Entries from September 2009 ↓

I’m finally getting a few minutes to write this post to make some significant announcements.

First, in spite of what the news item from Power Sports business wrote, I did not leave A&S BMW & Ducati to join 50 Below. The press release that 50 Below sent out was an announcement about what I’ve already written about here on my blog.

However, I have left A&S for much bigger and better things at Family Powersports in Texas!

Family Powersports is an amazing multi-line, multi-location dealership group in West Texas. FPS is a three time winner of the prestigious  Dealernews Top 100 dealership and was recently featured on the cover of Dealernews. I met them for the first time after my Indy presentation in 2008 and shortly after that went down to do some consulting with them on how to leverage the internet to help their business.

The timing was just not right for me to jump over there full time. I was still plugging away at A&S and was looking forward to A&S taking on Ducati and getting the chance to dominate the Ducati market the same way I was able to do with BMW.

Recently things changed at A&S and at the same time the opportunity window opened up again at FPS and this time it just made sense to make the jump.

I’m exceedingly proud of what I was able to achieve during my tenure at A&S (#1 BMW Motorcycle search result in Google, #1 BMW parts/accessory retailer, Ducati business and search results are already starting to climb, etc.) , but the limited scope and resources that A&S was able to offer were just not able to compete with the opportunity to work with such an amazing outfit like Family Powersports. The opportunity to work with a large multi-line, multi-location operation that is so well run, professional, and most of all enthusiastic was just impossible to pass up.

Family Powersports has a large OEM line-up (Axis Boats, Bayliner, Can-am, Club Car UTV’s, Crownline, Glastron, Honda, Honda Power Equipment, Kawasaki, KTM, Lehman Trikes, Malibu, Polaris, Premier, Sea-Doo PWC, Spyder, Stratos, Suzuki, Victory, Yamaha, Yamaha Boats & Yamaha PWC) across six locations (McKinney Texas, Weatherford TX, San Angelo Texas [powersports], San Angelo Texas [watersports/marina], Lubbock Texas, and Odessa Texas). It’s huge!

Family Powersports is the model for what a modern dealership/retailer should be. The one thing they were missing was a best in class internet presence, both from a dealership perspective as well as e-commerce. That’s where I’m going to come in. We’re taking this thing to the top baby!

So as you can imagine, I’m going to be slammed 24/7 with this new gig for the foreseeable future. Because of that, I’m not going to be taking on any more consulting business outside of the folks I’m already working with.

That’s the main part of this announcement I guess… I’m going to be really busy for a while, so leave me alone!

I’ll still be doing my Dealernews column and other stuff like that so it’s not like I’m going to fall off the face of the earth.

Wish me luck!

Todd

Last month I laid out my thesis that a lot of the problems at dealerships are a result of a lack of hiring competent, educated, and professional people for roles that should be contributing more positively to the success of the shop. I finished up last month with my projection for how the dealership market was going to shake out over the next two years. One group at the bottom just goes away never to be heard from again, and a group at the top merge into larger groups that are run more by professionally educated businessmen and less by “enthusiasts.”

So what happens to you guys in the middle? The X% that makes up most of the market. If one of the above does not describe you, then you’re the one I’m writing this for.

1) You’ll fail. You’ll fail most likely because of poor management and poor execution. You’re overstaffed because you need all those people to keep rolling the rock up the hill, but none of the people you have either posses the ability or the time to move you to the next quantum state. You can’t cut headcount because all of those people are needed as they are propping up a rotten structure on a broken foundation. You can’t or won’t recognize the problem and replace those “props” with more useful people because you’re too busy fighting fires. You never get your head above the water so you never get a chance to focus on developing the processes that will keep all those fires from happening in the first place.

2) You’ll get it, and you’ll survive. Not only will you survive, but you’ll begin building a new structure that will allow you to become an outstanding mega-achiever when the economy and other environmental factors allow it.

I’m thinking that #2 sounds a little more fun.

As a manager you need to keep in mind that the only three things you can really do as a leader to enable a successful outcome are: 1) recruit, hire, or acquire the best people you can, 2) educate and train them to be as good as possible, and 3) create or enable the creation of the processes and environment that will allow them to make the most of their abilities and education.

You have no real control over anything else. So why are you spending any time on the stuff you can’t control? I know why you’re doing it now. Because most likely you’re surrounded by people that would have a hard time getting hired at Starbucks. Do some research into the hiring process at Starbucks. Is making coffee harder than anything you do? Are the people that are working at Starbucks coffee “enthusiasts?” Do the people working at Starbucks need years and years of experience in the coffee industry to make Starbucks successful? Then why do they pay better and offer better benefits to their people than most of you do?

When you consider how much more your dealership’s individual success depends on having the best people, why are you hiring any ol’ mouth-breathing meth-head that stumbles into your dealership from a craigslist ad?

When I manage people, if they don’t provide at least one better alternative way to do a task that I assign, I make a negative mental note of it. I don’t want staff that is just there to do a task I don’t have time to do myself! I want staff there to do a task because they can do it better than I can! If they don’t have the mental capability or desire to do that, they’ve just begun the process of looking for a new place to work.

Why are you hiring three people at $8/hr. that contribute $X to your company when you could be hiring one person at $20/hr. that could contribute $X*5 if they were educated, intelligent, motivated, and surrounded by other educated, intelligent, and motivated people?

I know why. Because you would never even consider paying $20/hr for that position and letting three other people go because you can’t “afford it”. Or you need the people to just keep beating out the fires. Or you think that if you did bring that person on they would get “bored” or they wouldn’t fit in because they would be the only person there with a degree, or whatever…

Well, here’s my prediction: if you don’t do it you’ll be out of business shortly. Either because of your own businesses “problems”, or because another dealership (local or online) that is doing what I’ve talked about this month drives you under.

Of course the next big challenge you’re going to be faced with if you’re still around in two years is learning how to manage and motivate highly functioning people that are interested in doing more than just “turning the crank”. You know what… There’s education and training for management too.

Epilogue: What do I have to say to all of you working stiffs that are reading this? Start making yourself invaluable. I’m not talking about the B.S. that typically passes for invaluable at most shops; “We can’t get rid of Ol’ Pete back there… He’s the only one that knows how all those 3×5 cards that we keep all our customer records on are organized” or “we can’t get rid of Ol’ Pete because he’s got 40 years of stuff locked away in his head.”

I’m talking about doing things that are going to be indispensable in two years that no one in our industry currently has a clue about. Like taking night classes to get a degree in things like internet marketing or e-commerce. Or joining organizations like The American Marketing Association and getting training in things like social media marketing. I’m talking about demanding that your boss provide you with education and training at places like Dealership University, or provides the resources to attend the Dealernews Live sessions at Indy, or attend in-depth educational opportunities like the one I’m going to be providing in Orlando for Leverage this October (face it… If you want to learn how to use the internet in this industry you can do a lot worse than learn it from me).

And if your boss is not reading this, is not following my directions, and you don’t start seeing some radical changes at your dealership in the coming months, then I’d suggest you start looking for a new place to work, because one way or another, you’re going to be doing that anyway in a year or two.

Tags:Column, DealerNews, dealerships, E-Commerce, ecommerce, employment, internet, motorcycle, powersports, recommendations, selling-online

I’m going to begin this month’s epistle speaking some truth to power(sports). It’s another one of my columns where I’m right, but you’re probably not going to like it. I’d like to float the idea that a lot of you are your own worst enemy. I propose that a lot of the under-performance and failure going on in the powersports industry is your own doing.

“What?!” you say? “What is this idiot talking about?! Has he not been made aware of the general malaise of the world economy? None of what’s happening to me or my dealership has anything to do with my management or the calibre of people that I have working here! I’m only a victim of circumstance! How dare he blame me for my dealership’s troubles?”

Let me lay my main argument out for you. In my 5 years in this industry (after coming from the high-tech world) one of the most surprising and disturbing things I’ve noticed was the general lack of higher education or even formal professional training among dealership staff (often including the principal or GM level).

I propose that this is being driven by two main factors: 1) Dealerships, by and large, don’t pay worth a crap (I was appalled when I saw the results of Dealernews’ Wage and Benefits review. No wonder so many dealerships are such horrible places to shop in when you pay less than WalMart does for a night stock clerk), and 2) There’s a general lack of respect for the value of education within dealerships (perhaps driven by fear on the part of higher management that they will soon be surrounded by people that are “smarter than them.” Don’t laugh, I’ve had dealer principals admit as much.)

In this economy, less than 20% of college grads are able to find a job in their desired field [ http://abcnews.go.com/Business/story?id=7636561&page=1 ]. What does that say to you? It says to me that now is an excellent time to do some major replanting in your company.

You’ve got a pool of educated people out there that could bring significant improvements to your business. I’m sure that among all of those kids that are dejectedly dropping off applications at Starbucks, Home Depot, and Best Buy, that more than a few are motorcycle or powersports enthusiasts that could contribute positive things to your business if you made it worth their time. I’m not talking about picking up good people cheaply. I’m talking about an opportunity to pay reasonably well for value (these kids have significant financial requirements to think about http://redtape.msnbc.com/2009/05/college-debt-so-crushing-grad-says-i-wish-id-gone-to-prison-instead.html). There’s a big difference.

Yes, I’m fully aware that a lot of you reading this are the principals or management of dealerships or retail establishments that have been seen as “successful” for many years. I’m sure that more than a few of the dealerships that have gone under this past year were seen as successful as recently as a year or two ago. But that success was relative. They were competing with a bunch of other dealerships that weren’t exactly highly performing either. It’s fairly easy to be a good JV team when you’re competing with other JV teams in your neck of the woods. But shortly your JV team is going to be playing against the varsity and maybe even the pros from around the world. How’s that going to work out for you if you keep doing things the way you’re doing them now?

I can hear you know… “But Todd… You’re being ignorant and naive! We need to hire a lot of people with years and years of experience in this industry because they need to know how things work as there’s so many fires going on at any given time. We don’t have the money or time to recruit the best and the brightest because we’re dealing with all the crap going on every minute, of every hour, of every day.”

I suggest that you have so many fires to deal with at your shop because you’re doing it wrong. Look… In general (notwithstanding radical outliers that are caused by environmental factors outside of your control), positive outcomes are the result of two major things: 1) quality inputs and 2) a robust repeatable process that is continually reviewed and improved.

Beyond the products and services that you sell (which are by and large generic and totally undifferentiated) what other “inputs” into your business do you have to offer other than the people? Think about it.

What does this have to do with my column’s title, “Doing Business Online?” Everything!

Businessman vs. Enthusiast

Here’s what I see happening over the next two years:

1) The very small mom-and-pop shops are going to go out of business. They will just vanish. They don’t have anything worth buying from a merger or acquisition standpoint. The hole in those markets will be taken over by new dealerships that are part of large, multi-store “chains” or dealer groups that are run by professional businessmen.

2) Large (but not unhealthily so) dealerships that perhaps have been in the family for a while, will be taken over by sons or daughters that are fresh out of B-school. These are kids that have been around the industry for their whole life and know its ins & outs. They don’t see a lot of great prospects out there in the job market, so in spite of the many family fights in the past that included a “There’s no %^&*ing way I’ll work in that %$^$ #$%^ shop of yours!” they will realize a pragmatic reality and decide that perhaps they can bring to bear their exposure to the industry and the formal business education that they picked up at college.

So what’s going to happen to you, one of the dealers that make up the bulk of shops in the middle? Check back next month to see what kind of recommendations I have for how to get out of this cycle and set up your business for success in the future.

Tags:Column, DealerNews, dealerships, E-Commerce, ecommerce, employment, internet, motorcycle, powersports