During the past two months, we have shared challenges faced by powersports lenders and dealers when working with their counterparts. I gathered some of these insights during a powersports dealer conference last fall, and added my own observations as well. If you missed those columns, you can find them here: Part One and Part Two. More than pet peeves, these issues truly impact the powersports industry.
The vision for business in 2017 is far from clear, with many dealers and lenders taking a “wait and see” approach. What is clear however, is the need to build strong relationships across the aisle that will support both lenders and dealers. Regardless of which side you are on, there is room for improvement. Based on the challenges identified earlier, let’s see how both sides can work across the aisle to build productive and financially beneficial relationship for both lenders and dealers in the powersports market.
Do Your Homework
For many lenders, the powersports market is new territory. And while there may be a few similarities with automotive lending, there are many unique aspects that set the powersports market apart. Before jumping into powersports, lenders must do their homework. Who buys powersports vehicles? What is the financial and credit landscape? But don’t rely on Google. Talk with powersports dealers and consumers. Get a good sense of the market before developing your lending requirements.
For dealers, getting your loans bought doesn’t have to be difficult. Take the time to meet with your lenders, discuss their requirements, and train your team. Also, offering F&I products can actually benefit your lender relationships. Lenders may be more open to offering financing on a motorcycle that includes a vehicle service contract, as the F&I product has the potential to protect the loan. In the event of a vehicle breakdown, the customer’s out of pocket expense is greatly reduced with a VSC, eliminating the question of whether to pay for expensive repairs or their motorcycle loan. Before jumping in to a full menu of products, take the time to understand your customers and your lenders to determine which products meet everyone’s needs.
But maybe more important than homework is frequent communication between lender and dealer. Products, credit terms, regulatory/compliance requirements, and customers change. Set a standing meeting to discuss these changes. If your partners aren’t providing the information you need – be proactive and ask for it. Make 2017 the year you stop waiting and take the initiative.
One thing we can all count on is change. So quit complaining and wishing for the “good ol’ days.” Embrace change and demand that your partners do the same. Because I guarantee, the competitor down the street and the new Millennial customer has embraced change.
This is another area that is ripe for communication between lender and dealer. How are consumers using technology to purchase powersports products? What improvements are available in the dealership space for securing consumer credit? Add this topic to your standing meeting. Share research and insights.
Work With – Not Against – Each Other
The relationship between lenders and dealers should not be adversarial! In fact, it should be closely linked to insure profitability – and to secure more customers. Rather than spending energy finger pointing, spend that energy understanding the challenges facing each other’s businesses. There are enough outside forces creating roadblocks. Don’t be part of the problem – be part of the solution.
Dealers – take time to understand changes in the overall credit market. Lenders – gain an understanding of what manufacturers and consumers are requiring of their dealers. And see where there are opportunities to work together.
As you can see, the key to successfully working across the aisle with your lender/dealer partner is communication as well as a willingness to understand each other’s needs and challenges. Add in some proactive research and innovation and your chances of success are greatly increased.
We can’t control the overall business climate. But we can control the health and profitability of the relationships we have with our partners and customers to make 2017 a successful year for both lenders and powersports dealers.
Glenice Wilder is the vice president of Powersports for EFG Companies. A 33-year industry veteran, Glenice is responsible for growing and developing EFG’s action and powersports market channel. She combines her passion for motorcycles and her dedication to serving EFG’s customers to develop solutions that consistently exceed their expectations. Glenice acts as a strategic partner to assess her clients’ areas for improvement and how EFG can fill that role. She provides insight in how to increase productivity by pairing the right products within the right markets for the greatest return on investment.