Dealer personnel ask for the sale less than half the time, say secret shoppers dispatched by research firm
Motorcycle dealer salespeople ask for the sale only 45 percent of the time. What's even worse is that they ask for a customer's contact information only 38 percent of the time and encourage shoppers to return only 44 percent of the time. And salespeople provide a compelling reason for customers to buy from their dealership in only 34 percent of cases.
So say the results of a second annual study by Pied Piper Management Company, a California-based sales and marketing firm. Researchers between July 2007 and March 2008 hired people to "secret shop" at 830 dealerships (all major brands) around the country. The secret shoppers answered more than 50 questions and contributed comments. Results from this survey were compared with the previous year's data.
Secret shoppers also contacted dealerships by telephone and via the Internet or e-mail, but a staggering 70 percent of dealers did not respond to the shoppers' requests within 24 hours. Of the dealers who managed to respond by e-mail, only 32 percent of them offered reasons to buy from their store, and encouraged the customer to visit the dealership only 58 percent of the time.
Pied Piper Management then combined all results, calculated an industry average, set it to 100 and then ranked all brands in relation to the average. Harley-Davidson dealers led other dealerships when it came to asking for contact information, mentioning the availability of financing, asking for the sale and giving compelling reasons to buy immediately. Victory Motorcycles dealers were tops for mentioning features unique from the competition and for focusing the customer's attention on memorable product features. Ducati dealers reigned for addressing features and benefits relevant to the customer and for offering test rides.
POLARIS PREPARED TO BACK STARCARD
Polaris seems to be stepping up to help dealers find financing for customers in this tough credit environment, and the effort likely will cost the OEM millions of dollars.
Polaris receives retail credit programs from two providers in the United States:
- GE Money Bank provides close-end installment consumer and commercial credit to customers for Polaris and non-Polaris products; and
- HSBC Bank Nevada National Association provides revolving retail credit financing under the Polaris StarCard private-label credit card program.
But HSBC last year informed Polaris that it wanted to tighten credit standards for the revolving credit program. As a result, Polaris officials say it's necessary for the OEM to either forego its volume-based fee income and/or absorb increased promotional support costs to ensure that retail credit alternatives continue to be available for Polaris customers through HSBC. In other words, Polaris is prepared to subsidize what would otherwise be considered nonapproved loans according to the new HSBC standards.
Polaris officials say the "less favorable terms" imposed by HSBC as of March 1, combined with HSBC's decision to discontinue financing non-Polaris products as of July 1, will substantially reduce the income generated from both HSBC and GE Bank agreements this year.
Polaris' Financial Service operation in 2007 generated $45.3 million, and retail financing accounted for 62 percent of that business. Wholesale credit accounted for 31 percent, and other activities amounted to 7 percent. In contrast, Polaris officals expect 2008 year-end income from its retail credit operations to be in the range of $5 million to $10 million — down from an all-time high of $28.2 million last year. — Guido Ebert