Jul. 13, 2009 – Bold Idea No. 3: A guarantee to drive sales and healthy profit margins
July 13, 2009
Filed under Features
Grand Prix Motorsports, a metric dealership, has expanded on a marketing idea from Harley-Davidson to generate interest among first-time buyers.
The multibrand dealership, located near Denver, this spring started “The Grand Prix Guarantee,” a program that allows consumers to buy an on-road motorcycle between 250cc-650cc and then trade it back in at full MSRP for a higher-displacement bike a year later.
“Right now there is a lot of people coming into the motorcycle segment — New riders and new-again riders who don’t want to jump on to a large bike,” said Tony Hayter, Grand Prix Motorsports’ general manager. “So what this does is allow them to get a smaller unit, get their feet on their ground and get to riding.”
The program is similar to what Harley-Davidson did earlier this year with its Sportster trade-up program. That program allowed qualifying Sportster riders to trade up to a Big Twin or VRSC.
The Grand Prix buyback program pertains to any motorcycle brand they sell. It stipulates that the customer must bring back the new motorcycle they buy from Grand Prix within a year, that it must be traded for a larger-displacement bike and that at the time of the trade-in, the used bike must not have more than 4,500 miles on it. Any damage or abuse of the bike also would be factored into the amount the customer receives back toward the larger-displacement bike.
“It’s been very well received,” Hayter said of the program. “A lot of people are coming in to buy.”
Grand Prix made the program the center of its spring-time advertising, using radio and other media to promote it.
The program also has proved successful dealing with some price-sensitive shoppers. Hayter said the program is offered to every qualified consumer and it has at times been accepted — with its full MSRP sticker price — by shoppers who were originally looking to negotiate.
“A pretty high percentage forgo (negotiating) to go with the guarantee,” Hayter said, noting that many consumers understand the likelihood of coming in the following spring looking for a bigger-displacement bike.
The only issue Hayter could recall about The Grand Prix Guarantee program, which started in March, is a few customers who purchased bikes before the program started were upset they weren’t given a chance to do the same.
“We’ve actually grandfathered in a couple, but nothing major,” he said. “It’s pretty neat to put together a program and see people actually say, ‘Wait a minute, I didn’t get that.’”
— Neil Pascale