Recession proof your dealership
April 27, 2009
Filed under Dealer Consultants
Most dealer principals are in the motorcycle business because they're passionate about motorcycles, not because they love to compile and analyze financial data. While being an enthusiast is certainly an important part of being successful in this industry, passion and enthusiasm alone won't drive traffic to your dealership, improve your closing ratio, increase your value per customer or multiply their frequency of visits. In order to recession-proof your dealership you must put first things first and realize that everybody in the dealership works in sales. For this blog, let's just focus on parts and service department staff members. After all, they don't usually view themselves as salespeople. But you know as well as I do that if they're not selling, they're only order takers, and merely taking orders won't cut it in our current economical conditions. They must take every opportunity to not only come out from behind the counter and make a sale, but to upsell every chance they get and increase the average value of each customer.
My wife and I recently celebrated an anniversary. I heard a commercial on the radio for ProFlowers.com and decided to surprise her with flowers. I logged on and chose my flowers (roses seemed the most applicable for the occasion). After choosing the flowers, I was asked which vase I wanted. Hmmm... how should I know which vase? They started at free and went up to $40. I thought to myself, "I don't want my wife to think I'm 'El Cheapo' so I better not go with the standard clear vase." So, I chose the red square vase for an additional $10.
Next I was asked if I'd like to include chocolates. I mean, you can't send flowers on your anniversary and not include chocolates, right? So add another $10. Now, what better way to make these flowers really stand out than with an "I Love You" balloon attached to them? She would really feel special with a balloon drawing everyone's attention. Add $5. I passed on the Teddy Bear. But because I was sending these to my wife's work, which closes at 5 p.m., I had to pay an additional $10 for morning delivery as the standard delivery was guaranteed between 9 a.m.-8 p.m.
So let's add this up ... the $29.99 special I heard about on the radio turned in to more than $65. That's a 117 percent increase in revenue (more than double) because the computer asked for it. If they would have been order takers, they would have only received the original $29.99.
Is your parts staff taking orders, or are they recommending other products with every customer? What about your service staff: Are they performing a 360 walk around looking for additional sales with each customer that brings in a unit for service? Implementing a system to generate additional sales is a must if you want to recession proof you dealership.