Hefty PG&A sales are rising – July 24, 2006
July 24, 2006
Filed under Features
PG&A sales are one of the major profit centers in your store, as certainly evidenced by the recent J.D. Power and Associates Motorcycle Competitive Information Study for 2005.
Five years ago, 32 percent of new bike buyers reported they had spent more than $1,000 on accessories for their bikes. The latest J.D. Power and Associates survey shows that percentage has jumped to more than 40 percent.
If those statistics aren’t reflected in your dealership, then consider some tips from stores that are seeing such PG&A increases.
Duane Dreyer, president of Dreyer Motorsports, Indianapolis, Ind., said on every bike sale dealer personnel turn the customer over to the accessory department before a unit is rolled. They also have instituted a “Dreyer’s Buyer’s Club” where consumers buy a one-year membership for $29.95. That entitles them to 10 percent off all accessories for that year.
“We explain to them that if they buy $300 worth of accessories that year, the membership pays for itself,” Dreyer said.
One warning about such a program: be careful of the discount you provide. “When we gave them 15 percent off,” Dreyer said, “I was staggered by how much money we were giving away.”
Still, the idea is to “bring them back to the dealership.”
The same can be said for service work. The latest J.D. Power and Associates survey shows nearly 70 percent of consumers have their service work performed at the dealership they purchased the bike from. That’s up from 56 percent just five years ago.
Why are consumers returning at a greater rate? Probably because they’re pleased with the service department’s performance. The 2005 J.D. Power study reports that nearly 55 percent of new bike buyers give the service department the two highest marks — a 9 or a 10 on a 1 to 10 ranking. In 2000, on a 1 to 6 ranking scale, service departments were given the top marks less than 40 percent of the time.
For your PG&A sales efforts, don’t forget to let the manufacturers help. For example, Garrett Kai, senior communications specialist for American Suzuki Motor Corporation, Brea, Calif., said, “We try to include accessories in our product brochures, specifically with ATVs and cruisers, so the dealers can use them to help the customer make a choice of what products they want to buy.”
Another key to PG&A sales — doing the basics well.
Jeff Nash, president of Ducati of Dallas, preaches the most basic tenet of accessory sales: “Have things in stock. When a guy buys a new motorcycle, we offer him an exhaust system, windshield, saddlebags. If he buys accessories at the time of purchase, we’ll install them for free.”
Nash also mentioned his company’s monthly newsletter, which goes out by e-mail and keeps customers apprised of sales and events.
“We have a monthly special, where any order over $100 is 10 percent off,” he said. “Once we get them in the door, the apparel side of Ducati is a very big thing and the products are not readily available at other dealerships. We keep a good range of sizes in stock. The key is to try new things, keep it moving, keep it fresh.”
Nash also said his shop sponsors track days at the Motorsports Ranch in Cresson, Texas, and does about eight per year.
Tom Hicks, president of Southern California Motorcycles in Brea, Calif., offered some other PG&A sales strategies.
“Once or twice a year we have an apparel sale, and we have an open house two times a year with a parking lot sale,” he said. “We offer a lot of close-out items, and advertise the sale through our extensive Web site. I have three specific dealerships under one roof, but I carry no other brands of accessories. I carry everything for Triumph in the Triumph dealership, and have probably the largest collection of branded apparel in the world. I also do the same with Ducati and Victory.”
Hicks warns about throwing out too many discounts.
“We have special deals if they purchase a large amount of parts and accessories at the time they purchase the motorcycle. The problem is that too many dealers give away their margins before the customer walks in the door,” he said. “Make the customer earn his discount. We don’t give out-the-door prices. Now I’m not going to tell you we don’t discount on the floor, but we don’t give them away, either.”
So what are the keys to seeing that PG&A sales increase that’s reflected in the J.D. Power and Associates survey? Keep the basics in mind: Have it in stock, keep it moving, but don’t give away the store. psb