Issue link: https://read.dmtmag.com/i/183375
44 • October 7, 2013 • Powersports Business SOLUTIONS www.PowersportsBusiness.com M HEADROOM Discounting not a cultural norm after all So I just came back from California, where I was hit with an interesting question during one of my trainings. A student (and very enthusiastic employee) asked, "When did the idea of asking for discounts become cultural in our society?" One of two answers came to me immediately, but I held them back as I truly absorbed the question. You see a major problem with the question is that it's grounded on an absolute belief that discounting HAS become cultural. It hasn't. Years ago the massive influx of big box retailers fueled a do-it-yourself shopping experience, and customers began to focus more on pricing than the experience they SAM DANTZLER were getting in that big box. It isn't as if the powersports industry made a conscious decision to move away from value-based selling and said, "OK, let's all just sell on low margins now and hope for higher volume like the big box stores." No, quite the contrary. Retailers (and employees) got lazy, mirroring the big box strategies, therefore fielding questions about products and reactively clerking the customers coming through the door. The culture of discounting in a store ISN'T cultural ... but it can BECOME cultural through your staff, your training, and your "show." With so little of the industry actually training people on how to proactively sell the customers and with customers accustomed to price shopping from their Kmart and WalMart experiences, it becomes easier to just drop process and move product. But transactions don't necessarily translate to profits, so you need to know who you are as a retailer. The fact of the matter is, many retail strategies work, and stores like Brooks Brothers, Kohl's, Nordstrom and Wal-Mart are committed to ONLY ONE of them. They don't simply post a price, then adjust it based on their customer's reactions. You can't post a premium price without giving a premium experience and expect to hold margins. You also can't work with current, fresh inventory and expect to survive with a culture of discounting. Who are you? What is your identity? Pick one, and stick with it. Assuming your identity is that of a premium, non-discounting retailer, I offer you these considerations: 1. Are you worth it? When I hear that a dealer lost a deal because the guy down the road was $500 cheaper, I'm reminded of a 1980-something Lemco Letter where Uncle Ed penned a column titled, "So You've Got a Discounter?" Newsflash! EVERYONE has a discounter nearby, but EVERYONE isn't losing deals to that discounter for "fill in the blank" dollar amount. The fact of the matter is, your customer can get "that" product (Arai XD helmet, Sportster, Vance & Hines exhaust) at hundreds of places in the country including online. The ONLY thing that separates you from the other places out there is … YOU! So I ask again, are you worth it? No, you didn't lose the deal because of the discount. You lost it because the customer doesn't think your sales/service (aka "show") P44x46-PSB13-Solutions.indd 44 is worth his extra hard-earned income. Did that hurt? It was meant to. Let me demonstrate with an everyday example: 90 percent of Americans finance these toys, so if you lost the deal for $500 to the guy down the road, that $500 is less than $10/month (based on a fiveyear loan). You lost the sale because your show isn't worth $10/month. And if you can't honestly tell your boss that your show is worth $10/month, then you are in the wrong business. 2. Price of admission. When adding up advertising, payroll and direct expenses, the average dealer in the country is paying between $100-$200 for every customer just to walk through their door. If you were going to go out and spend $100-$200 on dinner, what are your expectations of that dinner? Better be damn good, right? So the dealer principal has paid the price of admission for the customer to see ww Ye dis your damn good show. Not your mediocre, question-answering, semi-present, 'How can I help you?' show. That show sucks. That show is in reruns on Nickelodeon. Can you actually verbalize your "damn good show" to the tune of a $200 price of admission? If not, you've got work to do. When I do training and speaking engagements, I've always called them "Enter-trainment," 51 percent content and 45 din get we pla ac gro See Dantzler, Page 46 DON'T MISS THE MOST COMPREHENSIVE DEALER TRAINING SESSIONS OF THE YEAR 4 TRACKS / 40 SESSIONS SALES & MARKETING Room W204C DIGITAL SOLUTIONS Brou Room W204B SER WEDNESDAY, OCT. 16 How unicorns and fairies translate into increased profitability for dealers Sam Dantzler, Sam's Powersports Garage Marketing your dealership in the digital era Heather Blessington, Duo Web Solutions Succe and la Brad Part I: The Foundation of Profit in Parts, Sales and Service: What to measure, what's possible and what results to expect Hal Ethington, ADP Lightspeed Measuring the value and effectiveness of social media Samantha Scott, Pushing the Envelope Techn Aman Part 2: The Foundation of Profit in Parts, Sales and Service: What to measure, what's possible and what results to expect Hal Ethington, ADP Lightspeed The metrics that matter Neil Pascale, Dominion Powersports Solutions Prote comp Paula How unicorns and fairies translate into increased profitability for dealers Sam Dantzler, Sam's Powersports Garage Digital Marketing: Your digital footprint — How big is it, and how much can it grow? Amanda Blackstone and Duncan Butler, The Butler Group Servic greeti Jame Building a Culture Around a Word: Guest vs. customer Tom Orlando, The Dealer Team 101 social media best practices Samantha Scott, Pushing the Envelope Makin produ 1 p.m. Selling More Online and In-Store: Capturing web-influenced buyers Bob McCann, ARI Social media marketing without a strategy is just noise Heather Blessington, Duo Web Solutions Inven Aman 2:30 p.m. Phone — Friend or Foe: Making the phone an effective sales tool Jason Breckenridge, The 20 LLC Dealer E-commerce 101: Implementing an effective online strategy Craig Cervenka, Edgenet Keep transi Servi 4 p.m. Does the "Be-Back" bus stop here? How to increase your delivery ratio Tom Orlando, The Dealer Team Dealer Roundtable: How to sway hot-button issues in favor of your dealership — and turn a profit! — with a digital activism campaign Moderated by Robin Hartfiel Prote comp Paula Creating a more effective sales department Neil Pascale, Dominion Powersports Solutions An exciting — and profitable — approach to managing your CRM Amanda Blackstone and Duncan Butler, The Butler Group Keep transi Servi Busted: 5 myths about search engine marketing Bob McCann, ARI Measuring the value and effectiveness of social media Samantha Scott, Pushing the Envelope Why maxim TRACK SPONSORED BY TRACK SPONSORED BY TRAC SPON 11 a.m. 1 p.m. 2:30 p.m. 4 p.m. THURSDAY, OCT. 17 11 a.m. FRIDAY, OCT. 18 9 a.m. 11 a.m. *All sessions and presenters confirmed as of printing. Subject to change. 9/25/13 12:25 PM