Destination Cyclesports – Kerrville, Texas – Nov. 29, 2010
November 29, 2010
Filed under Power Profiles
3341A Loop 534
Kerrville, Texas 78028
Bob and Sarah Kee
Bob Kee has been a businessman, with his wife Sarah as his partner, for several decades, but he didn’t get into the industry until 10 years ago. The couple begin an automotive service business in 1976 in Houston before moving to Kerrville, Texas, full-time in 1986. “I got an itch and decided it was time to go back to school, and I earned an MBA 20 years after graduating from college, and we got into motorcycling after that,” Bob Kee said. After he earned his master’s, Bob stumbled upon a powersports dealership after he was riding his motorcycle to San Antonio one day and realized how inconvenient it was for him to ride an hour to the nearest dealership. He researched why the dealerships in Kerville had closed in the mid- to late 1990s and decided he could succeed. “I’d kind of explored why they’d gone away and what I’d do differently,” Bob Kee said. The couple, who own the dealership together, opened their new business on the same property as the auto service business in October 2000, with Yamaha as their first brand. Later they picked up Suzuki and then Lehman trikes. “By 2004, it was clear that the motorcycle store was going to do fine, so we closed the automotive business,” Bob Kee said.
Looking into the future, Kee’s primary concern is that he hasn’t heard of any new blockbuster products being developed. “I don’t see the next new big deal,” Kee said. “We’ve had big deals historically year after year in the past 30 years. We transferred from the three-wheeler to the four-wheeler. We created this side-by-side market. We created watercraft from noisy, blue-smoke, two-stroke to quiet, fun, four-stroke machines.” But no news has been delivered of the next innovative product, he said.
The hottest selling products in Kee’s dealership are preowned motorcycles. “I would say used bikes under $5,000 is my No. 1 mover,” he said. The sales aren’t solely because of the recession, but by dealer design. After studying his 60,000-population county of mostly retirees, Kee decided he had to reach out for extra business. “You can only sell so many bikes locally,” Kee said, “so we looked at it and said the best way to build a book of business is to sell used and advertise online and draw customers in from out of the area.” So far the plan, implemented after the first year of business, has worked. “We sell 2.2 used for every new one, where the industry benchmark that you kind of strive for is 1 to 1, so that has given me a little more to use in the downturn,” Kee said. What’s essential to a good preowned business, he said, is having a large used inventory.
CUSTOMER BUYING TRENDS
In Kerrville, Kee has seen the sport bike market drop because younger customers cannot get financing. “In the fall of ’08, we saw our finance sources being willing to write 620-625 Beacon scores,” he said. “Then for six months from the fall of ’08 to spring of ’09, if we weren’t sending in 700 or 720-plus (scores), we weren’t even going to consider them being written.” However, the recession has had little effect on the luxury bikes.
PARTS AND SERVICE
Destination Cyclesports’ service staff consists of three techs, including a new Harley-Davidson certified technician, a service manager, a service writer and a lot employee. The group keeps busy, as long as the weather is comfortable and miles are put on customers’ bikes. “Service has been really consistent this year,” Kee said. “Last year in 2009, I think the thing that probably hurt our business essentially as much as the economy was the heat. We had 46 days in 2009 that were over 100 degrees.” What keeps customers coming back for service is the dealership’s policy of putting customer needs before profits. “Having come from 25-plus years on the auto service side, we really understood how to make people happy,” he said.
PROMOTIONAL HOME RUNS
Kee’s most unique and successful marketing campaign was one created in-house after the dealership saw service visits drop because of hot weather. Kee’s son created a list of the dealership’s top 50 customers with high mileage and frequent service visits. “We invited those 50 riders to compete in a mileage contest in a three-month period, and whoever put the most amount of miles on their bike got a free set of tires on their bike,” Kee explained. The motorcyclists jumped on to the contest, becoming very competitive. “For a couple hundred bucks worth of rubber, we had a promotion we talked about, they talked about and others talked about,” Kee said.
WORDS OF ADVICE
“I guess the biggest advice would be to be very careful with personnel expense,” Kee said. “Personnel expense is the easiest to add and the hardest to cut. We’re so tempted when we get busy to say we need new staff when we reach the bubble … and then we have to let staff go, and it’s so much harder to let staff go.” PSB