OPINION – Is your dealership changing as quickly as the industry is?
March 12, 2007
Filed under Columns
It has been a very busy 30 days, with the Harley-Davidson winter meeting in Orlando and the annual trade show in Indianapolis. I have had a chance to hear from a number of people.
It is not often that a broad spectrum of people in our industry ever agree on anything. From the CEO of Harley-Davidson, the president of the Motorcycle Industry Council (MIC) and seasoned dealers, to aftermarket distributors and even the exuberant motorclothes gals in a bar in Orlando, everyone I’ve talked to in Orlando and Indianapolis all agree that things have changed.
Doing business in 2007 is different than it was just a couple years ago. My question to everyone, at every level of the industry is, “so what are you doing different?”
Since everyone agrees the business has taken on some new dimensions, has your dealership adjusted? Sales are up, in spite of the slight downturn reported by the MIC. Remember they are only reporting sales from those that report to the MIC. There is more opportunity, but dealers in most parts of the country report that trading conditions are tougher.
There are more price shoppers, and there are more dealers of all brands feeling compelled to lower prices. Many dealers report price competition is more prevalent and fiercer than ever. If your sales process is customer driven, you will be overwhelmed with demands for discounts.
Increased supply for all brands has eroded margins for dealers catering only to customer-driven business. Astute dealers are adjusting their sales process to capture business from prospects they missed in the past. A dealer has to be better at negotiating with the price shopper, getting the credit-challenged customer financed and, most important, selling the freedom, fun and adventure to the majority of visitors to the showroom who are “just looking.”
With control of the showroom and the sales process, price is dealt with after we have sold the fun, the brand and the dealership.
Too often, everybody is fighting over the price shopper, who demands attention, and ignoring the good buyer who is just looking.
At the Indy show, I had a chance to have dinner with Malcolm Smith, his wife Joyce, their two kids and some of their dealership team. When I?asked him, “how’s biz?” the discussion turned to talking about some very large and visible dealers they had to compete with. My response was, “Man, you are Malcolm Smith. There is hardly a better known name in the industry. Your level of passion for and commitment to motorcycling is legendary. The other guys are nothing more than great big box retailers. Stop bidding for business and sell the legend.”
One real extraordinary thing about our business is that even the hard-core price motivated shoppers want to talk. Greet them and make them all feel welcome. Acknowledge the price request and assure them you are there to please. Then sell the fun, talk about riding and ask them what they’ve done and what they plan to do. Show them the dealership and your commitment to supporting their hobby. Sell the store and your passion for the sport. Show them what you do and what you have done. Sell the brand you have. The vast majority of the visitors to your showroom want to hear what you have to say, and they will listen.
There is only one Malcolm Smith. The name might be more famous than yours, but is your commitment and passion any less? Does your dealership make less of a commitment to its customers?
Tell your story, increase the desire to be part of what we do and then talk about the price. Do what the big box mass merchandiser cannot.
We have all the bad business we need, do not create more. Someone wanting only a price has not been sold the fun. And be sure you have a follow-up process in place. Fifty percent of the people visiting your dealership will not make a commitment to buy today at any price. If you have sold the dealership and the fun, they will be a great prospect tomorrow. A significant number can be had with hello, but you do have to call them and say it.
It is very clear that metric dealers are now past being able to ignore when it comes to what’s being manufactured in Taiwan and China. There is just too much of it, and it has become more of what American consumers want to buy. Side-by-side, they look as good as other metric offerings and are priced a lot lower.
The quality, while still a ways behind, has improved and justifies the price being charged.
It is indeed time to take a hard look. The prices are low enough to perhaps bring a new wave of buyers to the showroom. Make sure, however, that it’s a really hard look. The incremental business you might generate is not worth compromising the reputation you have worked so hard to develop. 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.