GB: Recently, we have seen service-oriented dealers do well. Is that an area that you think franchise dealers should expand on right now?
MB: The best run dealerships have always placed lots of focus on service, both as a profit center and a marketing tool. Keeping customers happy and continuing to come back to the dealership is essential. This isn’t a new idea by any stretch. But during the tremendous growth years, especially 2000 to 2006, I think some dealers simply didn’t focus as much on this area.
GB: If you had one piece of advice for dealers right now, what would that be?
MB: As tough as the market conditions have been the last two years, I think it’s imperative to keep the dealership atmosphere positive and fun. Of course, there’s no substitute for great management, a strong team and a well-run business, but customers need to feel the excitement and passion for the sport when they visit a dealership.
Mark Blackwell: Greg, LeMans touches the majority of U.S. powersports dealers. What trends have you seen over the last year among dealers showing success in these challenging times?
Greg Blackwell: In a lot of cases, the strong have gotten stronger and the weak have gotten weaker. Overly (or very) conservative dealers have been hurt the worst. A lot of dealers have run their inventory levels down to nothing and their attitude has been ‘we’ll buy it when someone comes in to order it.’ That inevitably drives consumers to another dealer or the Internet. Dealers who have managed a sellable stock have been able to maintain or even increase their sales volume because they can make the sale exactly when the consumer tries to buy. We have also seen a lot of dealers shift toward more service business to make up for the lost sales.
MB: With new unit sales down, we hear that people are fixing up and riding their existing motorcycles and ATVs longer. How has this affected the product categories?
GB: This is very true. We have seen the need items grow, and the want items slow down. Tires, batteries, brake pads, chains and belts, rods, pistons, oil, etc. repair items have done very well for the last 12 to 18 months. We have seen a lot of dealers focus more in the service area, and actually grow their business. New unit buyers tend to buy the want items, and with the drop in new unit sales, there has been a downturn in want items. Also, dealers used to be able to package aftermarket products into the financing of a new unit. Those days are gone.
MB: Local-level marketing appears to be changing just as quickly as marketing on the national and regional level. What trends are you seeing across your dealer network in terms of successful local-level marketing?
GB: It’s kind of like all bets are off. Some traditional marketing still works, but dealers have been forced to find new ways to attract customers on a local level. Developing a website, co-marketing with other local retailers (in different industries) or advertising in new unthought-of areas or media for instance. Also, turning the dealership into a happening place. Dress it up and advertise it. Do a Valentine’s Sale. Do an Easter Sale. American consumers have been very tight-fisted with their money. You have to really give them a reason to buy, and dealers who have done that on a local level have had success.
MB: How has the Internet affected how dealers operate their businesses?
GB: Dealers need to quit telling themselves that everyone buys on the Internet because of price. Most of them are buying on the Internet because of convenience. When a consumer is standing in the dealership looking at a particular helmet, and the dealer says, “I don’t have your size but I can order it.” The consumer thinks, “Why should I order it from you when I can get it on the Internet quicker?” The dealer did not have the product, so the consumer went somewhere else. You don’t order your milk at the grocery store, do you? I also see smart dealers using their brick-and-mortar location and the Internet, like Best Buy does. Create excitement with your site, and then drive the consumer to your location. This is also a great way to cultivate new customers. (continued)