IT'S ALL ABOUT THE BOTTOM LINE numbers, of course. So, tell me what you think of this: A direct mail/telemarketing campaign costing $5,000 to contact 1,500 customers that generates sales of 25 new motorcycles within 60 days, producing an average margin of $4,500 per sale.
If you're counting, a $5,000 investment generated a gross profit of about $115,000.
Pat Patton is owner of Rocket Harley-Davidson based in Madison, AL., near Huntsville and the huge Redstone Arsenal military base. Patton sells about 1,000 new and used units per year out of his 36,000 sq. ft facility.
Patton and a partner purchased the store in May 2003 — it had been in operation for several decades — and immediately began upgrading it, based on the experience he had picked up while running Harley stores in Florida for more than 18 years.
His basic rule of operation is to make it easy for customers to do business with Rocket. "If there's anything unique about our store," he says, "it's that we want to make things easy for our customers."
For example, Rocket will take anything in trade — cars, boats, anything. "We want to make it easy for a customer to go from one thing to another," he says. "We're considered innovators here, but this was routine for us in Florida."
Patton works with Jose Juarez of Victory Solutions, a 4-year-old Florida company that specializes in follow-up phone calls for dealers. Juarez's team calls prospects the day after they visit a dealership, and they also do customer satisfaction surveys. Victory has about 50 dealer clients nationwide, who average annual sales of about 1,000 units.
Patton believes one key to success in today's slow market is to increase sales to existing customers and to prospects who walk in the door. "In 2008," says Patton, "we're all going to look for innovative ways to sell more motorcycles. We have to do more with existing traffic; there's plenty we are missing before we worry about bringing in more traffic."
Last June, Juarez, Patton and Rocket's Florida advertising agency, PARR MOTO, put together a direct mail/telemarketing program aimed at customers who had purchased a new motorcycle within the last three years. The goal was to get them to trade up to a new machine.
The program involved a letter from the sales manager to the customers, saying that Rocket was looking for trades and that the dealership would offer the customer a good deal on his used bike. Juarez then followed up by phone, actually reaching 662 customers.
The campaign generated more than 100 hot leads, 25 of which were converted in two months.
"The thing that did it," says Patton, "was the phone call. They got the letter and then Jose called and reminded them they got the letter. There was direct reinforcement."
The campaign wasn't without glitches, however. "We had too many hot leads at one time," says Patton. "I only had nine salespeople at that time, and the leads were more than they could handle. I didn't do a proper job of setting it up.
Next time, he says he'll stagger the mailings over several days. "I have to think that we missed sales because we had so many hot leads," says Patton.
The trade-in campaign wasn't a one-time deal. Patton pays Victory Solutions a monthly fee (less than $2,000) to study customer satisfaction and to follow up on prospects identified in the store's daily traffic logs. Data is entered each day by a person dedicated to the project and sent immediately to Victory Solutions. This provides a consistent approach. Follow up calls are made the next day, and a report is provided to Patton each morning. "It's like my morning paper," he says.
Patton likes the Victory Solutions program for several reasons: It forces his sales staff to keep a good traffic log; it immediately identifies prospect objections, which can be addressed, and it identifies weaknesses in the dealership operations that often can't be spotted by employees.
"The calling people know motorcycles and they know sales," says Patton. "They make sure the prospect was asked to buy and if he didn't buy, why not. It's worth their weight in gold for us to get this information."
Other companies offer services similar to those provided by Victory Solutions. But the point here is this: If you could convert more prospects to customers through a follow up program like this, why wouldn't you consider it?
Joe Delmont can be reached at firstname.lastname@example.org or 952-893-6876.