Performance PowerSports, Llc
Our mission: To accelerate the inspiration of the human spirit – as it relates to sports, recreation, and the pursuit of a favorite hobby.
Here are the principles of how we live that every day:
Our brands: It has always been and always will be about offering products that excite. We're passionate about our strategic partnerships with our suppliers, fostering a relationship that transcends the OEM/dealer connection and extends to the consumer.
Our team: We're called Teammates because this is not just a job, it’s our passion. We know that we can't do it alone, that it takes a coordinated effort to thrill our customers over the life of their experiences with our company. Individually and collectively, we are empowered to bring together our efforts and focus our energies on customer service.
Our customers: To fully engage with a vastly diverse group of consumers; connecting with their passion or curiosity for the sport of motorized vehicle operations. To start with a promise of integrity, but shift into the high gear of fun, allowing our customers the opportunity to safely escape the doldrums of everyday life.
Showroom Design and Layout
Our showroom is characterized as 1969 Las Vegas with a high-testosterone theme. This was accomplished by the installation of nearly 700 lineal feet of neon/argon gas tubes powered by over 30 transformers. The resulting neon ambiance is nearly always described by showroom guests as “cool."
The interior was originally covered in slatwall as a conventional merchandising tool but has since been de-emphasized to allow for a greater emphasis on brand departmentalization. Our manufacturers have asked their dealers to segregate their products. Historically, we would group like units together regardless of brand, believing the customer would like to look at multiple offerings side by side in the showroom. Armed with compelling evidence from research firms that the brands have an affinity following, manufacturers have said that creating a store-within-a-store would yield greater sales per square foot. As a result, we have worked to create franchise nooks within our showroom. The two most recent additions involve the 2013 Victory Motorcycle boutique, a $15,000 manufacturer requirement, and a $3,500 Royal Enfield Time-Line History display.
While budgets have been squeezed during the last several years, the showroom expenditures seem to be a wise investment, as we have been pleased with the customer feedback. In most cases, our showroom guests have reacted positively to the interior changes and our staff has taken pride in the reinvestment activities.
The physical layout of our showroom is a collection of squares that comprise all of the brands. We have one major showroom entrance that funnels our guests to a foyer area that is greeted by a gas station display covertly used as the “sales tower.” Our guests are greeted with a “Welcome to Performance PowerSports” as they come through the front doors. No one goes un-greeted for more than a few seconds. Many national retailers and restaurants use this formula, and we have borrowed a page from their playbook. Our sales manager and settlement manager are housed in this tower, enabling the team to have accurate showroom traffic counts. This is one of the best structural decisions we have ever made; locating management by the entrance gives us tremendous insight and customer exposure.
Our center isle leads to our parts and accessory department, which is a heavy traffic zone. While it is not the Yellow Brick Road, our floor is tiled from the front door to the parts department kiosks for easy identification and access. Again, the great communication tool our gas station provides is that even the parts customers receive an enthusiast welcome.
Our new store-within-a-store merchandising plan required the purchase and installation of eight new factory-brand signs. In order to make the impact we sought, we purchased the larger single-face exterior signs. These signs replaced the merchandise once displayed on the slatwall and now designate brand-specific display areas.
One of the most visible signs of our merchandising efforts came from the establishment of “Scooterville.” Previously lost within our large facility, scooters were an orphan product category. With gas prices surging during the last 36 months, scooters are emerging as a more widely accepted mode of transportation. Allocating dedicated showroom space to scooters and making the area gen-Y friendly has yielded an attractive return on investment.
Finally, the growth UTV sales have dictated a greater allocation of space for this very important product line. Similarly, PWC are vital to our success and also command much floor space. Another growth area requiring more resources is the sport-touring segment. Changing consumer preferences are reflected in the allocation of product segment space in our showroom.
A waffle-house style greeting, coupled with Ralph Lauren Polo store- within-a-store brand segmentation is the best way we can describe our showroom.
Our service department is comprised of three main areas: (1) Customer write-up, (2) Technician work area, and (3) Work in process / Storage. The sum total of all areas combined is 5,000 sq. ft. This area houses computers, lifts, special tools, presses, lathes, parts washers, warranty bins etc. Physically, it is what I would describe and define as a traditional layout.
A couple of years ago, I attended a seminar at the Indy Expo simply titled: “Service Operations,” where the speaker was a highly energized individual that lectured on the importance of “operational flow.” Like most dealers, I want a good service department but I didn’t like to spend time there because…it’s where all the problems are.
When I returned from Indianapolis, I was armed with pages of notes and a commitment to invest the time in the service department mapping out the customer flow, the paper flow, the personnel flow. Basically I had committed myself to take pictures and notes for a week. With my yellow legal pad, digital camera, and the seminar materials in-hand, I was ready to start asking questions. The thing I remember most about this experience was how many times I heard; “We’ve always done it this way." It was a great week and it launched a renovation of processes for our service department. We tackled many problems during that week, such as why technicians had to spend so much time waiting on parts, and why customers had to call us to find out the status of their work request.
I revised a couple of forms, and insisted that go back to the traditional Lemco Inspect and Report process for customer write-up. Then I contacted the speaker and hired him to consult with my service manager monthly for the next year. The two of them set process, revenue and customer-handling goals that seemed unrealistic relative to our past. Within six months, we were achieving these targets and morale was excellent as technician earnings were rising.
I once described our service operation as “upside down and backward” because the consultant seemingly had to turn my Service Department upside down as we discovered that we were doing many things backward. Employing time and motion study techniques like they use in factories, our consultant used his stopwatch observing and timing nearly every aspect of our service operation. As a result we moved lifts, tire equipment, bolt bins, shop supplies, fast-moving parts, lighting, write-up station, computers, nearly everything to streamline the operation. Later that year, we had our best service month in our history; even beating the summer of 2006.
The transition from a period of old-school practices to more a self-absorbed sales era was an important step going forward. And I certainly appreciated the increase in revenue and gross profit retention brought about by the consultant’s process improvements. No question, I enjoyed the improved cash flows. But one day I had a significant emotional experience while visiting an automobile dealership to have my daughter’s Mini Cooper serviced. It was about a year old, and had just 7,852 miles on it when I pulled in the service lane. I asked to have the tires rotated and the oil changed and anything else they deemed necessary. I was expecting them to follow the factory-recommended service intervals, but instead I was greeted with a menu of options that was totally unrelated to what I had read in the owners’ manual the night before. In fact, they offered me a $649 Recommended Plan, a $499 Preferred Plan and a $349 Basic Plan that required my signature to decline the other two plans. They also wanted to add Xtreme additive to my crankcase of synthetic oil, which made no sense to me. I had such a terrible experience I decided to do away with all menus in our service department and strictly follow the factory service intervals.
My service department today is focused on maintaining our customers’ motorcycles, ATVs, UTVs, PWCs, and scooters to the recommended specs and practices of the OEM. It is a value proposition that creates customer confidence and goodwill. All additional services offered and accepted while the unit is in the service bay are discounted 10 percent. We do this because we already have created an R.O. moved the unit on to the lift, diagnosed the unit and we are recognizing that it is an efficient time for us to invest in our customers. Value is greatly appreciated in the new economy. And as Marty McFly said: we are going to change history. Our service value proposition utilizes traditional practices with a modern implementation.
Training and Employee Motivation Practices
The press has reported that in the wake of the Great Recession, the national workforce is de‐motivated, disengaged, and demoralized. And that the country has seen systemic changes in the attitudes of employees during this five year period of decline. The differences in ones’ attitudes, actions, desires and motivational factors were brought about by the pressures of a high unemployment rate and a personal admission that they contributed to the delinquency of their individual situation. How often did we see applicants jumping from job to job for incremental pay gains, while spending lavishly on personal items such as expensive trucks, over-buying housing, and having a need for all the toys? As we collectively look back, none of it makes any sense and that is why we have seen such significant changes in what our Teammates are looking for in their relationship with our company.
Experts say that it is an enigma that wages don’t actually decline during a recession but remain constant. Tell that to a commissioned sales person, parts counter rep or technician, and you will be met with a look of disbelief. Lower sales volume and revenue affects the earnings of every powersports employee. The existence of lower-potential earnings and neighbors that have lost their jobs has created an employee anxiety that is organizationally unhealthy.
As an employer dealing with the decline in revenues and the shift in workforce perspectives, one has to deal with the elimination of jobs and the paring of dealership staff. Obviously you look to attrition and part-time workers for your first cuts. Next you define your employees as “A," “B," or “C” contributors and assess a grade to their value. Next, you reexamine your “B” associates and split them into the “A” and “C” categories. To remain a viable entity you have to go forward with a team of “A”-caliber Associates. This is exactly what we had to do as we reduced our workforce from 25 to 15.
Going forward with your reduced staff, you then have to deal with a variety of issues. First is covering all the work so an effort of cross-training has to begin. One of the biggest risks of job expansion is the potential for an individual to circumvent responsibility for the outcome. So you have to address and eliminate the perspective that they are helping out in these other areas and that “help” is good enough. In this arena as a dealer, you have to do a lot of coaching to get the right perspectives in place. An example might come from the sporting world. What’s the job of Donald Carter for the Colts? To run the ball of course, but sometimes he is needed to block, protect the QB or catch a pass, and he had better do all the above with expertise. There is a lot to this subject and it really becomes quite exciting to see your staff expand their boundaries and take overall responsibility for the store’s performance.
But earnings are down, and people are working more hours and doing more stuff, so the initial buoyancy of retaining their jobs and learning some new things quickly fades into despondencies that can impact attitudes. Again, we have had to address this phenomenon and that came together in three components: (1) Appreciation and empowerment, (2) Compensation formula changes, (3) Team bonuses.
Commitment to Customer Service
We are living in an era marked by societal changes in which no measure of worth other than “value” is more widely recognized. Discussions of income disparity are nightly topics on the news and fodder for political debates. Over the next several years, our industry will likely see the most dramatic changes in customer buying preferences in its history. Profound in their nature and implications, these changes will play out differently according to the dichotomy between mature and youthful consumers as our customers will fragment into distinctly different segments driven by their socio economic category.
Attitudes altered by the recession will continue to evolve, while a shift from one-size-fits-all to a segmented approach to customer service is how we intend to address these changes
While experts and academicians are studying this phenomenon, we took a more layman’s approach. We have very distinct customer differences that are quite obvious. We have lots of customers pull up to our front door in an $85,000 SUV and we have plenty of people walk in that need a scooter. The worlds of these two consumer segments don’t intersect but they do define the consumer continuum that we work with.
To address these trends, we formally defined three levels of customer service that we introduce to our showroom guests during the “road to the sale.” Somewhere in the rapport building stage when we have an opportunity to talk a little about us, we share our three levels of service story. They are easily understood as they are self- defining: (1) Traditional Drop off Service, (2) Concierge, and (3) DIY.
This has been the most profound philosophy that we have implemented and we feel as if we totally stumbled upon it. We wish we could say that we commissioned the university and published a white paper about it – but the reality was it forced its way into our business lives. Our high-end Waverunner customers demanded at-their-dock services with full maintenance included with their purchase, our traditional drop-off customer didn’t want to be sold anything he/she didn’t absolutely need and a generally disliked segment of do-it-yourselfers were embraced for the first time.
Responding differently but seamlessly and equally enthusiastically to these three segments is part of the art of implementation that makes this fun. We have to act like Nordstrom’s and we have to be as helpful as Hobby Lobby. For this example of customer service philosophy I want to focus on the DIY customer. Traditionally the DIY customer has been a younger guy that defined himself as a weekend mechanic, never visited service but knows the guys in parts and typically sought a parts discount. He most recently used the threat of buying off the internet as his leverage to get a discount. He was maligned and disliked by service and probably was neutrally received by the sales department, while parts welcomed him if he was knowledgeable or if he rode with them.
Sometimes the weekend mechanic needs some advice or assistance but wasn’t going to get it from service. At times, a parts-dept. rep might ask a mechanic on his behalf but was always an awkward relationship with this customer.
We ushered in a new program as a result of personal experience. Like most power-sports dealers we do our own maintenance and repair on as many things as we can. Our Service Department truck was “down” and the local Dodge store where we buy our parts didn’t want to help us with any advice. We buy all of our parts there as they are located just down the street. The Dodge service manager turned down our mechanic’s request for assistance citing that if we wanted that info we need to bring it there as they get $85 and hour for that information. We thought that attitude stunk, and then we were hit in the face with the reality that we operated the same. Hence, when the dust settled we decided to embrace the weekend mechanic and expand the group and define it as the Do-It-Yourself segment.
Formally we offer assistance to this customer and it gives them a reason to buy parts from us and maintain a relationship with their local dealer. Our program is simple: If you buy your parts from our dealership our service department will assist you with installation advice free of charge. We will even print diagrams etc. from the service manual free of charge. When you embrace the DIY consumer the benefits are far reaching as this guy becomes word of mouth walking billboard for your dealership. Gone is the stress and anxiety of working secretively with this consumer. Present your parts ticket to the service manager and ask all the questions you want.
Involvement in the Community
It has been said that community service is a slippery slope and you have to be careful if you want to retain traction in your efforts. On one hand you want to be altruistic in your motives to help but there is also a limit to what you can reasonably do. Similarly, you sometimes find yourself saying yes to one and no to others cancelling out your good work with a negative response to a person’s passionate plea. As a dealer and small business owner, one cannot overlook the importance of community involvement and its impact on our business reputation. This is especially true because our dealership generates most of our revenue locally; hence we believe and embrace this philosophy.
At one point in our history we decided that we were only going to support the Salvation Army. We became a drop off location for clothing donations and we manned phones once a month rang bells during the Christmas Season, and raised money with a community-wide poker run called “Anything that Rolls”. We expanded it from a traditional motorcycle run to include anything that rolls and we had a lot of fun. The negative side of this was the effort and the cost. It was a huge burden and not that much of a financial success when you consider all of what we contributed in order to raise the money. It was a good effort but it was weather dependent and never as successful as the Harley rides in the next county. Add back all the times we said no to others during the course of the year and the net affect didn’t measure up to the goals we had established.
We followed up our “Anything that Rolls” multiyear effort with a “Yes Campaign.” Literally, saying yes to everybody that came in asking for support, and giving them at least a fifty dollars donation. During the next couple of years we averaged nearly $400 per month in contributions. A very manageable amount but it lacked the pizzazz of the ATR program. We yearned for something special that really fit our style of doing things.
For a little while we retracted our efforts and focused on all the problems we had at hand with the decline in business related to our 14% local unemployment rate. Then without a formal plan we recognized that our efforts had evolved into a two prong approach. As community involvement went we divided it into two distinct and different entities. First was our geographically defined community and second is power-sports lifestyle community. As the dealer I have taken on the Chamber type activities while allowing my staff to handle the rider groups etc. It was once said: Know what your customers want most and what your company does best – then focus on where to two intersect. Our customers want to engage and participate and my staff are “track-day” enthusiasts so Sport Bike days at VIR and Road Atlanta are a regular occurrence. To support this effort we open up the shop for two nights before the event and do free set-up for anyone going. This is hugely popular and no one else in our area supports this kind of activity. Our Yamaha Rep is a NESBA Control Rider and offers personal coaching when we take customer guests. Our staff is also regular participants at “Cornerspeed” events. We have showroom signs that promote this but word of mouth is our best advertising medium.