PowersportsBusiness.com
You will automatically be redirected in 10 seconds. Click here to proceed.

Social Media

Customer loyalty a game-changer

0414Focus-SPHD a-610x300

Dave McMahon, Editor in Chief
March 21, 2014
Filed under Features, Top Stories

MVP’s one-time purchase of $89.95 has rewards at St. Paul Harley-Davidson

As the founding dealership of the Motorcycle Value Program (MVP), St. Paul Harley-Davidson takes a keen approach to ensuring that its customers receive the best motorcycling experience possible. And that’s only the start.

General manager Kurt Harder developed the program after discovering in 2000 that there were no similar offerings available to dealerships. So he and his team at St. Paul H-D collaborated on the program, and launched MVP at the dealership in August 2001.

In 2004, it began to franchise the loyalty and business solution concept to select dealerships in the U.S. Now with 22 locations, more than 100,000 MVP members globally enjoy the benefits of MVP, including more than 18,000 that are members of St. Paul MVP and Wild Prairie MVP, its sister store located in Eden Prairie, Minn.

Harder continues to oversee and manage MVP, Inc., where he selects franchisees and provides initial training at MVP stores. At St. Paul Harley, which has a 54,000 square-foot operation alongside Interstate 94, sales are dramatic. In fact, the store ranked first among Harley dealers in its district in new motorcycle sales, and last year it received Power 50 honors from Powersports Business.

MVP, however, gives St. Paul Harley the edge it had sought since owner Tom Giannetti bought the store in 1999.

“When Tom became the owner he quickly realized that he had a HOG chapter that was growing by leaps and bounds and had over 2,000 members,” Harder told Powersports Business. “He also realized a lot of the members were simply members because the dealership had offered them a 10 percent discount on in-stock parts, accessories and general merchandise. But that doesn’t necessarily truly bring you loyalty.”

In addition to keeping its existing customers, the staff wanted to find ways to attract new buyers.

After strong sales of new and used bikes, St. Paul Harley-Davidson was named a Power 50 dealer in 2013 by Powersports Business.

After strong sales of new and used bikes, St. Paul Harley-Davidson was named a Power 50 dealer in 2013 by Powersports Business.

“We talked about all kinds of different ways to create loyalty. We decided that it was such an important endeavor that we not only create loyalty, but most importantly, differentiate ourselves from every other dealer in our market,” Harder said. “When you think about what we do, we get all of our products from all the same places at all the same prices. We buy the motorcycles from the Motor Company. All dealers buy from the same places. It’s not like any of us truly have a wholesale pricing advantage. OK, now what it boils down to is: The consumer just needs to make the decision on which dealership to spend their hard-earned cash. And they’re going to make that the decision based on the value that they feel they’re getting for their hard-earned dollars. If all dealers are the same, they’re singing the same tune and doing nothing really differently from each other and the consumer thinks ‘I’m going to get the same mediocre experience at all these dealerships, so whoever is the cheapest price, I’m in.’ A company can’t thrive for years and years and years with that philosophy. But they can thrive if they treat the customer with dignity and respect, and differentiate themselves from all the rest of those dealerships. So we combined the differentiation of the experience at St. Paul Harley into a loyalty program where we truly reward our customer for enjoying the sport of motorcycling. Because we honestly believed when we developed the program, and we still do today, that that is the key to it — if we don’t keep them riding, none of this is needed. They won’t need new clothing, a paint job, wheels, service or most certainly a new bike.”

Unlike buying an automobile, Harder knows that the motorcycle buying experience has to separate itself.

“An automobile is a necessary evil. I like to think a Harley is, too, but a lot of people will debate that with me! A Harley is not only a motor vehicle, it’s a route to new friends,” he said. “We decided that experience was so important that we wanted to make MVP a cornerstone in the fundamentals of the way that we conduct business every day. The concept of loyalty isn’t new, but our program was the first and continues to be the best way to find, cultivate and retain customers loyal to our dealership brand, and not simply the Harley-Davidson brand.”

Signing up

Customers can sign up for MVP with a one-time payment of $89.95. The enrollments are sold in every department, with Motor Clothes and Parts typically leading the pack. The benefits reciprocate at the 20 other MVP dealerships throughout the country. Dealerships pay a monthly franchise fee to operate as an MVP store.

“When we decided to create the franchise, we went into a specific market and found the one dealer, the very best dealer that operates as close to a mirror image as we do, and we selected that dealer,” Harder said. “We only allow one dealership per market. If multiple dealerships have it, it loses its panache.”

St. Paul Harley-Davidson now has Motorcycle Value Program (MVP) franchisees at 20 different locations.

St. Paul Harley-Davidson now has Motorcycle Value Program (MVP) franchisees at 20 different locations.

Still today, Harder describes the franchisee process as “highly selective. If ABC dealer calls and says ‘We’re interested in this,’ we’ll go into their market and do a retail evaluation of all the stores in that market. Then we go in and rate the cleanliness of the store and attentiveness of the staff. We’ll even go so far as to evaluate the bathrooms, because females generally speaking are the ones that give the nod to males to buy these bike, and if you have a lousy, dirty women’s bathroom, that’s enough to send them packing to another store. And I totally understand.”

Harder and his MVP staff train MVP franchisees, and those dealerships are visited by an MVP staff member twice a year. It’s the hands-on approach that makes the program equally effective at the MVP franchisee dealerships.

“We work with them very closely to help them change the face of their business by leveraging the Motorcycle Value Program,” Harder said.

There are 18,000 local members between the two stores in the Twin Cities market, and an additional 115,000 members with the 20 franchisees nationally. Associates who sell the most enrollments are recognized appropriately.

“We have goals for each department,” Harder said. “We recognize those that are excelling in enrollment of customers into MVP because through that enrollment, we get the opportunity to direct market to individuals with specific product offerings. The information we get from a customer from MVP is not the information we get at the point of sale.”

MVP allows the dealership to quickly separate the casual customer from the loyal customer, monitor their buying habits and build program benefits that are tailored specifically for them. With MVP customers, the dealership knows:
• what they buy
• when they buy
• how much they spend
• their visit frequency
• their spend per visit
• their residual and add-on purchases

The MVP provides structure to allow the dealership to offer a savings off retail pricing to MVP members based on their relative loyalty, which is measured with MVP points.

“MVP members are far more active in the dealership, spending thousands of dollars more each year than non-MVP members. By zeroing in on our best customers, MVP has provided our dealerships with a focused approach to customer acquisition, retention and revenue growth, helping us preserve margins through the creation of targeted campaigns that provide value to both the dealer and the member, a true ‘win-win’ for both parties,” Harder said. “We know who our best customers are and use the information housed within MVP to keep them coming back year after year.”

 

Comments

Feel free to leave a comment...
and oh, if you want a pic to show with your comment, go get a gravatar!