Q&A with Danny Phillips, Executive Vice President, Advanstar
With stops in 13 large markets across the United States, the Progressive International Motorcycle Shows are arguably the largest consumer bike shows in the country. Powersports Business Managing Editor Liz Hochstedler caught up with Danny Phillips, the executive vice president of IMS producer Advanstar, at the Minneapolis IMS, the seventh stop on the tour, to see how the show season has been and what’s to come.
1. How are things going so far with the shows?
Good. Attendance is up a couple percentage points, and we’ve had one new show, which is the Atlanta show, which is a brand new show for us this year, and we’ve got another new show in Indianapolis coming up. The big driver of our business here is the participation of the OEM. Most of the OEMs have scaled up their presence, primarily because of more new models they’ve done this year than in the past few years.
2. For being a new show, how did the Atlanta show go?
It was pretty good. Atlanta’s a good market. We were there about five years ago, and we would’ve been there in the meantime, except for date conflicts in the city, which meant we couldn’t get it.
3. How do you think the Indy show is going to go?
The Indianapolis International Motorcycle Show, which is on the consumer side, is already going to be good because most of the OEMs have already contracted for the show. For the first time we’re having a big consumer show on top of a big trade show, which will be a good thing. It’s going to be busy in Indianapolis.
4. Why did you decide to do the Dealer Expo and Indianapolis IMS together?
Indianapolis as a standalone market, I think, is 12th or 13th in the U.S. as far as a regional market in unit sales. When we actually model this business, that’s exactly what we do is we do a lot of research on unit sales, propensity to buy, growth in terms of unit sales, projected unit sales, and actually, the number of vehicles that we think we can help manufacturers sell. There are a couple of metrics that we use to actually project that, and I think we could have probably added that show four or five years ago if the economy had been a bit healthier, so this was the right time to do it, and the manufacturers liked that market. They think they can drive sales in that market. That’s why we’re there.
5. Have any OEMs increased the number of IMS shows they’re attending, or have you added any OEMs this year?
KTM is back on the tour for the first time in, I think, four years, so KTM is new, and I think they’re in six markets. Indian, Victory, Polaris group have increased their presence. Ducati have increased their presence, and BMW have increased their presence.
6. What does it mean to the IMS shows and to the overall motorcycle market that the OEMs are bumping up their presence at these shows?
It shows that the market’s healthy. I mean, the way in which we produce metrics for the OEMs is we match vehicle-buying data with bike models that are shown on site. So I’m able to go back to each of the OEMs three months, six months, nine months and 12 months after the shows and say these are exactly the number of vehicles, these are the models, new and used, that our attendees bought within the period of the show. And so that conversation makes it easier when you say, “Well, last tour my customers bought $14.7 million of Harley-Davidsons, up from $12 million the year before,” so now we’re talking about ways in which we can help the sale of millions of dollars more in units. That’s the conversation that essentially drives their involvement, their investment, their creativity about how they think they can achieve goals to drive unit sales, so it’s a straight connecting the dots between somebody sitting on a bike at the show and somebody buying a bike at the dealership.
7. Using that data, are you seeing any differences in demographics or what the customers are looking for when they’re buying?
Absolutely. There are five big components of segments that we actually focus our marketing and most of our data collection on. So there’s the core rider group. The core rider group for the first time in five years has started growing significantly, primarily because they’re either coming off five-year loans that they may have had on bikes, or credit’s freeing. Credit has been the biggest barrier at the dealer level, when somebody goes in with less than a 650 credit rating to buy a bike. And even though maybe the sort of deals that the Japanese financial arms were providing back in the day — which were nothing down and zero percent for 60 months, and it didn’t matter if you had a 500 credit rating — most of that is gone, and promotional financing is driving it. The core rider group is starting to spend more, which is driving unit sales up a little bit. So we focus on the core rider group, then we focus on the high-income baby boomers, and that’s a sort of secondary group for us. That’s an important group for us because that pretty much drives the high-end vehicles, particularly the European exotics, so that’s growing. Then we bucket in one group female and ethnic riders, particularly African Americans and Asian Americans as riders. Female attendance hasn’t been growing, and it’s a focus thing for me. The African American riding group did very, very well last year. I’m hoping we can build on that and Asian Americans. Particularly with Spanish-speakers, we’ve done a lot more with this year, so we actually do a lot of Spanish-language marketing to try to focus on them. The last group is really Gen X millennials, and that’s my big, big focus, given the aspiration of riders that are 16-year-olds, or a 22-year-old that’s on a second bike purchase — or a real bike purchase — is the big target for most of these guys, and it’s a big focus for where we invest our marketing.
8. What do these shows do for dealers, in terms of helping dealers sell bikes and getting excitement up in their market?
We connect with dealers on these shows in really three ways. No. 1, for the OEMs, we actually send out a pack to every single dealership where we have shows, that gives them point-of-sale promotions. So they get posters to put up in their windows; they get discount tickets for them to give to their regular customers; they get badges for them to come to the show. Then they can come and participate in two ways: they’ll either buy a booth from us, and they’ll retail on site, or they’ll work the OEM’s booth. And if you think of it like this, you’re a dealer, and you can either stay in your dealership and see your same 50 customers all weekend, of which 30 are the regular guys who come in each weekend, or there’s a big building over here where you’re going to have 20,000 or 30,000 people that are going to sit on a bike that you can stand next to, give someone your card and say, “Why don’t you come in on Monday morning, and I’ll do you a deal on this bike.” And that’s a really big thing because that’s us helping specifically with the transaction.
9. Do you see dealers taking advantage of that and coming to the show?
Every single OEM you see here, half of the staff that will be working in their booth are dealers — they’re dealers that are recruited. So we work with the district managers to actually recruit the dealers to come and work the booth.
10. And that happens at all of your shows?
Every single one. It would be foolish if the OEM were here, and given the OEM’s contract with their franchisees, it doesn’t allow them to retail, but that doesn’t mean that they don’t want to actually retail, so us helping them pop that transaction is really, really important. Besides, you’d be nuts if you didn’t come here; you’d be nuts. If I’m retailing a Victory bike, there’s going to be thousands of people that are going to sit on bikes that I can actually stand next to and say, “Would you like to buy this bike?”