Dealers often believe that the only way to get market share is to lower prices and give up margin. But that’s not necessarily true, Shenk notes. “Rule of Thumb No. 1 in evaluating dealership performance has always been that if your sales are equal to 100 percent of the sales in your retail market area, from customers in your market area, of the brands you represent, you are doing very well.”
What that means: If all of your sales from customers living inside and outside of your market area equal all dealers’ sales from customers in your market area, you’re doing well. If all dealers sell 100 units in your area and you sell 100 units living inside and outside your market area, you’re doing well.
“That would have us strong at 99 new and used motorcycles, and we are over 50 percent above that at 152 for 2012,” Shenk says. “And…35 of the 99 new and used motorcycles sold were Honda, which is a brand we do not represent with new product; we sell only used Honda.”
Rule No. 2, according to Shenk, is that if you’re doing well on Rule No. 1 but your margins are low, you’re not getting customers in your market area. That means that you’re not servicing your customers, and soon your Parts and Services revenues are going to fall off.
Service revenues were off more than $50,000, dropping to $134,395 from $184,416 in the first five months of 2012 compared to the first five months of 2011.
Part of the problem in Service during May had to do with a change in managers that resulted in changes in the way that procedures were implemented.
Last year, under the previous manager, the Service writers were calling former customers and getting them in to do service. They were even going to events and riding areas to pull in customers. That’s not happening this year.
“We’re not proactively speeding up [customer service schedules] like we were last year,” Shenk notes. “We’re not doing it this year, and we’re not selling as much maintenance and accessories as we were last year.”