For many of us, the dreaded April 15 tax filing deadline looms large. But if you turn that negative attitude on its head, you have a promising opportunity. Consumers with tax refund checks in hand are prime targets for a powersports purchase. Is your dealership prepared to capture the sale?
During the tax season, there are two types of customers – those looking to splurge a bit and those who see their tax refund as a means to improve their financial situation. Selling to these two demographics is very different.
A portion of your target market has been wanting a bike for a while – but delayed the purchase due to uncertainty swirling around the political/economic climate. With a tasty tax refund in hand, that bike purchase dream appears more feasible.
Make sure your team primed to sell to this market. Work with your F&I administrators to craft purchase or lease packages that suit this demographic. Prepare your F&I team with the right products to keep this customer on the road for many years to come. Whether you are working with a well-educated customer – or someone who enters your show floor on a whim – make sure you are prepared.
Making a smart purchase
Another portion of your target market is recently employed, has received a modest tax refund and is considering a motorcycle purchase as a cost-effective means of transportation to/from work. This customer has very different care-abouts than your splurge customer. Flexible lending options and F&I protection products that keep the bike on the road are key selling points. This customer is not interested in the bells and whistles – but instead the nuts and bolts of a smart purchase that supports their future.
Does your team know how to land this customer on the right bike for good lending options? Do you have lender partners willing to work with these types of customers, who might not have perfect credit profiles? Have you worked with your product administrators to fill your product menu with the right kind of F&I products to ensure that loan reaches maturity? Does your F&I team understand the differences between lease vs. buy options – and can they work a win/win deal?
A positive sales climate
According to The Conference Board, the Consumer Confidence Index increased in February and remains at a 15-year high. The Bloomberg Consumer Comfort Index -which issued March 9th – showed Americans’ confidence continued to grow with the metric reaching the highest point in a decade on more-upbeat assessments about the economy and buying climate. The Consumer Comfort Index rose to 50.6 in the period ending March 5, the highest since March 2007.
The report showed respondents viewed the buying climate as the most favorable in nearly 15 years, indicating household spending may rebound after a slow start to 2017.
But consumer confidence does not automatically translate into a spending spree. According to Princeton Research Survey Associates, 46 percent of Americans plan to receive a tax refund this year. But only 26 percent plan to spend the refund on a purchase. Now is the time for smart powersports dealers to fine tune their marketing in order to capitalize on this spending window.
Our leadership team predicted that powersports unit sales would start to see an uptick in February. We’ve begun to see some growth, especially with lease volume. If the business market continues to stabilize – and consumer confidence stays strong – we expect the powersports market to see slight growth in 2017, with specificity in numbers by the start of the third quarter.
There are glimmers of hope in the 2017 market. Don’t let this tax season catch you without a plan to grab increased profit.
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.