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No mannequins, few accessories hamper sales

Gart Sutton, Columnist
November 28, 2011
Filed under Columns

Retail Remedies

These articles recap some of the opportunities uncovered by our GSA Powersports Consultants during actual consulting visits. These are followed by recommended actions that address these opportunities. Our goal is to provide you with ideas to help improve your dealership.

Dealership details
This family-owned multi-line dealership started as a used motorcycle business more than 20 years ago. The owners soon began acquiring additional dealerships in surrounding cities, purchased the current location and consolidated the other stores into this dealership a few years later.

The dealership sells more than 1,000 units per year. It has a local population of just less than 100,000, and draws from nearby towns and larger metro areas. The facility is made up of multiple buildings that house the main dealership, P&A and additional wholegoods inventory.

The dealership is struggling with profitability. The purpose of this engagement was to complete a high-level total store analysis and develop action plans for improvement in all departments with a focus on the service operation.

Part 3: Our GSA Consultants report on their analysis of the PG&A departments.

PG&A departments
The designated parts manager has a long history in the sport. He started riding as a child, and has been a rider and racer for many years. He has tech experience, attends specialized powersports DMS and management training schools and participates in multiple OE online training programs.

However, he does not perform the duties of a typical parts manager. One of the owners reviews every order he creates. He does not have any observed management authority. He might respond well to increased responsibility and accountability for this department.

There are no daily huddles, one-on-ones or weekly or monthly staff meetings. The designated manager is not involved in developing written processes, monitoring the inventory valuation and obsolescence, running the slow and non-movers reports or tracking profitability. There are no individual goals, performance tracking or incentives beyond their commissions for P&A sales.

P&A are being discounted to sales and to service. Since this is the case, the real margins for this department are better than they show. Conversely, the margins for sales and service are even worse than indicated. There is a special order procedure that requires a 100 percent deposit, but it is not being applied consistently. However, if the item is not picked up within 14 days, special order parts are returned to the supplier.

Although there is a policy against it, techs pull their own parts on occasion. This tactic not only results in a loss in service productivity, but often creates accuracy issues for the parts department. This situation needs to be addressed ASAP.

There were relatively few displays of accessories on the floor. There were no mannequins with riding gear on display. There were no theme or lifestyle displays with units included. There were few units displayed with accessories installed.

These types of displays will trigger visualization by the consumer leading to mental ownership. In addition, many ATVs and UTVs are sold specifically because the attached accessories are what the customer wants or needs. This is particularly true of customers such as those in the dealership’s nearby farming communities.

Action items
• Eliminate access to pulling parts by service techs.
• Attend weekly manager meetings and review the flash report (provided by owners).
• Provide goals for sales to sales staff. Develop incentives/rewards to drive performance. Provide frequent performance-to-goal status updates.
• Display more clothing and accessories. Accessorize more units to improve exposure and reduce price matching.
• Develop theme and lifestyle displays in the showroom to improve customer visualization of use of accessories and clothing as well as units.
• Sell P&A to sales at retail.
• Put all processes in writing.
• Establish a single, defined “bargain” area for P&A close-outs and specials.
• Implement a more consistent special order deposit process.
• Conduct performance reviews of staff twice a year.

Gart Sutton has been a leading provider of on-site dealer consulting, dealer 20-groups, online financial composites, accounting rescue services and OEM and dealership training solutions for more than 30 years. For additional information on these services, visit www.gartsutton.com.   

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