Dec. 4, 2006: How to keep afloat in the information age

The “swirl” I have talked about for many years is still there and you and your department managers are buffeted by it daily.
We could talk at length about the distractions you deal with constantly and your need of management skills to effectively react to the daily multitude of challenges. This is a tough job. We are in a business with more transactions and line items of product than virtually any business I can think of, and we deal in a nonessential product seeking the disposable income of an affluent clientele with high expectations. The swirl is very real, but just dealing with it is not enough.
We now have to contend with the “wave” that in spite of the best operational controls, will overwhelm even the most astute dealers. The information age has provided our customers with more information and our competitors with the means to be stupid on a larger scale. We not only need more control of the showroom, we need a higher degree of sophistication and focus. The good news, if I may stay in a metaphorical mode for a while, is the wave can be ridden and we have been able to demonstrate that riding it will take sales beyond anything we have experienced in the past.
There are more people than ever who want what we sell. Since they are more informed and sophisticated, we have to be as well. In October, I hosted a conference for a group of the very best sales managers in the country, both metric and Harley. We took a lot of time to identify what the issues and challenges were. After identifying the problems, I do believe we formulated some clear solutions. We were able to build off the experience of several of the attendees who have actually experienced a large increase in volume along with higher front and back-end gross profits.
What was clearly identified as the primary problem in today’s market was what we came to call the “step 16 factor”, which comes when you combine steps 1 and 6. Since the customer arrives with more information, and more often than in the past, with a low price from a competitor, the overriding tendency is to go immediately from step one in the sales process to step 6, hence step “16”.
In the past when the customer came in seeking information, the sales process was driven by providing that information, which exposed the product along with the features and benefits and hopefully created some excitement and desire to own. We get derailed when the customer, who feels he has all the information, drives us to price discussions. Premature price discussions are not a new problem, it is just now so pervasive that it undermines the training we provide.
What we sell will still cause goosebumps and quicken the pulse of the buyer who has always wanted what we have and has finally mustered the courage to come in and look at what he has fantasized about for so long. He did not get goosebumps online. The sales process has not changed, and really neither has the buyer. Sales management just has to shift to the next level. The good news is it is happening and you can ride, rather than be swept away by the wave.
The “swirl”? If I ever get an answer for it, I’ll let you know.
BUYING OR SELLING A HARLEY-DAVIDSON DEALERSHIP
The Motor Company has made it clear that the era of “Pac Man” acquisitions is over. They are not going to allow the acquisition of a collection of Harley dealerships to be owned by absentee owners. They have taken the moral high ground and may well be able to use the same arguments we have used for years to enact franchise laws, that what they are doing is in the public interest.
The requirement is there must be an onsite operator who has a 51 percent interest and has made an investment of 51 percent of the capital. In so doing they can argue, as I have in the past, that an onsite owner/operator is the best way to appropriately and safely sell our motorcycles to the public. It is the argument we have used to keep our product out of Wal-Mart. Some dealers will feel this policy has diminished the value of their business by taking many ready buyers out of the marketplace. Whether they planned to or not, what has happened is the number of potential buyers has greatly increased, not decreased.
There is not a shortage of motivated and dynamic young people who have the ability and energy to effectively run a Harley dealership at the next level on top of the wave. Forty-nine percent of such an opportunity is a great investment and there are also lots of investors available. Deals can be structured by Harley’s rules that allow everyone — the seller, the buyer and the new operator — to win.
If you would like more information, please e-mail me at edlemco@aol.com or phone 340/719-8591.
Cheers, Ed. psb
Ed Lemco has been involved with the powersports industry for more than 30 years. Lemco, the former owner of Lemco Management Group, is the founder and executive director of the National Council of Motorcycle Dealer Associations. Lemco currently operates a call center for dealers in St Croix.