Strong local economy presents good, bad issues

Canadian dealership Rec-Tech profits from affluent neighborhood while struggling to staff store

From the outside, it appears Rec-Tech Power Products in Lloydminster, Alberta, has it made. Its local economy is on an upswing, leaving many locals with disposable income for the powersports vehicles, boats and outdoor power equipment the dealership sells.

“A guy with a Grade 10 education can get a job driving a truck hauling oil and can get $25-$30 per hour,” Rec-Tech president Alan Lorenz explained. 

That same truck driver is spending two weeks on the road, dreaming of the ATV he’d like to hop on as soon as he’s back home. And soon he’s in the dealership spending his money. That leads Rec-Tech to be so busy that its salespeople rarely have to follow up with prospects or former customers. 

So what’s the downfall? With high-paying jobs being offered in the oil fields to those with little or no experience, Rec-Tech is competing with other area businesses for job prospects, making it difficult to hire or retain anyone. 

“It’s a funny market. If we didn’t have that big money in there, that guy wouldn’t be buying that $20,000 vehicle with $15,000 in accessories,” said Lorenz, whose dealership was named an inaugural member of the Powersports Business Power 50 in 2013. “But the guys that are doing it are also looking for staff themselves, so in the same way that they’re likely to buy the unit and support your dealership, they’re just as likely to look at the guy working on the unit and hand him a business card and say, ‘Give me a call.’”

Problem solving

Lorenz knows he’s missing out on profit in unit sales, the PG&A department and service, but staffing and the size of his 3,500-square-foot dealership are the biggest factors holding him back. 

The size issue is being addressed, as Rec-Tech is currently undergoing an expansion that will nearly quadruple the store’s footprint by Christmas. 

As for staffing, Lorenz has started looking internationally, namely to Europe, for top hires. For residents of certain areas of Europe where the economy is struggling, Lorenz’s pay rate is appealing, more so than it is to Lloydminster’s locals. He already has some solid leads from Europe and plans to make hires soon. Rec-Tech has tried seeking help from U.S. candidates for its comparatively high-paying positions, but those hires have so far been stopped by the paperwork required to move to Canada for a job. 

“For some reason, it’s a little easier to pull guys out of Europe than the U.S. in terms of paperwork,” Lorenz said. 

Once employees are hired, they’re certain to find a hospitable workplace.

“Everyone that works here, we’re all friends, and if anybody here is having a bad day, everybody knows about it, that’s just how it is. Everyone has families, and everyone knows their families, and we’re all family,” Lorenz said. 

In 2012, the dealership began implementing staff days, in which employees can get out of the office and demo some of the product. Lorenz is hoping to make those into monthly events at which the dealership provides the units and a main course for lunch, while the employees bring side dishes to share. As of mid-July, the dealership was looking for dates to bring employees to the lake for a PWC staff day. Employees are also offered a flexible work schedule, personal access to demo units and use of the company truck for moves. 

Lorenz also believes strongly in training and helping employees better themselves. All salespeople are sent to sales training from the Alberta Motor Vehicle Industry Council. They also brush up with online courses and webinars, and each employee attends one dealer meeting per year. Technicians attend any factory training available, and service writers are sent to Spader Service Management training. Parts employees go to Spader Parts and Accessory Management courses. Also, they’re trained by OEM and aftermarket reps during dealership visits, and they attend dealer meetings. Lorenz and his office manager Nora Roberts have attended Spader Total Management 1 and 2.

“I’d send everyone to training all the time, if we could. The more you learn, the better you are,” Lorenz said. 

However, with job turnover, he has become cautious when it comes to investing in an employee’s training. He recently sent one employee to Spyder training only to have that staffer quit shortly after. But he does still see the value in investing in the right people, recently starting a program to groom upcoming techs. 

“We’re trying to grow into our own mechanics. If they’re going to stay with us, we’ll support them through school,” he said. 

Sales

Though 2014 has started slow due to uncooperative weather, revenue has been up in recent years, as sales has been a top-performing department. Rec-Tech carries Can-Am, Sea-Doo and Ski-Doo and says the product moves well in its home country. After picking up KTM dirt and street bikes last year, Rec-Tech has seen positive growth from that brand, with all of its Super Dukes being presold. And the dealership recently added Timbersled to help extend KTM sales into the snowy months. 

“It ties in well with our KTMs. No one wants to buy a dirt bike in the winter, but maybe if you put a snow track on it [they will],” he said. 

Service has been more than busy, with Rec-Tech turning away undesirable jobs as it doesn’t have enough techs to fill the current demand. Service is a major area in need of new hires.

The parts and accessories department is well-stocked with product for vehicles from OEMs that Rec-Tech carries, along with parts from those which it doesn’t carry. After the local Yamaha dealership shuttered, for example, Rec-Tech began carrying a few parts for vehicles such as the Grizzly with a goal of boosting PG&A and service sales. 

“The customers that we do deal with are pretty happy because it’s like, ‘What? You have that?’ We all need to be teaching the customers that we carry products for all vehicles in stock all the time,” Lorenz said. He added that PG&A is a department that has plenty of potential, and he’s taking it under his wing as he believes it could double its current business contribution.

Top in customer service

Rec-Tech Power Products sees its extensive easy-to-access parts inventory as a beneficial customer service, but the dealership also takes other steps to assure customer satisfaction and loyalty. 

Before BRP sends out a CSI survey to its unit sales customers, Rec-Tech staff sits down with each customer and asks what issues the dealership can address, so as to leave each with a positive experience. 

Rec-Tech, which was awarded the Best in Class award for Customer Service at the 2013 Power 50 event, also brings an avalanche expert in each fall for a two-day training. The course costs customers $75 each, but all attendees receive a $75 dealership gift certificate following its completion. Rec-Tech also offers a Spyder demo day in the summer for non-riders, allowing them to try the roadster on the dealership’s three acres even if they don’t have a motorcycle license. Other events include a summer and a winter open house and end-of-season blowout sales. 

Good neighbor

Though Rec-Tech excels at customer service and at treating its employees well, the dealership doesn’t keep its hospitality in-house only. Rec-Tech is heavily involved in its community, sponsoring jerseys for children’s sports teams, supporting a variety of local organizations and sponsoring ATV, dirt track, snocross, motocross and vintage sled racers. 

“We still try to do just as much as we can in the community. I know our advertising expenses for in-house donations and promotions run on the high side,” Lorenz said. 

Rec-Tech is also involved in the decades-old Paradise Hill Kinsmen Quad Rally. The dealership helps organize it, marks the trail, helps with clean up and sponsors prizes. In addition to encouraging riding, the event benefits the families of sick children. 

“Any of the local ATV rallies, we try to sponsor as much as we can because that’s all of our customers. Bike rallies we do the same thing,” Lorenz said. 

The dealership also works closely with some of its competitors, a step many dealerships aren’t willing to take, but one that has greatly benefitted the dealers of Western Canada, Lorenz says. 

“We just respect each other’s territories and respect each other and work as friends — certainly not price fixing — and share product,” he explained. 

Rec-Tech’s peers often lend a hand by sharing product with each other when something is in desire from another dealership. Lorenz says he doesn’t mind working with Polaris or Arctic Cat dealerships because many of their customers are brand loyal, so they don’t overlap. The dealers also talk to each other about which types of products are moving in the area, to help each other out with ordering. 

“By working together, I think that’s probably one of the more profitable things we can do — take care of each other a little bit.”