Thinking Backward in a Backward Economy May Help Your Dealership

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Economy columnist Eric Anderson Retail management

AMERICA'S RETAIL CLOCK has been reset. People's investments got the daylights knocked out of them, and those who have jobs are nervous about keeping them. Customers are certainly not thinking the same way they were six months ago.

So much has changed. The fact is, Mr. Customer isn't spending as much of his money as he did previously — and he isn't getting credit to buy what he doesn't have.

But he doesn't need credit to ride or keep his old motorcycle running, or even to buy an affordable used machine. Riding in America remains a passionate recreation which people will not let go of even in a recession — especially in a recession.

Motorcycling is an escape, much like the movies: Attendance is up, even if we are sneaking in popcorn under our jackets. We may not have a real-time count on miles ridden in the last few months, but I might guess it has risen above miles ridden over this period last year. Unemployment and introspection forces us to slow down, smell the roses and ride a motorcycle. That's where the cerebral thinking begins. Only then — once your head is on straight — does one venture forth with new direction and fresh motivation.

A DIFFERENT LIGHT

Start thinking about your store backward. Unless you are an independent store, you have been accustomed to classifying your business as a franchised dealership selling new motorcycles. The associated supporting departments and profit centers were F&I, used bikes, parts, service and accessories. Now, however, you should consider your business as a parts, service and accessory store that also happens to offer new motorcycles.

That's right: Flip your viewpoint. The new unit market is going into hibernation for a while, so maximize where your profits will be — in used motorcycles, motorcycle maintenance, and bike and rider accessories.

So how will an increase in service and PG&A of any proportion support the huge overhead of a four-franchise showroom basically warehousing new motorcycles and ATVs? I'm glad you asked. For years I have watched the PG&A section of the big stores lose floor space to more and more new units being added from all continents. Cycle Gear and the local independents picked up the PG&A business exactly as the parts stores did in the auto industry.

Would you consider trying to reverse this trend now? If your new-unit sales are down by 40 percent, for example, and you cannot undo your expensive remodel or showroom extension of three years ago, then your only choice is to convert nonprofit showroom space into something that will make money.

Besides building a Facebook page for your dealership and an indoor go-kart track where your new vehicle showroom used to be, think about some of the following ideas to build traffic and revenue.

  • Increase your floor space for PG&A. Start competing with the little independent guy as well as the bigger Cycle Gears.
  • Diversify your service department by accepting varying vehicles: lawn tractors, other motorcycle brands, etc.
  • Promote tire and oil changes "while you wait" to owners of all motorcycle brands.
  • Stop including a motorcycle brand in your name — unless that's the only customer you want coming in.
  • Think small and local. Customers now want to be part of a family — not a mega store.
  • Offer a 24-hour hotline for sales and technical assistance, and drop-shipping to local customers' homes.
  • Build a Facebook page for your dealership at zero cost. (Ask for help from someone under 30.)
  • Offer closeouts and frequent buyer discounts across departments, like Internet dealers do.
  • Give one-hour tech seminars in the evenings on everything from maintenance to riding techniques.
  • Make more eye contact, shake more hands, and welcome every single person walking in.

NO ONE IS 'JUST LOOKING'

You are a destination store, which means people will go out of their way to come see you. They probably are not coming in to buy a new vehicle, but they are going to buy something — no one is "just looking," anymore. There is a reason they are there, so find out why and help them out while making them feel welcome — not like carrion for your vultures.

We have to keep riding our old bikes, so we also have to take better care of them. Keep customers involved and active, and don't let them stray to the Internet for everything they cannot install themselves. Instead, give them more reasons to drop by and do business with you until the new-unit market bounces back.

Longtime columnist Eric Anderson is vice president of Scorpion Sports. Contact him at eric@scorpionusa.com or via editors@dealernews.com