Issue link: https://read.dmtmag.com/i/485263
FINANCIAL Through the years I spent working in pow- ersports dealerships, I was exposed to quite a few different trainers and consultants. I got the most out of the people who could not only give me the best way to do things, but who also could tell me why those things worked. This month's article is dedicated to the why! I picked four of the most common con- cepts used when negotiating anything. These concepts can be used when negotiat- ing the sales of your finance products, the vehicle purchase or anything else you sell in your dealership. 1. RECIPROCITY Reciprocity is a social norm of in-kind responses to the behavior of others. The best example I know of this is from a series of studies that were conducted in res- taurants concerning how much people tip. What they found is that when the server gave a diner a single mint when he or she dropped off the bill, tips increased about 3 percent compared to the servers who did not give the diner a mint. Now, if the mints are doubled (two mints per diner) the tip did not double — it actually increased by 14 percent! Even bigger than that, if the server drops one mint per diner, starts to walk away, pauses, and turns back around to leaves more mints, say- ing, "You guys are great! I hope you enjoy the rest of your evening." They saw a 23 per- cent increase. Simply put, if you give a person a gift, you receive more from that person in return. However, it's not just about giving the gift, but how you give the gift that is important. Make it personal and impactful. The most effective time we at dealerships have found to give a gift is right before the finance manager presents his or her finance products. It should be given as a thank you for the customer buying a bike from you. If you decide to give a second gift to the spouse, children, etc., make sure that it is given almost as an afterthought or a deeper "thank you" because they are so awesome. This will increase your finance product sales and not only make you more money but also make the customers happier when they do have an issue and need the F&I products that they bought from you. 2. BANDWAGON EFFECT A psychological phenomenon whereby people do something primarily because other people are doing it, regardless of their own beliefs, which they may ignore or override. Have you ever seen a crowd go wild on an infomercial and become curious about the fuss? Ever notice that celebrities have huge followings on Twitter and Facebook and used that as justification to follow them yourself? Ever seen an ad for, say, Coca- Cola, and thought (maybe not consciously), "Hey, that looks good and those people look like they're enjoying themselves. I could go for one of those right now." Chances are, you have. You've jumped on the bandwagon. The reason why I can bet you've done it is because, well, it's human nature. It's a veri- fied psychological effect. We can use this principle in our finance pre- sentation. If everyone else is doing it, then the natural tendency is for more people to want to do it, too. Therefore, insinuating through your actions or words that this is what everyone else does can have a powerful effect. Use it! 3. AGREEMENT BIAS Agreement bias is the tendency of individuals to acquiesce in negotiation, even if that 14 • April 6, 2015 • Powersports Business www.PowersportsBusiness.com 4 concepts to keep in mind while negotiating STOCK MARKET WATCH DEALER FINANCIAL SNAPSHOT FEBRUARY 2015 Same Store Sales for CDK Global Recreation dealer- ships were up overall 4.2 percent in February. The Northwest had the largest increase, up 25.4 percent in overall sales. The second largest increase was in the West, up 14 percent. Both the Northwest and West were the only regions to increase in all four cat- egories. The Midwest suffered the largest decrease in parts, down 7.1 percent. The South had the second largest decrease in parts, down 4.8 percent. PARTS SALES Nationally, 664 dealers were up in parts, and 800 were down. SERVICE SALES Service sales saw 790 dealers up, and 615 were down. MAJOR UNIT SALES 681 dealers were up in major units sales, while 578 were down. NORTHWEST 4.1% Parts Department 17.9% Service Department 32.8% Major Units 25.4% Overall MIDWEST -7.1% Parts Department 1.1% Service Department 0.1% Major Units -1.0% Overall NORTHEAST 0.5% Parts Department -1.9% Service Department -1.6% Major Units -1.4% Overall SOUTH -4.8% Parts Department 6.9% Service Department -2.4% Major Units -1.7% Overall WEST 1.1% Parts Department 13.5% Service Department 16.9% Major Units 14.0% Overall UNITED STATES -2.0% Parts Department 7.5% Service Department 4.9% Major Units 4.2% Overall Stock Price Percent Company Ticker 3/13/15 Change Universal Technical Institute UTI $9.74 7.0% Spy Inc. XSPY $0.71 6.0% Cooper Tire & Rubber CTB $38.98 3.4% Arctic Cat, Inc. ACAT $37.38 2.8% ARI Network Services, Inc. ARIS $3.70 2.5% Polaris Industries, Inc. PII $147.76 -5.0% Brunswick Corp. BC $52.16 -5.1% Harley-Davidson, Inc. HOG $58.80 -7.4% ArvinMeritor ARM $13.25 -7.9% Speedway Motorsports, Inc. TRK $21.58 -9.5% POWERSPORTS BUSINESS WINNERS AND LOSERS MARKET WATCH Change 3/13/15 from 2/20 % Change Powersports Business Index 320.887 -9.84 -2.98% Dow Jones Index 154.380 -3.40 -2.20% S&P 500 Index 139.758 -3.87 -2.70% Source: Wells Fargo Securities LLC 50 100 150 200 250 300 350 400 7/18/14 8/15/14 9/12/14 10/10/14 11/7/14 12/5/14 1/2/15 1/23/15 2/20/15 3/13/15 PSB INDEX VALUE DOW JONES INDEXED S&P 500 INDEXED STOCK MARKET ACTIVITY FOR MORE ON THE SAME STORE SALES DATA For more information on this report and other industry data, contact: cdkrecreation.com/dataservices *The Powersports Business Index has been adjusted to reflect the removal of Orbital Engine Corp. Ltd. ADR (OE) on 8/15/14 and the addition of CDK Global (CDK) on 12/5/14. F&I SOLUTIONS STEVE DODDS See Dodds, Page 16