Oct. 4, 2010 – North American expansion

KILLEEN, Texas — Jim Foster’s spacious dealership, located off a Texas interstate on the doorstep of one the largest U.S. military bases in the world, represents anything but a typical European-brand dealership.

The freeway-facing parking lot features nearly as many UTVs as motorcycles.

Much of the clientele is probably more horsepower-minded than brand-sensitive.

And the brands that are prominently displayed to the passing traffic in this central Texas town are more synonymous in the metric world than the European one.

Yet, Foster, a veteran of more than three decades in the industry, saw considerable reason to add a European brand, Triumph, to his dealership earlier this spring.

“It helped make us a destination,” he said.

Foster’s Killeen Powersports represents a growing number of Triumph dealerships that don’t quite fit that typical European brand store picture, of a quaint, brick-and-mortar location that houses one or two additional small-volume lines and a small service shop in the back. The English manufacturer, celebrating just its

15th year in North America under its current ownership, has begun widening its retail network to metric and Harley dealers as its starts a crucial growth period.

Earlier this year, Triumph announced to its dealer network that not only would it venture into a new category — one that will be announced early in 2011 — but expand its model portfolio by more than 40 percent in just a few short years.

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Along with the increased number of models will be a series of changes to support what Triumph envisions as a significant increase in its North American business.

“Strategically, we are now becoming a sales and marketing group,” says Satu Mehta, vice president of sales for Triumph Motorcycles (America). “We started off as a manufacturer.”

Looking ahead

The growth in Triumph’s North American dealer network over the next few years will pace alongside the company’s expanding model range. Like Triumph’s current, carefully orchestrated 10-year vehicle plan, the company’s growing dealer network has been equally planned out.

“We don’t throw darts at a map,” said Mike Cunningham, vice president of dealer development for Triumph Motorcycles (America). “We look at it very scientifically.”

In fact, Cunningham and his staff have identified roughly 40 open points that are pinpointed on a North American map. The map, prominently displayed at the company’s North American headquarters in Newnan, Ga., is a testament to what Triumph’s North American dealer network could look like in 2014, when dealer count is expected to swell to 230 from the current 180-plus.

“First of all, we’re looking for great operators,” Cunningham says, describing how the company intends to fill those 40 openings over the next three-four years. “People who are process-driven that understand how to run a business.”

Foster’s Killeen Powersports, a business that has profited from a long-standing run in different dealership 20 groups, fits that profile.

“Then,” Cunningham adds, “ we look at those opportunities and see if there is a way to integrate our brand into that operation.”

For Triumph, that integration requires converting an area of the showroom into a Triumph haven where its trademark classic and modern models are featured next to its accompanying parts, garments and accessories. Foster followed that requirement in Killeen, even though it caused some initial design headaches in arranging the Triumph signage and store fixtures into the current showroom layout.

But, in Foster’s mind, the positives of bringing on Triumph outweighed any initial store design concerns.

“It’s a line that we could sell that I wouldn’t get competition from somebody nearby low-balling me,” Foster said of Triumph. “I just felt like it would be easier to get margins on (Triumph bikes) and it would be a pretty good deal for us.”

At the time Foster initially considered adding the line — in late 2009 — Triumph also was offering more new model-year motorcycle options than the store’s current brands.

“We can have a pretty good rush here based off the military that’s not in keeping with what the rest of the country is doing,” Foster noted, speaking of the influence nearby Fort Hood has on the store’s unit sales.

“With a young soldier, it’s what looks cool and I think Triumph is appealing to a broader segment of the population than it used to.”

CRM & training

As Triumph broadens its lineup — seven new or significantly upgraded models will arrive in showrooms by June — the company also is addressing its customer-retention and dealership-training efforts.

“In order to grow this market, one thing we’re absolutely going to have to focus on is our customer data,” Mehta said. “Helping our dealers to generate leads, manage those leads and turn those into solid sales and follow-up sales.”

Part of that effort will be wrapped around the company’s Web site, which monthly generates more than 100,000 unique visits. Within the next six months, Triumph is slated to unveil a new Web site that is built around an interactive customer retention management system. This system is designed to funnel more of these unique visitors to dealerships.

“We’re putting a lot of emphasis on driving traffic into dealerships and making our current customers aware that Triumph is here and

Triumph is here to stay,” Mehta said.

The effort also is aimed at increasing customer interaction with Triumph and the dealership, an absolute must for any lifestyle brand. “It’s about contact, it’s about follow-up, it’s about association,” Mehta said of the lifestyle brand mindset. “They (Triumph owners) want to be a little bit unique, but they want to be involved as well.”

Triumph also is getting involved in dealership training, conducting sales department training courses as significant models come to market as well as providing funding for a number of its dealers to attend Profit Xcelerator, Powersports Business’ dealer education conference & expo.

“Once they’re in the door, how do you keep them there and sell them?” Cunningham said. “That’s one of the reasons why we’re one of the sponsors of ProfitX. We want to invite our

dealers there to give them the best industry knowledge we can provide.”

Market share gains

In an incredibly challenging marketplace, Triumph has not been immune to the retail sales downturn that hit the industry in late 2008, accelerated throughout 2009 and continues today. However, Triumph’s Mehta says the company has consistently outperformed the market in its relative market segments.

“We have every single month,” he said.

For Foster, the type of customer that Triumph draws to his Killeen dealership is equally important.

“They’re not as determined to work us over to make sure we don’t make any money as a Gold Wing customer would be,” he said. “They don’t expect the deep discount. It’s perceived, I think, as a higher-quality machine.”

That customer and Triumph’s retail lending partner FreedomRoad Financial — “as good as any we have used,” Foster says — is bringing the brand additional dealer interest. Cunningham notes both metric and Harley-Davidson dealers now number among Triumph’s 167 U.S. dealers.

“They’re out to secure good dealers,” Foster says, recalling, with his characteristic humor, that his own weighty dealer application tipped the scales at more than 5 pounds.

“Frankly, the product has been available, and I think it works really well with what we have.”

ABOUT THE DEALERSHIP

Killeen Powersports

Location: Killeen, Texas

Units sold: 600

Brands: Honda, Polaris, Suzuki, Triumph

Staff: Admin 5, F&I 2, PG&A 7, Sales 10, Service 10

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