Consumers reveal buying tactics to J.D. Power & Associates
June 7, 2004
Filed under Features
By Bill Stermer Contributing Writer
This is the second of four articles regarding the J.D. Power and Associates 2003 Motorcycle Competitive Information Study (MCIS).
MCIS questionnaires were mailed in October of 2003 to 48,456 motorcycle owners who had purchased a new street or dual-sport motorcycle between September of 2002 and May of 2003. The questionnaire included 49 often multi-part questions about motorcycles, plus eight about helmets and 10 demographic questions. Names were selected at random by J.D. Power and Associates from lists furnished by each of the manufacturers and independent registration sources. Each questionnaire included a $1 bill as an incentive; alert and reminder postcards were mailed a few days before and after the survey arrived, respectively. J.D. Power received a total of 11,347 usable responses (a 23% response rate).
Perhaps the single most valuable bit of information a dealer could have would be to fully understand the motives that cause people to buy new motorcycles from specific dealers. What information sources do buyers use for research, and how does the Internet factor into the equation? The important factor is that each and every respondent here actually followed through and bought a new motorcycle, so this is not speculative information. Here we’ll tell you what buyers of new street and dual-sport motorcycles last year thought of their selling dealers overall.
Buyers said they used a variety of sources when they were asked what information sources they used while shopping for their new motorcycle.
These include Dealer Personnel (44.6%), the Internet (39.8%), Friends/relatives (39.1%), Magazine article/guide (37.5%), Product brochure (33.6%), Other riders (33.3%), Display at show/rally (18.4%), and Advertisement (14.3%).
While you cannot control many of these factors, if you hire your personnel carefully and train them well while maintaining a good Web presence, you’re controlling the top two sources people use to make their buying decisions.
When asked how many hours per week they spent on the Internet for personal use, only 17.9% of new bike buyers reported that they did not use the Internet. Here, 56.5% reported that they used it three or more hours per week. While 82.7% of the respondents had Internet access, only 39.8% of them reported using it to shop for their new bikes. What’s interesting is that in the very first MCIS in 1998, only 17.1% of respondents said they had used the Internet to research their motorcycle choice.
Of those having access to the Internet, 75.4% reported looking up the manufacturer’s product features and specs, 54.5% obtained information about aftermarket accessories and parts, 42.2% were interested in pricing/financing, 39.1% wanted dealer location/promotions, and 34.1% looked up independent product reviews and ratings. Only 11.3% reported getting no motorcycle shopping information from the Net.
The prices buyers paid for new street and dual-sport bikes clustered in two ranges. Exactly half of all new bike buyers paid up to $11,000 for their new machines with the $7,000 to 8,000 range (9.9%) being most popular. Only 10.2% paid from $11,001 to $15,000. The $15,001 to $20,000 range, however, accounted for 27.4% of sales, very good news for dealers.
Asked how much additional money buyers spent at the dealer accessories, extended service contract, riding gear, etc., fully 76.6% spent additional money on these items, an increase of 3% from last year’s figure. Specifically, 58.6% bought Accessories, 34.7% bought Riding Gear, and 29.1% (an increase of 3.6%) picked up an Extended Service Contract.
As for the amount they reported spending on Accessories, 13.5% spent $250 and under, and another 20.1% spent $251-$500. Only 17.5% spent $751-$1,000. The really significant figure is that 41.0% reported spending more than $1,000 for additional accessories!
Here is a breakdown of what new bike buyers polled spent on associated purchases, showing how dollar amount categories in 2003 differed from the previous year’s MCIS:
$250 and Under 17.7% 13.5%
$251-$500 26.4% 20.1%
$501-$750 7.6% 7.9%
$751-$1,000 16.6% 17.5%
More than $1,000 31.8% 41.0%
The good news in the above table is that the percentage of riders spending $751 or more on accessories increased from 48.4% to 58.5%.
Would you buy a new car without driving it? Would you buy a new pair of shoes without trying them on? Would you buy a new motorcycle without a test ride? The answer to that last question is a resounding yes, as only 16.7% of respondents were given a test ride, yet 100% of them bought a new motorcycle.
When asked what the main reasons were for buying their bike at the dealership chosen, four answers were checked by more than 40% of respondents, and one by 60.1%. The top reason was “Had the motorcycle (color option, etc.) I wanted.” The other top factors included: “Conveniently located” (46.8%), “Hassle-free negotiation/made me feel comfortable (42.4%) and “Best deal/lowest price” (41.6%). In short the buyer went to a convenient shop knowing what he wanted to buy, and got a good price with no hassles. Sadly, only 26.9% checked “Past experience with dealer,” and 24% said it was “Dealer reputation.”
Respondents were then asked to write a number next to the reason that most influenced them to purchase from their dealer of choice. In this category, only two reasons were listed by more than 20% of respondents, and only three others by more than 10%, but collectively they comprised 88.1% of responses.
The top answer was “Dealer had the motorcycle (color option, etc.) I wanted” (26.5%), followed by “Best deal/lowest price” (22.4%). Other factors mentioned in double figures included “Past Experience with Dealer” (15.4%), “Conveniently located” (13.1%) and “Hassle-free negotiation/made me feel comfortable” (10.8%).
“Using a 1-10 Scale, where 1 is Unacceptable, 10 is Outstanding and 5 is Average, please rate your selling dealer on the following:”
“10-9” “8-7” “6 or below”
34.0% 35.0% 31.1%
Availability of motorcycle
34.1% 30.5% 35.5%
Courtesy and friendliness of sales staff
57.5% 23.6% 18.9%
Product knowledge of sales staff
54.1% 26.4% 19.5%
Honesty and integrity of dealership personnel
52.8% 25.0% 22.2%
The numbers in the table above are very similar to those from 2002 with the exception of the apparel/accessories category. In 2003, numbers were 3.3% lower in the “10-9”
category, while those rating their dealers at “6 or below” increased by 3.5. Evidently,
our weak points are our ability to deliver apparel and accessories, and to have the
proper bike inventory.
We can all be pretty happy that the majority of dealers were ranked nine or 10 for courtesy, product knowledge and integrity. Very few buyers gave their dealers low marks, but then again if they didn’t like the dealer they probably didn’t buy there.
Two-thirds of buyers wished for a better selection of bikes and accessories. The lesson is that if you have the product, you’ll have a better chance of selling it.
Asked about their overall experience with their dealership of choice, the top three numerical ratings were a 10 (35.8%), a 9 (21.3%) and 8 (17.2%). Everything else was listed in single digits. Hey dealers, 74.3% of respondents rated you at eight or better out of 10. Well done!
Respondents were asked to check one of three boxes when queried about how their overall experience at their dealership of choice compared to their expectations. Only 8.7% checked “below expectations,” while 56.8% checked “met expectations” and 34.6% checked “above expectations.” While we don’t know what buyer expectations were originally, only about a third of dealers exceeded
Part three of this four article series will deal with motorcycle purchases and the services departments that work on the units.
Headquartered in Westlake Village, Calif., J.D. Power and Associates is a global marketing information services firm operating in key business sectors including market research, forecasting, consulting, training and customer satisfaction. The firm’s quality and satisfaction measurements are based on responses from millions of consumers annually.
For more information about the MCIS
contact Todd Mundorf, Director, Powersports Research, in the Troy, Michigan office, 248/267-6800. psb