy can be beneficial for small business owners as well.
“I don’t think it’s prudent to think you can discount your products like a Wal-Mart for example, but saving money is the top priority for most consumers this season,” he said. “Normally I wouldn’t recommend that strategy for small businesses because it can lead to price wars with competitors that might drive away business you can’t afford to lose. This year is different than any in recent memory, however, and big sales or discounts on certain items for specific periods of time can keep consumer interest high right now.”

Tried-and-true techniques
Many dealers interviewed by PSB say they will try to attract customers this Christmas by concentrating on the retail basics: increasing advertising, stepping up customer service, courting previous buyers and highlighting what’s new in terms of product lines. In fact, 24 percent who responded to PSB’s online poll said they will be increasing their advertising during the holiday selling season, showing that many are sticking to previously proven techniques to attract customers.
“I really think that’s the best way to go, get some inserts in your local papers, things like that have always been effective for me,” said Gary Brewster, owner of Sunside Powersports outside of Yuma, Ariz. “And I believe they still can have a significant impact if you highlight the right things in your ads. Don’t throw everything at the customer, really focus on discounts or sales you’re having that would attract the bargain-hunting consumer.”
Don Enich, general manager of Big Red Powersports in Lincoln, Neb., says it’s never been a question since late summer that the dealership would start offering deep discounts on products for the holiday season.
“Even with the discounts, if we can increase our store traffic by 30-40 percent in the next few weeks, although we won’t be in the black by the end of the year we’re hoping it will go a long way in helping us catch up on what has been a dismal year for us.”
Enich says his dealership also has two events planned for December, both featuring live bands, demo rides, free food and other activities.
“We’ve held onto a large portion of our advertising/marketing budget that we typically would have used earlier in the year once we saw that things were going to be very slow this season,” he said. “We’re taking the path of making one last push at holiday shoppers and hope that people see the discounts, get excited about the products we offer and make the purchase.”

Thinking beyond the norm
Some dealers are dusting off some long-forgotten sales ideas to try and spark new customer traffic. One tactic that has gained some momentum among dealers is layaway for smaller ticket items.
“We introduced our layaway program this fall for all PG&A that retails for less than $500, with the requirement that the customer has to put 10 percent down at time of purchase and make weekly or semi-weekly payments,” said Nathan Barber, owner of Tower Cycles in suburban Milwaukee, Wis.
Barber says the layaway program has been such a huge hit that he’s considering keeping it once the holiday season passes. He estimates his PG&A sales have increased 25-30 percent because of the program.
“The fact that people don’t have to use their credit cards to make the purchase, and can make smaller payments that fit into their budgets is a deal-maker for many of my customers,” he said. “And I get a lot of business through word-of-mouth, so I get a lot of friends and family members coming in to buy.”
Tom Breaston, owner of Breaston Powersports in Charlotte, N.C., says he is already opening early and closing late on Fridays and Saturdays, with special deals planned each weekend — the kind normally reserved for the day after Thanksgiving.
“It was something that my entire staff came up with when we were brainstorming how to really drive customers into the store, and although it’s been a lot of work to put together in terms of long hours and added staff, so far I’ve been pleased with the result.”
Breaston says although his technique might not be right for every dealer, not looking at every possible way to promote interest in your dealership is another step toward lost sales.
“We all know these are challenging times, but you just can’t bury your head in the sand and keep to the status quo,” he said. “If nothing else, maybe coming up with some new marketing techniques will inspire a change in your business model that extends beyond the holiday season.”