Be the master of your own domain

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An old Chinese proverb advises, “It is better to light a candle than curse the darkness.” Good advice all around. It’s pretty easy to feel like a victim of circumstances, particularly when someone brings up the state of the economy as a reason for things not going well economically for them, their company, or someone they know.

Well, it looks like the slide in sales that began in 2007 is at least abating. Depending on whose numbers you’re citing, about 82 percent of the work force is still employed. People are still riding and someone, somewhere, is selling motorcycles.

I was at Southern California Motorcycles’ open house in early April. The Brea, Calif., dealership is owned by my friend of 30 years, Tom Hicks. He opened the dealership 11 years ago with Triumph, and then added Ducati shortly thereafter. A couple of years ago he added Victory, then Polaris and has since tacked on a pre-owned bike department.

The dealership isn’t in the best location. It’s on a main street, but is tucked away 50 or 60 feet away from the street, and it’s easy to miss the driveway if you’re not looking for it.

Yet Tom has somehow thrived and grown over the years in spite of his location.

On this particular day, the weather was chilly, and open house traffic was slow. There were 10 or 12 vendor tents, free hot dogs and soft drinks, and of course, coffee. In spite of the less-than-stellar conditions and results, Tom was, as usual, upbeat. I asked him how business was going.

I wasn’t quite ready for his response: “December 2010 was the best December I’ve ever had, and the fifth best month I’ve ever had.”

So the recession hasn’t impacted your business, I asked. Tom’s response? “Some dealers will let the economy dictate their business. I’m going to dictate how business is for me. I’m proactive, not reactive.”

His response smacked me in the face. I had expected him to tell me that business was OK, but that things were slow and sales were tough to come by, that the recession was impacting financing, and the usual list of reasons often cited for sales not going as well as one would like.

SERIOUS CHANGES
Tom related that two-and-a-half years ago his accountant told him that the way things were going, with declining sales and declining profitability, if they didn’t make some serious changes in the way they did business they would not survive another year.

Tom proceeded to analyze each of his 11 profit centers, reducing each to its most elemental parts — manpower, resources and costs. He then restructured each department with an eye to getting the biggest and best bang for the buck from each area. He started by cutting salaries for himself and his managers, leaving the compensation of his non-managerial employees in place, but with the caveat of, “don’t come asking me for a raise.”

Many of you have likely gone through this process of analyzing, evaluating, cutting, and changing, and have seen only minimal results. I don’t think Tom is a genius, but he did one thing many of us don’t — he didn’t cut back on his marketing dollars. Sure, he analyzed his marketing plan the same way he analyzed the other aspects of his business, but instead of cutting he shifted funds and stepped up the game in areas that he hadn’t been too active in before.

Tom does all the basic stuff — open houses, a Halloween party, and a weekly bike night — but he also promotes on a regional level. He has a presence at the Progressive International Motorcycle Shows stop in Long Beach, Calif. He has an exhibit at the Laguna Seca MotoGP, about 300 miles from his store. When the AMA Superbike schedule came to Irwindale Speedway, he was there. More than that, his exhibits are active. He’s got gear and product on display and attractive people handing out brochures and engaging passersby.

SOCIAL MEDIA
The dealership has a website and a weekly newsletter. But where Tom stepped up his promotional game was in social media. His business has a Facebook page and a Twitter account, and he’s hired a person to do nothing but keep things updated and responsive.

This, he will tell you, has been the big game-changer. The results weren’t realized overnight; there were times when things got pretty precarious. He’s had to lay off staff and do a lot of those unpleasant things that are sometimes necessary for survival.

So how well have things worked out for Southern California Motorcycles?
• January 2011 was the best January he’s had since opening his doors.
• February and March 2011 are the second-best February and March he’s ever had.
• His used bike sales are up 40 percent, Ducati sales are up 175 percent, and Triumph sales are up 10 percent.

While this success story has focused on Tom, it really isn’t about him. It’s about having the determination to not allow yourself to become a victim of current circumstances. In a way it’s about the old 20:80 rule — 20 percent of the dealers do 80 percent of the business. If that’s still true, what side of that equation do you want to be on?

This story originally appeared in the Dealernews June 2011 issue.