Issue link: https://read.dmtmag.com/i/730410
www.PowersportsBusiness.com SOLUTIONS Powersports Business • October 3, 2016 • 65 As of this writing, the industry is down 3 per- cent, per the Motorcy- cle Industry Council. Every manufacturer except KTM, Polaris and Triumph are in the red when compared to last year. Frankly, I believe we are on the front end of an economic slow down. I'm not referring to one like what we had in 2008 and 2009, but a slow down nonethe- less. That said, who cares? So many dealers are only playing at 50-60 percent of their capacity, so what difference does it really make? Hear me out. … One of the tools we produce at Garage Composites (GC) that's become my favorite, is the profitability spreadsheet. In addition to showing dealers in a glance who is the most profitable by department, it tracks each deal- er's individual transactional ratios. As I've dis- cussed before, these transactional ratios tell us precisely, to the exact count, how many units should have been sold for any given duration of time (year, month, week). In its simplest form, divide the number of customer-based transactions in PAC and service by the given benchmark for your type dealership, and you have your answer. For Harley-Davidson, use 25. For metric, use 12, and for Euro, use 10. In other words, if you had 1,175 transactions for the month, H-D dealers should have delivered 47 (1,175/25) units that month. If a metric dealer had 780 transactions, he or she should have delivered 65 units, etc. These ratios come from years of data input and simply watching the best per- formers in the country hit these goals. On the last line of our profitability spread- sheet, we run the individual dealer's percent attainment. As stated above, most run in the anemic 50-60 percent attainment space, which just shows us there is a huge amount left to sell! If a dealer has 780 transactions and sold 39 bikes on 780 transactions, he's running at 60 percent of capacity (65 times 0.6 = 39). This very same dealer will frequently tell me that, "I'm happy where we are. We're up 20 percent over last year …" or some garbage like that. Why are so many people happy to look at where they were last year, as opposed to where they should be this year? It's like I'm speaking to the head coach of the Tennessee Titans, who won three games in 2015, and he's telling me he's happy winning five games this year. What? Any coach in the NFL winning five games in a year would be on the hot seat for departure, yet he's going to celebrate being up 66 percent over last year? Our entire organization at GC is set up to look at what you could have done, not what you did. I'm not interested in the fact that you're horribly average, yet "… better than last year." I want to look at how to get you to the Super Bowl right now and make every attempt to hit that number. So back to my point from the first paragraph. Who cares if we have an economic slowdown? Are you really ready to drop into fat-cutting mode from your 60 percent attainment of the benchmark. How about you worry about get- ting to 85-90 percent of attainment, then start freaking out about outside influencers? In an industry that continues to be suf- fering from the hangover of 2008 and '09, why do dealers not look at the amazing new product all around them? Where is the optimism? Take a look at the brands that are up. The Slingshot continues to impress in sales and margins, even if it has slowed over last year. Indian is crushing it right now with new product and advancements in on-screen technology and performance. KTM has clearly carved out the adventure bike industry as its own, all while chipping away at the street categories. Triumph rede- signed all of its products to embrace British, nostalgic cool. And H-D just launched a brand new engine. Look around, there's a lot to get excited about. So many dealers hear (through this transactional data) they should be delivering 40, 50 and 60 percent more units, and they just think it's ridiculous. It's as if they have sticker shock themselves. It's true. It's real. The sales are there, and you're simply missing them. From our Garage Composite Market- ing Groups, the average dealer had 7,254 unique visitors is his store. Take that in for a second. Seven thousand, two hundred and fifty-four opportunities walked in the door. If the economy tanks and that count drops 20 percent, the unique visitor count would drop to 5,800. Hear that. Five thousand and eight hundred people in your store, monthly. So who cares if the economy causes 20 per- cent less people in the store, if you are only equipped to handle less than 10 percent of the total count anyhow? Polk data tells us that roughly 80 percent of people who go out to look at a new or used motorcycle, buy one. And 9 out of 10 of them do it in one week or less. Run the math on how many people are in your store and are within one week from buying a major unit. Are you staffed for that? Does your staff follow up with every person inside of a week of the store visit? Is the team creating a unique experience for the customers, and one of urgency? The first step to fixing a problem is admit- ting there is one. Oftentimes, this starts with the dealer principal. The economy is not your issue. Your mindset is. You must first be aware of how many deals you are missing and let it piss you off. Then switch to an attitude of going to the Super Bowl, not hoping for a five-win season. PSB Sam Dantzler is the founder of the training site, Sam's Powersports Garage, and the president of Garage Composites. He can be reached at sam@garagecomposites.com. Dealer principals, it's time to wake up SAM DANTZLER HEADROOM