Guest Editorial - Powersport Profit Secrets
By: Mike Martin
I am constantly astounded by the number of powersport dealers that seem complacent. They do things the same way, year in and year out and watch their companies take their own courses depending on how the season goes.
For those who are interested in growing their businesses, increasing profits isn’t something that’s done in the blink of an eye – there are no silver bullets! The following is a list of six not-so-secret secrets we have learned from personal experience and from interviewing hundreds of dealer principals and business managers. They are used by many powersport dealers to increase profits and overall success.
Some of the profit secrets we suggest represent evolutionary change – the easy ones to implement; others represent revolutionary change – they will be met by long faces and staff resistance. Be prepared.
The Secrets
Create a Business Office
To improve customer service, increase customer retention and raise profits, the time to start a business office is now. This isn't about taking your valued customers into a dingy office where someone dressed in a blue polyester suit rams a bunch of crappy products down their throats. It is about helping customers get better rates than they could from the bank; identifying important insurance and warranty issues customers may not have considered; and showing customers innovative protection products and maintenance programs that will save them headaches and money.
Staff it with people that can relate to your customers and understand and believe in the products. Brokers may be easier in the short term, but their focus is on the present deal not on creating long term customer relationships. Use quality, not quantity as a guide when selecting F&I products. Ensure your business managers and sales reps are trained on F&I products and selling techniques. Locate your business office in a well-appointed location, close to the sales floor designed to put the customer at ease. Use the services of a business consultant to set up your business office.
Provide More Value – By Providing Innovative Services
Admit it – most of the products you sell are commodities. As far as customers are concerned there are plenty of dealership and product options to choose from. Set yourself apart and make customers feel special by selling special products and services only you can provide. Increase innovation by brainstorming at staff meetings, speaking with customers, or through online research.
Prepaid or Priority Maintenance Programs: For customers, bike maintenance is an expensive but necessary concern. Owners know how hard it is to get their bike in for a spring tune up when everyone else is too and they recognize a good deal when they see it. Prepaid or Priority Maintenance means selling units of service up front at a discounted rate aligned to service manual recommendations and bundling them with value-ads like priority service and loaners.
Components may include preferred or same-day service; locked-in service pricing; parts discounts; discounts on additional service units; transferability; free wash and / or free loaners. A Prepaid Maintenance program is an opportunity to keep customers coming back, create ongoing revenue, and provide a hassle-free customer experience.
Join a Dealer 20 Group
Dealer 20 Groups give dealer principals an opportunity to share information and learn best-practices from other dealers. Common in the automobile and RV industry, 20 Groups are catching on with powersport dealers. Once you join one you will be in company with other similar sized powersport dealers from geographical locations close enough to travel to, but far enough away they aren’t your competition. Jeff Wheeler from Wheeler Powersports says, “The best thing about Dealer Twenty Groups is getting together with other dealers and hearing, the war stories. Being able to call them when you’re having a problem is a great help.” Work with a company experienced in setting up 20 Groups for powersport dealers; there are plenty.
Train Your Staff Well
Providing staff with ongoing training and personal development can make the difference between a good team and a team of superstars. Each staff member should have a personal learning plan set yearly and evaluated quarterly. Not all training is expensive; many are available for free or at low cost. While usually tied to current business or the hopes of future business, many insurance companies provide powersport dealers with training.
Choose the Right Software Vendor
When evaluating suppliers consider the following:
Suppliers should treat you like partners, not hostages. Be wary of extended service contracts with no opt-out clauses, and the inclusion of unnecessary modules.
Standalone software. While integration and eliminating double entry are important considerations, poorly developed DMS solutions or unwieldy integrations can be counter productive and more expensive than standalone applications.
Bigger isn’t necessarily better. The availability of powerful and inexpensive programming tools puts small developers on equal footing with the big guys. Look for a proven track record and a good reputation – be sure to check references.
Training, support and upgrades. Look for companies that include training, support and upgrades with their monthly fees – you’re not purchasing a program, you’re purchasing a service.
Adopt a Menu Selling Approach
You have likely heard how menu selling has increased F&I revenue and customer satisfaction indexes in automobile and RV markets – it’s not a leap-of-faith to imagine similar results in powersports. Here are a few suggestions when considering Menu Selling:
Purchase menu selling software (designed for Canadian applications) – paper menus and spreadsheets aren’t flexible or professional enough.
Consider standalone software – if well-designed, standalone software works with any DMS.
Menu Selling represents revolutionary change – your staff will require training.
Design your menus carefully – pay special attention to your titles and descriptions and make sure you include every F&I product or service. You can’t sell it if you don’t show it.
If you follow these rules you’ll find not only will you sell more F&I products, your customers will appreciate the work you have done for them as well.
Mike Martin has been in sales & marketing for 20 years. In 2006 he graduated from Athabasca University with an MBA and is the Director of Sales & Marketing at Quantech Software.com, developers of dealership software. 877.611.0622 mike@quantechsoftware.com
For those who are interested in growing their businesses, increasing profits isn’t something that’s done in the blink of an eye – there are no silver bullets! The following is a list of six not-so-secret secrets we have learned from personal experience and from interviewing hundreds of dealer principals and business managers. They are used by many powersport dealers to increase profits and overall success.
Some of the profit secrets we suggest represent evolutionary change – the easy ones to implement; others represent revolutionary change – they will be met by long faces and staff resistance. Be prepared.
The Secrets
Create a Business Office
To improve customer service, increase customer retention and raise profits, the time to start a business office is now. This isn't about taking your valued customers into a dingy office where someone dressed in a blue polyester suit rams a bunch of crappy products down their throats. It is about helping customers get better rates than they could from the bank; identifying important insurance and warranty issues customers may not have considered; and showing customers innovative protection products and maintenance programs that will save them headaches and money.
Staff it with people that can relate to your customers and understand and believe in the products. Brokers may be easier in the short term, but their focus is on the present deal not on creating long term customer relationships. Use quality, not quantity as a guide when selecting F&I products. Ensure your business managers and sales reps are trained on F&I products and selling techniques. Locate your business office in a well-appointed location, close to the sales floor designed to put the customer at ease. Use the services of a business consultant to set up your business office.
Provide More Value – By Providing Innovative Services
Admit it – most of the products you sell are commodities. As far as customers are concerned there are plenty of dealership and product options to choose from. Set yourself apart and make customers feel special by selling special products and services only you can provide. Increase innovation by brainstorming at staff meetings, speaking with customers, or through online research.
Prepaid or Priority Maintenance Programs: For customers, bike maintenance is an expensive but necessary concern. Owners know how hard it is to get their bike in for a spring tune up when everyone else is too and they recognize a good deal when they see it. Prepaid or Priority Maintenance means selling units of service up front at a discounted rate aligned to service manual recommendations and bundling them with value-ads like priority service and loaners.
Components may include preferred or same-day service; locked-in service pricing; parts discounts; discounts on additional service units; transferability; free wash and / or free loaners. A Prepaid Maintenance program is an opportunity to keep customers coming back, create ongoing revenue, and provide a hassle-free customer experience.
Join a Dealer 20 Group
Dealer 20 Groups give dealer principals an opportunity to share information and learn best-practices from other dealers. Common in the automobile and RV industry, 20 Groups are catching on with powersport dealers. Once you join one you will be in company with other similar sized powersport dealers from geographical locations close enough to travel to, but far enough away they aren’t your competition. Jeff Wheeler from Wheeler Powersports says, “The best thing about Dealer Twenty Groups is getting together with other dealers and hearing, the war stories. Being able to call them when you’re having a problem is a great help.” Work with a company experienced in setting up 20 Groups for powersport dealers; there are plenty.
Train Your Staff Well
Providing staff with ongoing training and personal development can make the difference between a good team and a team of superstars. Each staff member should have a personal learning plan set yearly and evaluated quarterly. Not all training is expensive; many are available for free or at low cost. While usually tied to current business or the hopes of future business, many insurance companies provide powersport dealers with training.
Choose the Right Software Vendor
When evaluating suppliers consider the following:
Suppliers should treat you like partners, not hostages. Be wary of extended service contracts with no opt-out clauses, and the inclusion of unnecessary modules.
Standalone software. While integration and eliminating double entry are important considerations, poorly developed DMS solutions or unwieldy integrations can be counter productive and more expensive than standalone applications.
Bigger isn’t necessarily better. The availability of powerful and inexpensive programming tools puts small developers on equal footing with the big guys. Look for a proven track record and a good reputation – be sure to check references.
Training, support and upgrades. Look for companies that include training, support and upgrades with their monthly fees – you’re not purchasing a program, you’re purchasing a service.
Adopt a Menu Selling Approach
You have likely heard how menu selling has increased F&I revenue and customer satisfaction indexes in automobile and RV markets – it’s not a leap-of-faith to imagine similar results in powersports. Here are a few suggestions when considering Menu Selling:
Purchase menu selling software (designed for Canadian applications) – paper menus and spreadsheets aren’t flexible or professional enough.
Consider standalone software – if well-designed, standalone software works with any DMS.
Menu Selling represents revolutionary change – your staff will require training.
Design your menus carefully – pay special attention to your titles and descriptions and make sure you include every F&I product or service. You can’t sell it if you don’t show it.
If you follow these rules you’ll find not only will you sell more F&I products, your customers will appreciate the work you have done for them as well.
Mike Martin has been in sales & marketing for 20 years. In 2006 he graduated from Athabasca University with an MBA and is the Director of Sales & Marketing at Quantech Software.com, developers of dealership software. 877.611.0622 mike@quantechsoftware.com
