Jan. 19, 2009 – Pursuing the untapped demand for the powersports industry
January 19, 2008
Filed under Columns
The motorcycle business has more untapped demand than any business in the United States.
The potential for a retailer to prosper is better now than I have ever known it to be in the 38 years I have been involved in the motorcycle business. What makes it so good now is that we have the resources and the ability to go beyond the “surface business.”
Past periods when supply exceeded demand and the surface business, made up of ready buyers, lined up to pay what a dealer asked were indeed good times, but the opportunity in 2009 is better. The dealerships I am involved with are all selling more and making more net profit than the so-called boom times.
To understand the opportunity, we first must look at the demand, why it exists and what has to be done to tap it.
The market is untapped because the resistance that keeps people from buying is greater than any other product in the retail marketplace. Very little of the true demand percolates to the surface on its own.
A consumer survey, conducted by the U.S. Department of Commerce, and reported to the Motorcycle Industry Council (MIC) at the annual meeting in Indianapolis in Febuary 2002, stated that 28 percent of consumers surveyed, male and female, said they would have an interest in buying a motorcycle or ATV in the next few years. Looks like more than 80 percent of those with interest did not. If we compare with automobiles, lampshades or Pogo Sticks, likely
90 percent of consumers with a desire for those products and the means to do so have purchased. Most retail businesses successfully fill demand because there is no inherent resistance to the product. You want it, you can afford it, you buy it.
Every year the vast majority of potential consumers have failed to overcome the inherent objections, or if they did surface had a high likelihood of an unhelpful experience at a retail dealership.
Before talking about tapping the market, we need to understand why the resistance is there, and why we have to go below the surface to reach it. The product is expensive, it carries an aura of danger and everyone knows someone who was killed on one. He and his wife have other priorities. It is a very expensive toy that he may not use all that much. Heshe is not very mechanically inclined and it looks like you have to know a lot. Heshe has never ridden one, and is fearful about ability to do so.
All of this resistance keeps the untapped demand below the surface. The good news is the demand is so strong that eventually all do surface “just looking” at a dealership. The allure is there, the desire is there, but like the proverbial groundhog, all he sees is his shadow, there is no one there to help him deal with his real concerns.
We should never underestimate the amount of effort it takes to overcome the inherent resistance to show up “just looking.” Sadly most are just ignored after announcing they were just looking. Or, at best, given a brief presentation and a price quote and are now expected to drive the process. With what we sell we have to translate “just looking” into: “I’m really attracted to what you have here, but there are many things in my mind that I need to overcome.”
It is much easier to say “just looking.” I can tell you unequivocally, based on literally hundreds of thousands of telephone interviews with showroom visitors, that 100 percent want what we sell. Price is an issue only to the extent of justifying the purchase, which requires overcoming the other real objections. Next Level, and the recent and continuing enhancements, focuses on capturing this vast untapped opportunity that is being so widely ignored. Here’s how we do it.
Actions on the floor
So, what do we do about it and just how do we tap into this business?
First question is: Can we overcome the inherent objections? The answer is no.
What we can do is make it easier for the customer to do that for himherself. We will accept that this is often not a short-term exercise. The customer’s issues and fears are very real to him.
We start by making every showroom visitor welcome with a genuine and real smile. We have nothing more important than making himher feel welcome and to make their visit memorable. Since there is so much we need to share with the customer, we will immediately put aside the price issue by making himher aware of our guaranteed complete price quote policy immediately upon greeting.
If in the beginning or at any time, the customer insists on a price, heshe is introduced to a manager. We will have a price range card, so that you can provide a price range by model. Never forget there are so many issues more important than price for the customer. Our focus is always on everything we can do to enable them to overcome whatever resistance they might have.
There are always six things we need to get across. Make this your mental checklist, review yourself and ask yourself if you did everything you could from the time you greeted the customer. We will have constant training on how to best convey these six things:
1. Motorcycles are fun.
2. Ours is the brand.
3. We are the dealer who will take best care of you.
4. It is easy to buy.
5. The time is now.
6. We really want your trade.
We expect these messages to be conveyed every time.
The floor manager is present all of the time and is charged with always being a resource for you.
All customers are turned over to a floor manager before leaving the dealership. The floor manager will make a comprehensive price quote and advise the customer of finance options currently available as well as making an offer for the trade.
Do not leave until instructed to by the floor manager. The turn may often result in what we call a “return,” if the floor manager feels the customer should be shown something else by you.
We always record the visit and the customer’s name and a daytime phone number. The majority of customers visiting the showroom will not, in spite of our best efforts, make a decision to buy today. The first showroom visit is the beginning. As soon as he leaves, we will begin working at getting him back in the showroom. If we have done our job, he is a much better prospect after he leaves, than before he came in.
We accept he has issues to deal with and we are going to assist him in making a buying decision. Remember 100 percent of the people who came in want what we sell.
Our job now is to get him or her back into the dealership. When calling back, we never talk about the deal. The sole purpose of the call is to extend an invitation. We always have new product or an event at the dealership.
Sometimes it takes several calls. Sometimes it takes several return visits. What we have going for us is that, regardless of his situation or their ability to buy, people who want a bike love to talk about it.
The key is to keep them talking about it till they overcome their resistance and we have a chance to show them how easy it is to buy.
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.