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February 7, 2011-They increased new unit sales: How did these dealers do it?

February 8, 2011
Filed under Features

Survey looks at common links between dealers who were up in new unit sales in 2010
Region of the country didn’t matter. Neither did the level of unit sales.
Dealers across the nation (and some in Canada) saw increases in their new unit sales in 2010, some with hikes upwards of 20 percent. But where they’re located and what volume of business they’re doing were not common factors in the difference between dealers that experienced new unit sale increases in 2010 vs. those who did not, according to a survey of more than 360 dealers conducted by Powersports Business.
The majority of dealers did report decreases in new unit sales in 2010, but more than a third saw increases, according to the survey.
How did the latter party do it?
Many say one of their winning techniques was simply keeping in touch with customers. Others say events and exceptional customer service were key to closing sales.
‘We’re not going to save our way out’
Joel Erickson, owner of Moon Motorsports in Monticello, Minn., used events to draw in customers after a poor sales performance in 2009.
“It seems like after the dealers kind of took their hits in 2009, a lot of people seemed to clam up a little bit and save, save, save,” he said. But Erickson refused to give up. “’We’re not going to save our way out,’ is the way I put it to the guys.”
Instead of hunkering down as the recession was still taking its toll, Erickson charged forward for more sales.
“The one thing we didn’t cut was our promotions,” he said. “We actually increased our promotions in 2010 even more, and it really paid off.”
The dealership created new accessory discounts to get customers in the dealership. It also expanded its test ride program by creating an event for riders.
“We’ve been in business for four years, so we’ve got the luxury of having a good customer list, a deep customer list that we were able to go back to, and we really focused on that as well,” Erickson said. “We didn’t try as hard to go out and grab new people, but we really focused on people who were proven money spenders here at the store.”
Most of the successful strategies weren’t new to the dealership, but they were done on a larger scale. “We really focused on getting back to the fundamentals of retail,” Erickson said.
Jason Bremer, general manager of Grand Rapids Harley-Davidson in Hudsonville, Mich., also turned to some of the basics, including training his staff.
“We focus a lot on training, so we could have a very strong sales process and show the customers all their options,” he said.
As a former employee of industry consulting groups, Bremer was prepared to train the staff in-house, though he also brings in training companies on occasion. The biggest hurdle he had was hiring and retaining quality staff members.
“We couldn’t find enough people and quality potential people,” he reported. “We’re not looking for people with experience. We’re just looking for people that we can train.”
He’s hoping that with a 30 percent inventory increase this year, he’ll be able to double his sales staff, so he can move units better.
In addition to training staff, one of the ways he saw a 30 percent new unit sale increase in 2010 was with events. The dealership hosts two to three every month.
“Last year on the last Saturday in January, we sold 13 motorcycles and had over 3,000 people come in,” he said. During that weekend, the dealership held a Hawaiian luau for customers.
Events also spurred a 31 percent new unit increase at Leo’s South in Lakeville, Minn. The dealership hosts local shows and club meetings.
“It all helps, the more exposure you get, the better,” General Manager Wayne Bedeaux said. “Exposure is always good.”
What worked better for the dealership, though, was discounting. Its Kawasaki and BMW units moved best because of OEM rebates and discounting programs.
“We were a little more aggressive in our pricing than we had been in the past, maybe a little more willing to negotiate,” Bedeaux said.
He also catered to his customers. The dealership purchased at least 10 BMWs from other dealerships to sell to its customers. Bedeaux has found little touches like that have become expected and make a big difference in sales success. “We’ve been working very hard on that for years, but I tell my people everyday that it’s the most important thing in this market. It’s the new normal. It’s not just our industry, it’s everything. All retail business, customer service is the most important,” Bedeaux said. “People are expecting what used to be exceptional customer service, they’re expecting that as the norm.”
Past customer service experience at Joe’s Cycle Shop in Dayton, Ohio, brought former customers and their friends into the dealership in 2010, increasing its new unit sales about 8 percent. “Mainly, we’ve got such a good customer base that a lot of it was word of mouth,” Vice President Joe Seyfferle said.
The dealership cut down on its advertising last year, but used e-mail blasts and follow-up phone calls to bring customers in. In 2011, the dealership also is going to increase its number of events in the hopes of increasing new unit sales again.
Seyfferle, Erickson and Bremer all expect their new units to sell even better in 2011 than they did in 2010. Erickson’s plan is get more customers in his dealership and on test rides, to show them why they should spend their money on powersports equipment.
“I guess for me, it’s always been reminding people why they ride in the first place. What made you buy a motorcycle seven years ago in the first place?” he said. “There’s a lot of competition for the powersports dollar right now. You go pick up an iPhone with an Internet plan, and there goes your ATV payment. We’ve got to put butts on seats and remind them this is really fun stuff.” PSB

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