December 4, 2006: Fewer service appointments lead to an obvious sales question
December 4, 2006
Filed under Archives
Six years ago I found that 60 to 70 percent of metric units did not appear in the shop in the 18 months following the sale (see the top chart at right). Polaris also fit this pattern.
I also found that for Buell, Harley-Davidson and BMW new units sold, only half these amounts (30 to 35 percent) fail to appear in the shop within the year and a half following the sale.
That was in 2000. Six years later, nothing has changed.
Honda, Yamaha, Suzuki, Kawasaki and Polaris still range between 60 and 70 percent for new units that were not serviced within 18 months of the purchase, while Buell, Harley and BMW have increased slightly to the 30-50 percent range.
On the other end of the scale, I found in 2000, Buell, Harley and BMW were getting 2 to 4 percent of their customers in the shop more than 10 times in the 18 months after the sale (see the bottom chart at right). That same
measure ranged around 0.5 percent for the metric plus Polaris units in 2000. In my study of the 2005-’06 selling period, I find Buell has increased from 2.4 percent in 2000 to a current 3.4 percent for the over-10 club. Harley has dropped from 3.9 percent in 2000 to less than
1 percent in 2006, and BMW has dropped from 2.3 percent in 2000 to 0.31 percent in 2006.
The question becomes, “Is this good or is this bad?” Does an increase in the number of customers never seen in the shop mean that your OEM is building better bikes? Or does it mean your customers are going somewhere else for their maintenance and add-ons?
And, for those lines with high percentages of customers coming in almost monthly, does it mean they really like your shop and love to buy and install new stuff? Or, is the thing breaking down that often and they hate having to haul it in, again!
I honestly don’t know right now. It would take a much deeper look at the type of work performed in each of these thousands of ROs and perhaps in some future study I can tease that answer out of the data. What is rather obvious is Polaris has joined the metric OEMs in building a product that either doesn’t need fixing or is completely accessorized when it rolls out the door. They don’t come back. And, the Buell/Harley/BMW group returns much more often after taking delivery, and then continues to come in on a regular basis for many months to come. Remember, these stats come from people who are actually buying things on ROs every time they walk through the door — not just dropping in for the coffee.
From the complaints I hear about making money in the service department, and the complex questions raised by this study, I can see we just don’t know enough about this difficult department. We are not car. We are not RV. And we are not heavy-duty truck. This is motorcycle, and there aren’t too many answers out there. But, with time, and more studies such as this, perhaps the answers will soon start to yield.
Meanwhile, track your customers. Politely bug them for the 600-mile services, and reward them when they make repeated stops at your shop. Free pick-up and delivery, whistle-clean bikes on the return, hot coffee and T-shirts are a small price to pay for loyal customers paying $80 to $125 per hour for your services.
And if you understand why Polaris customers act like metric and never show up at the shop again, please share the secret. I think there are several parties who would like to know. psb
Hal Ethington has been associated with the powersports industry for more than 30 years. Ethington is a senior analyst at ADP?Lightspeed.