Coffey’s Corner: How are dealers finishing the year strong?
This article originally appeared in the November edition of Powersports Business.
As 2024 winds down, I wanted to recap a few conversations I’ve had with dealers about how they will finish off the year. Whether it be driving sales or combatting obstacles, here are a few of the more common topics I uncovered.
Most powersports dealers are implementing several strategic initiatives to ensure a successful close to the year. With shifts in consumer behavior, economic pressures, and technological advancements impacting the market, dealers are focusing on key areas that address both immediate sales goals and long-term profitability. These strategies revolve around maximizing back-end revenue, community engagement, digital marketing enhancements, and service department optimization.
Back-end revenue focus
With tighter margins and increasing financial pressure on front-end sales, many powersports dealers are intensifying their efforts on back-end revenue through finance and insurance (F&I) products. By offering add-ons such as extended warranties, gap insurance, and debt protection, dealers can generate more profit per transaction. This approach is crucial in a year marked by fluctuating consumer confidence and economic uncertainty.
To make these products more appealing, dealers are conducting extensive training for F&I managers and sales teams. Proper training ensures staff can educate consumers about the benefits of financing options and add-ons, turning what might have been a cash sale into a financed deal, which can boost overall profitability. This strategy has proven essential in helping dealers offset the financial pressures on front-end sales, where margins have tightened.
Engaging with the community
In a push to build customer loyalty and increase foot traffic, many dealers are deepening their community engagement efforts. Hosting local events, sponsoring charity rides, or partnering with local organizations have become popular tactics. These activities foster strong relationships with customers and potential buyers by positioning the dealership as an integral part of the local community.
For instance, some dealerships are organizing holiday-themed events or promotions, which not only attract existing customers but also draw in new potential buyers. Local outreach events also present an excellent opportunity to promote merchandise and accessories, increasing the dealership’s visibility and building long-term brand loyalty. Dealers are realizing that cultivating a community around their brand is as crucial as selling individual units.
Digital marketing and personalization
As competition continues to grow, powersports dealers are turning to digital marketing to differentiate themselves and drive sales in the final quarter. One key strategy is optimizing local SEO to capture nearby customers who may be searching for products or services online. Ensuring the dealership’s information is accurate and easily accessible through search engines can significantly boost foot traffic and online inquiries.
Dealers are also investing in more targeted digital marketing strategies such as dynamic email marketing and programmatic advertising. Ken Cook, Southeast regional sales manager at Denago Powersports has noticed this firsthand with his dealers.
“Dealers are really focusing on how and where they’re using their marketing dollars and adopting a mindset of trial and error until they find that magic combination that increases foot traffic and drives sales,” he says. “Other than that, specifically in my region, I’ve seen a lot of movement towards Facebook Marketplace as a digital tool which has proven to help a lot of my dealers drive revenue this year.”
Additionally, programmatic advertising allows dealers to serve ads to specific audience segments based on online behaviors, ensuring that marketing dollars are spent efficiently and that the right customers are reached at the right time. As the year ends, these tailored marketing approaches help dealers maximize their advertising ROI.
Service department optimization
With many customers holding off on large purchases due to economic uncertainty, service departments have become a critical area of focus for dealers. Powersports dealers are capitalizing on service revenue by offering maintenance packages, warranties, and other service-related products. This not only helps capture additional revenue but also ensures that customers remain engaged with the dealership beyond their initial purchase. Dealers are also working to improve the efficiency of their service departments, ensuring that customers have a smooth and positive experience.
By focusing on service excellence, dealers can foster long-term customer relationships, encouraging repeat business and customer loyalty. The demand for parts and service often remains stable even when unit sales slow, making this a key revenue stream for many dealerships.
Conclusion
As 2024 draws to a close, powersports dealers are pulling out all the stops to finish the year strong. By focusing on back-end revenue, community engagement, digital marketing, and service optimization, they are positioning themselves for both immediate success and long-term growth. These strategies, coupled with a keen eye on technological advancements, are helping dealers navigate the challenges of a competitive market while maintaining profitability and building stronger customer relationships.
Till next time, shiny side up and checkered flags!
Melissa Coffey is a Powersports industry veteran with over 25 years of experience in sales and marketing leadership. She has excelled at building brands, developing teams and impacting sales and marketing at the highest levels. She currently oversees CATCH, her consulting firm which provides fractional sales and marketing support to companies in the powersports, motorsports, marine, bicycle and EV industries.
