Issue link: https://read.dmtmag.com/i/626951
www.PowersportsBusiness.com SOLUTIONS Powersports Business • January 25, 2016 • 27 I just finished a speak- ing engagement with Tracker Boats at Big Cedar Lodge in Mis- s o u r i . P u r c h a s e d in 1987 by Bass Pro S h o p f o u n d e r Johnny Morris, the Lodge was simply amazing and left quite an impression on me. If you have never been there, it is worth looking into for your next vacation. The atten- tion to detail at the lodge is exceptional. Tracker Boats got its mark in 1978 inside Bass Pro Shops. With Johnny's direction, Tracker started packaging boats with one, no- haggle price. Never before had the boat, the motor and the trailer been packaged together. Nor had boats been sold out of catalogs with a fixed price tag. With all boat categories for Tracker up this year, to say that the business model has been a success is an understatement. One piece of my presentation that needed to be modified for the Tracker Summit was, "Fluctuation in margin is a product of emo- tion." It's pretty well known that a "good deal" is simply a deal that people feel good about. Create enough positive emotion with your cus- tomer, and you will hold margin, period. It needed adaptation because the company philosophy at Tracker is one of fixed, no-haggle pricing. About 99 percent of the dealerships I've worked with over the past 16 years have not operated with that philosophy, so this was new to me. I changed the presentation to reflect that, "Loyalty is a product of emotion" (also very true), but it got me thinking. Using the Benjamin Franklin Close on myself, I set out to discover the pros and cons of running an opera- tion that way. (Benjamin Franklin was the first person in written history to sit down and list out a pros and cons on all major decisions. His- tory tells us he sat with an idea for three days prior to committing to a decision, so I will fol- low his lead on this one.) Should you switch to fixed "no-haggle" pricing? Cons: You're providing an education to those walking in the door, therefore eliminating the need to "have to" (get to) talk to a salesperson. The issue is amplified if running understaffed, as most dealerships in the industry are. As a result, most customers will not be engaged, so very few will ever get a follow-up call. There are a certain number of people who will pay whatever asking price you have. By dropping your price down to a fixed, competi- tive price, you are essentially giving away mar- gin to that group. Conversely, there are a certain number of people who will always ask you for a discount, and they aren't going away. As a result, you either walk them by not playing the game, or take the deal anyhow. That, in turn, teaches your staff that the "one price" model really isn't one price. The next result of the above two points is that margins can inevitably drop as a result. And let's not forget that change sucks. Everyone resists change; this is a massive change to an established culture. If you are not completely bought in from the top down, it will come across to your customers, which will ultimately be reflected in your CSI scores. Pros: Most people rank buying a car among the top five things they hate to do, right up there with going to the dentist. The cause for the angst is the lack of genuineness of the staff, as well as the negotiation process. Now we are certainly not the auto industry, but how many customers are driving past your dealership due to the negotiation process relayed to them by their friends? What are you doing to attract millennials to your store? Millennials hate negotiation and will pay a fair price for a good experience. How many customers might you attract that you aren't currently getting? Since millennials hate negotiations, they don't seek out careers in industries that contain price negotiations. As an industry, we are terrible at promoting our industry as a career choice to today's youth. How many would change their minds, and how much ethnic diversity for career-minded individu- als might we bring in if the model changed? I asked several dealers (auto, marine and powersports) who have tried the approach, with varying levels of success. Some swear by it, while others hated the idea. However, with all dealers there was a common theme: They either believed it would work (and it did), or they believed it would fail (and it did). Sounds familiar right? As Henry Ford said, "Whether you believe you can or you can't, you certainly will be right." So my conclusion? If you are trying to get into better shape, is an elliptical stepper better than a treadmill, or vice versa? The answer as to which is better is simply a matter of which one you like more and which one you believe will work. They are both good products and both designed to help shed the pounds. But you can't simply buy the solution. You have to actually use the product. If one sounds better than the other, and you believe it will work more than the other option, that is clearly the right choice. You have to sell it to your team. And most certainly, you have to get your customers onboard with the change. I believe that committing to a no-haggle pricing model is both a cure and a cancer. Its success relies on the strength and abilities of your mangers, as well as your appetite for embracing change. Like how I answered the conundrum without ever actually answering it? That takes years of practice … and negotiations … with a fixed-minded spouse. PSB Sam Dantzler is the founder of Sam's Powers- ports Garage, a membership website dedicated to best practices and all-staff training. He can be reached at sam@samspowersportsgarage.com. Should you switch to fixed, no-haggle pricing? HEADROOM SAM DANTZLER