'E-Commerce' Entries ↓

Last month’s column generated more emails than any other that I’ve ever written. After years of telling dealers they needed to get online all it took was the near collapse of the Western world’s economy to get through to you. You’re a hard bunch to motivate.

The reason I’ve been so gung-ho on the web was because it was the only practical way for a dealership to dramatically grow its revenue. A dealership could do nothing and float along with the economy, and we’ve seen what’s happening to them. A dealership could try to expand it’s physical presence into other markets by opening more shops, but that’s expensive, difficult, and risky. Or a dealership could take on the web in a big way.

On one hand, it’s good that so many of you seem to be doing this now. On the other hand I think a lot of you may have missed the window of opportunity. At least as far as jumping into straight e-commerce goes. Especially if my email load is any indication. I know of at least 10 dealerships that say they are going to jump in. Add to that the huge number that didn’t write to me, the number of dealerships already doing it, and of course the huge pure-play e-commerce guys like MotorcycleSuperstore and RevZilla, and as you can see, the pool is pretty darn crowded now.

So given this situation, I want to end my series of columns for 2009 playing Nostradamus and set the stage for a plausible future that I think you need to be thinking about, if not outright planning for.

The year is 2012. The previous two years didn’t provide the much hoped-for economic recovery (think I’m being overly pessimistic? Read this: http://blogs.harvardbusiness.org/tjan/2009/09/the-next-crisis-coming-in-2011.html). The economy as a whole managed to eek out a small amount of growth but only enough to keep it from sliding backwards. What’s worse is that it proved to be a totally jobless “recovery.” Consumers in the USA didn’t have the disposable income nor the security necessary to fuel the powersports industry at a level necessary to maintain it’s current model. More and more dealers closed. So many closed in fact that large urban centers around the US were now without a single powersports dealership. OEM’s were sitting on warehouses and leased lots full of vehicles that were working on their second or third birthday. Production back in their respective home countries was at a virtual standstill.

The dire economic situation had now forced the OEM’s (as well as parts, accessory, and gear manufacturers) to rethink not only their own business models, but the overall business model for our industry as a whole. The idea of having literally thousands of typically undifferentiated retailers across the country selling virtually undifferentiated products out of establishments that by their very nature were burdened with unsustainable overhead and other expenses had finally proved its ultimate folly.

Customers still wanted their motorcycles, ATV, PWC’s, etc. The OEM’s still wanted to stay in business producing them. The ultimate problem was the distribution and retail sales system. Finally, the smart OEM’s hit on a model that had worked before. They looked at the personal computer market pre-Dell and realized that there was an opportunity to leverage the phenomenal opportunity that the internet provided and essentially sell semi-direct. Customers would shop on the OEM’s, pick out the vehicle and options, and then buy it online.

However, unlike the relatively inexpensive and “basic” home PC, the products in our industry presented a level of technical, financial, and legal complexity that they still required one more node in the supply chain. Unlike a PC from Dell, the vehicle would not be shipped directly to the end customer.

The solution was to evolve to a model that traded information for inventory. Vehicle and PG&A inventory was now held as high in the supply chain as possible. What were once “dealerships” that occupied ten’s of thousands of square feet were now transformed into small “authorized delivery, setup, and service” locations. It was a radical transformation from huge dealerships to many more boutique-type establishments that now focused on much more high margin business activities such as the F&I portion of the sale, vehicle service and warranty work, and so on.

The fundamental discovery that allowed this model to work was the realization that the just-in-time logistics costs to get the right vehicle to the right delivery point at the right time could be done far more economically than the aggregated real and opportunity costs of the old (i.e. current) way of doing things.

Customers also shop for OEM branded and produced PG&A on the OEM’s site and have the opportunity to take delivery (for installation or set-up for instance) of the products from participating retail/delivery locations for a revenue share with the OEM.

These Delivery, Setup and Service locations were now composed of mostly high-magin activities and were relieved of much of the non value-added overhead burden from the previous industry model. However, because there was the potential for so many more locations in any given market, the emphasis on quality and high levels of customer service was even greater.

So what’s the moral of this cautionary tale? It’s this: “if you think the internet has been disruptive to your business so far, you’ve most likely not seen anything yet”! Our industry has not yet even begun to scratch the surface of what the internet and all of it’s prodigal technologies and business practices can do for (or to) us.

I’m sure a lot of you are shaking your head and saying: “this guy’s nuts!” Keep in mind I was telling you all two years ago to get into the e-commerce game. I’m sure more than a few of the dealers trying to finally get into the e-commerce game once said the same thing about selling on their websites. Most of you didn’t move until it was too late on the e-commerce front. What if I’m right about this? What are you going to do to prepare?

Tags:Column, dealerships, E-Commerce, ecommerce, internet, motorcycle, powersports, Powersports Industry, selling-online

“Well the frost is on the pumpkin, And the hay is in the barn…” those lines from James Taylor’s “Walking Man” always remind me of this time of the year. It’s harvest time, and it’s time for the gardener/farmer to go out and start picking the crops they’ve been growing all season.

If you’re going to play in the internet you need to understand the importance of having a full time “gardener” for your online garden. Someone to nurture it, coax it along, do all of the right things at the right times. Otherwise you’ll end up with what I see a lot of out there: a land of promise transformed into a barren and forsaken land whose bleakness is only interrupted by patches of weeds, brambles, and thorns.

This month’s column compliments perfectly last month’s screed on the importance of hiring the right people. I was up in the air as to which one to present first, but once I seized on the garden/farming metaphor, I figured this one made more sense to run in October.

Last month’s column was all about why and how to hire the best people possible, this month’s column is about what you need them to do and why it needs to be a full-time position.

Tags:Column, dealerships, E-Commerce, ecommerce, employment, internet, Merchandising, motorcycle, powersports, Powersports Industry, selling-online

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, dealerships, E-Commerce, ecommerce, employment, internet, motorcycle, powersports, Powersports Industry, 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, dealerships, E-Commerce, ecommerce, employment, internet, motorcycle, powersports, Powersports Industry

This is another one of those months where you’re no doubt going to walk away after reading my humble little column and cry, “My God! This man’s a genius! Why have we never thought of this before?!” OK… Maybe not… But it’s still a pretty good idea.

This month I want to pass on a suggestion about how you can make sure that you have the best e-commerce and customer service operation out there: Go shopping!

I’m sure that somewhere in your list of goals and desires for your e-commerce operation that you want your customers’ experience with your shop to be as good as it possibly can be. Not just better than anyone else, but good in an absolute, C.S. Lewis-ish, sense as well. After all, just because everyone else is horrible is no reason for you to be horrible too, right?

So how are we going to do this? We’re going to pick five to seven other e-commerce sites and take them for a test ride. I suggest that you choose two to three of the big e-tailers and catalog sites (i.e. Motorcycle Superstore, Knee Draggers, Bike Bandit, or Dennis Kirk) and then choose three or four dealer-run sites that also sell to the same markets that you do.

Your goal is to probe and test their systems. Their online systems, as well as their human, customer service systems. You need to create a standard testing process or protocol for how you’re going to do the test, and then apply that same protocol to each shopping experience. You’ll then grade or judge each retailer to not only see how well they are doing, but to come up with ideas for how you can be doing things better. Find something that’s horrible? Make sure your systems are set up to avoid it! Find something that’s amazing? Make sure your systems are set up to include it!

After all, if you don’t do this, how in the world will you ever know how good you have to be to be great? Trust me, your customers most likely shop with companies other than you, and they know who’s naughty and who’s nice. If you don’t have the same sense for where you stack up, based on first-hand experience, I’m willing to be that you’re not doing things as good as you think you are.

So what kind of things do we need to test? I’m going to offer up a few suggestions for things that you can do to see how satisfying, helpful, flexible, easy, etc. the experiences with each retailer is. Remember, one of your goals is to break their systems. You’re trying, through somewhat reasonable, real-world inspired actions, to become a nightmare customer. You want to be reasonable about it, but (based on years and years of first hand experience) I can guarantee that regardless of how wacky, far-out, or unreasonable you are during this test, that there are real customers out there that are worse than anything you can think up. If you’re new to this, you’ll have to trust me on this. If you’ve been around a while, you know exactly what I’m talking about.

First, pick two to three products that everyone carries so you can shop for the same stuff with each retailer. I suggest that one of the items you pick is a product that you know is hard to get, is frequently out of stock, has a long lead-time from the supplier, etc.

Now on to a few suggested tests (remember, these are just suggestions to get the ideas flowing… Come up with your own, relevant tests):

• Go to each retailer and place your initial order. Use their site search to see how hard it is to find each product. can you find them by drilling into their categories? Are all of the attributes like color

• Give them the wrong address: Give them, say…, your personal address with you order online, then call up a few hours later and have them switch the address to your shop’s address. Wait and see where the products end up.

• Order a hard part that requires installation and once it arrives, call them and see how helpful they are at helping you install that part on your bike.

• Order something like a pair of riding boots or riding gloves (or underwear… Seriously… It’s happened… Yes. Gross.), wear them and use them to the point where it’s obvious that they’ve been used, and then try to return them. Does the retailer give you a hard time or do they accept the return gracefully?

• On those out of stock orders, call them up at least once a day to check status. Make note of how patient they are with your badgering. Also, make note if you get conflicting or otherwise funky promise dates. If every time you call up you get a different answer, or every time you call up you get told “two weeks”, regardless of how many weeks have passed, that usually indicates they are not really looking into it or telling you the truth.

• After you place your order online, call them to change something with the order. The size… The color… Add an item… Take an item off… Then call back later that day and make another change. Then wait to see if you get what you’re expecting to receive. If you don’t get what your expecting after making the changes, call them up and find out what happened. Ask if they have a record of your calls to make those changes. If they do, they are using a good CRM system. If not, then they’re flying blind.

Tags:Column, dealerships, E-Commerce, ecommerce, internet, motorcycle, powersports, Powersports Industry, selling-online

While I know that most of you see me as the ultimate guru of all things web (right?), the truth is, there’s a wealth of places out there other than me where you can (and really should) find out a lot more about things like e-commerce, internet advertising, and integrating social media into your overall internet marketing strategy and so on.

The truth is, this area of technology (especially social media) is forming and re-forming so fast that if you blink you’re likely to miss a development or a breakthrough that becomes the next “big thing.” You don’t want to be the one that misses out on the next hot trend do you?

If you answered “No!” then read on. If you answered “Yes!” then I’m not sure we have anything else to talk about frankly.

So, without further ado, this month I’m going to save you some time in filtering out the wheat from the chaff (ooohhh… an 18th century reference in a 21st century column!) and point out some of the resources that I find pretty valuable in keeping up with what’s hot, happening, and now.

E-Commerce

First and foremost is a resources that I’ve mentioned in the past when it comes to e-commerce, and that’s Internet Retailer (www.internetretailer.com). Internet Retailer has a print magazine that you can get for free, as well as several really well done e-mail newsletters that you can subscribe to. Internet Retailer is also responsible for the Top 500 Guide, which every year ranks the top largest e-commerce players in terms of revenue and provides a wealth of information such as traffic figures, sales performance data (conversion rates, average order value, etc.) that you can use to benchmark your own performance.

Next up in the e-commerce space is Shop.org (guess what the address of their website is). Shop.org is the e-commerce focus for the larger National Retail Federation (www.nrf.com). Shop.org puts out a great series of e-mail newsletters that do an excellent job of keeping the reader up on what’s going on in the e-commerce space. I find the coverage they provide to have a slightly different twist than Internet Retailer and between the two you can get a great picture of what’s working, what’s coming down the road, what you need to be doing to get ahead and once you’re there, to stay there.

Internet Marketing

As all internet marketing pretty much begins by looking through the lens of the search engines like Google, Yahoo, MSN Live, etc. the best place to get your daily fix of search engine related wisdom is probably Search Engine Watch (www.searchenginewatch.com). They have a series of e-mail updates, as well as a worthwhile RSS feed and Twitter profile (@sewatch) that you should be reading. They cover pretty much all the aspects of search engine optimization (SEO) and search engine marketing (SEM) that you will ever need to know (or at least could ever remember or implement).

The next excellent resource for internet (and even general) marketing is Marketing Sherpa (www.marketingsherpa.com). Marketing Sherpa has developed the reputation as the source for marketing best practices. These are real-world best practices, not high-level theory like you’d get from some place like the American Marketing Association. While they do offer some free reports and resources (their write-ups are free for the first week), to get the most out of what Marketing Sherpa has to offer you will need to pay for the annual subscription. You can sign up for a free trial subscription to check it out. I recommend that you do.

Social Media, etc.

Finally we have the increasingly important and dynamically changing world of social media and all of the hybrid offshoots of sites like Facebook and Twitter.

First up is a site called Mashable (www.mashable.com) who bills itself as The Social Media Guide. They do an excellent job of covering how to use the exisiting social sites both from the perspective of a user, as well as from the perspective of a business looking to use social media for marketing and promotional purposes. In addition they keep on top of the bubbling, churning, and chaotic world of emerging social media players as well as clever and useful ways to leverage the social media ecosystem of feeds, API, applications, and widgets.

Finally I’m offering up a great site, TechCrunch (www.techcrunch.com), that will keep you abreast of both the social media scene as well as the business world of the internet from a technical perspective. TechCrunch is actually billed as a blog, but it’s a blog (and extended media empire known as the Crunch Network) that headed by probably the best “new business” gadfly around, Michael Arrington. Michael and his team are plugged into who’s doing what, what it’s good for, who’s getting funded and who’s the newest member of the internet industry deadpool. It’s a great resource that you don’t want to miss.

So there you have it. A great list of summer reading when you need to know what’s going on in the world of the web. I’ve only scratched the surface by offering up the ones that I read on a regular basis. If you have some great resources you want to share, let me know!

Tags:Column, dealerships, E-Commerce, ecommerce, internet, marketing, motorcycle, powersports, Powersports Industry, Resources, Search Engine Optimization, selling-online, social marketing, social media, social-networking

If you were at Indy, perhaps you saw their booth announcing their new program. Or perhaps you’ve seen some of their advertising. Regardless of where or if you’ve heard about their new program, Motorcycle Superstore has a new initiative that may help you make more money.

What?! How can one of those “evil” internet retailers (and not just “one of”, Motorcycle Superstore is the largest e-commerce player in our market as rated by Internet Retailer in their Top 500 retailers survey for 2008) that so many of you hate have anything to offer your business?

The program that Motorcycle Superstore is rolling out is called the “Preferred Installer Program” and the idea is that dealers sign up with Motorcycle Superstore to be an installation “partner.” When a customer buys a qualifying product from their site, the part gets shipped directly to your dealership where you install and configure it on the buyer’s bike.

If you are familiar with the automobile tire and accessory company The Tire Rack, then this program is going to sound really familiar to you because it’s a model that Motorcycle Superstore’s Don Becklin has pretty much followed for their PI program.

Currently the program is only covering tires, exhaust systems, and Power Commanders, but that may be expanded in the future based on findings from customers and participating dealers.

Now that you know a little more about the program, you’re probably wondering what in the heck is this thing really all about. Where’s the scam? Is this some kind of big wooden horse that you’d be letting into your shop only to have a bunch of Motorcycle Superstore invaders come pouring out?

Not quite. You see, Motorcycle Superstore gets at least half-a-million visitors a month (per Internet Retailer’s estimates, I think the real number is much higher) and only like 2.5% of those people ever buy something from them. Where do the rest of those people go? Well, while the exact numbers are pretty much any one’s guess, the overwhelming majority of purchases in our industry still happen across a counter, face-to-face in a brick and mortar retail store.

Wait! But how can that be? I’ve heard for years how the internet is destroying dealerships and other powersports retailers. Customers come in, ask a bunch of questions, try on a bunch of stuff, and then leave to buy what they need online for a few bucks less.

That’s quite a paradox. Don’s company’s seeing millions of people doing a bunch of research online only to buy somewhere else at the same time dealers are saying that the same thing is happening to them! How do we resolve this paradox?

The truth is, you can’t. The reality is that certain customers, at certain times, for certain products are going to choose the retail channel that best suits their needs. It’s just a fact and trying to fight it is as pointless as tilting at windmills.

Motorcycle Superstore has realized this and has developed a program that they hope will allow them to sell more stuff, make it easier on their (and your) customers, and help support and build the dealer and independent retailers at the same time. It’s a way to grow the pie instead of fighting over the crumbs!

Face it, do you really want to sell a set of tires at close to, if not at, cost just to get customers in your shop? You really want to carry the inventory, or incur the ordering, freight, and receiving expenses on those tires in hopes of getting some extra service work or to attract a new customer into your shop? Of course not!

Just taking tires as an example, Motorcycle Superstore is probably the largest retailer of motorcycle tires on the face of the planet. They get deliveries by the container load. They are getting prices on tires you could never dream of. So it makes sense for them to build their business on that. However, the missing link is what does the customer do with them once they get them? There’s no way anyone is mounting modern sport bike tires on their new Ducati 1098 with a couple tire irons and some Vaseline. Let alone getting them balanced. They need you for that.

This doesn’t even scratch the surface for things like tuning setups for exhaust systems and Power Commanders. If you’re a tuning shop, get ready to fire up the dyno because you may have more work in the near future!

Now that brings me back a few years when I wrote that if someone comes into your shop carrying a new set of tires freshly delivered from some website under their arms, instead of treating that customer like some kind of scum, you should be welcoming them and even going so far as to just mount them for free in the hopes of making an impression on that new customer. Boy, did some of you have issues with that!

Ok, so maybe “free” was going a little far to make my point, but I stand behind my primary idea that someone else’s website’s sale got a new customer through your door. And I’m willing to bet some pretty decent money that your typical cost of new customer acquisition is a lot higher than you’d make off that set of tires.

And now here’s a program, set up by one of those “evil” internet discount shops, that is intended to formally allow you to do exactly what I was preaching two years ago!

I’m going to close this month with two last points. The first is a simple thought exercise where we imagine the following scenario:

A lifelong Kawasaki riders buys some new tires off from Motorcycle Superstore. Let’s say that Motorcycle Superstore make $30 bucks net from that sale (which is probably generous depending on shipping charges, etc., etc.). Your Suzuki and Honda shop was wise and followed my advise and got on board for the PI program and that customer has the tires shipped to your shop.

You get the confirmation email that the tires are on the way and you proactively call the customer up to set up a time for the service (you will do it that way won’t you? Surprise the customer with a level of service they weren’t expecting?). The customer comes in for the tire service and because your advisers have been reading Dave’s columns on selling service they are able to upsell something like a brake system flush, oil change, etc.

Now, while the customer is waiting for the service work to be done, they check out the new Gixxer. Maybe one of your sales people get them on it for a test ride. They like it! “Nice bike!”

They leave your shop with an amazing impression of great service and possibly a decision on the next bike that they’ll buy in 6-8 months.

Now what did this all cost you? Did you have to run an expensive TV campaign? Take out a full page in the local newspaper? No. You got all this because you lost the sale of a set of tires and you executed flawlessly once the ball was on your side of the court.

Finally, if you’re still not convinced that this program is something worthwhile that you need to get on board with, do this. Go to the Tirerack’s website (www.tirerack.com) and find an installer or two in your area that has signed up for their program. Take a long lunch and ride down to a couple and talk to the mangers there and ask them how that program is working for them in the automotive arena.

Then when you get back from your lunch, go to here (http://www.motorcycle-superstore.com/818/MNGR/Preferred-Installer-Dealer-Sign-Up-Information.aspx) to sign up for Motorcycle Superstore’s PI program. I’m willing to be another shop in your area is going to.

Tags:Column, dealerships, E-Commerce, ecommerce, marketing, motorcycle, powersports, Powersports Industry, selling-online

This month I’m going to be tweeting about Twitter. What it is, why you should care, and most importantly how you can use it in your business

Unless you’ve been living under a rock, you have most likely been bombarded with mentions of Twitter in the media

Even members of congress were “busted” tweeting during President Obama’s recent national address http://tinyurl.com/dc394j

Briefly, Twitter is a “microblogging” tool (and now a technical infrastructure) that lets people post short 140 character tweets to the web

Twitter is a weird FrankenTech that exists somewhere in the spaces between RSS, chat, e-mail (albeit public email), blogs, and forums

Once you post your “tweet” to the Twittersphere, users that are “following” you will be updated with the pearl of wisdom you just posted

I admit, at first I didn’t “get” Twitter. It seemed like a pointless social-media distraction. I’m rapidly and drastically changing my mind

The best way to really understand Twitter is to sign up for it and start playing with it. Go to twitter.com and create a twitter account

Make sure you take the time to create a customized and branded profile. Include a link to your e-commerce or dealership website

Be warned going in, Twitter goes down a lot. Just Google “Twitter is down”. It happens so much, it’s *almost* become an endearing quality

Check out Twitter’s help site help.twitter.com to really understand all that you can do with it. As always, if you’re stuck, RTFM!

Posting to, and managing followers is an excellent task for your Community Relationship Manager!

Publicize your dealership’s twitter ID and encourage people that visit your shop or your site to sign up for twitter and to follow you

Put your twitter ID on your printed receipts, on your business cards, add a “Follow Us” link to your website and in your e-mail marketing

You need to understand some of the tools and technique of the twitter “language.” First, a tweet is the name for a twitter post

Next, you will see the @ symbol in tweets. This is a way for directly referencing or replying to another twitter user. Mine is @radicalpower

Another symbol you will see is #. It’s an unofficial trick that has evolved among twitter users to tag or categorize post content #ecommerce

Another convention you will see is RT for Re-Tweet. When you read something really interesting that deserves wider distribution you RT it

Here’s how it looks together: RT @radicalpower- I’m writing a great article for #Dealernews on how to use #twitter for motorcycle dealers

Twitter has really become more of a technical infrastructure. To get the most out of it you’ll want to use some of the twitter clients

Two of the most widely used and recommended twitter clients are www.twhirl.org and www.tweetdeck.com. Try them out for yourself and use one

There are some cool applications that tap into twitter so people can analyze the real-time twit-stream to see what the world is thinking

Check out Twist twist.flaptor.com to track trends or keywords and Twitscoop www.twitscoop.com to see what terms are waxing or waning

There’s even an easy to use tool, twitpic twitpic.com that lets you post pictures through twitter.

Because you only have 140 characters, it’s hard to enter long urls when you want to direct people to a certain site or page

The solution to this is to use a URL-shortening service. Tinyurl.com is the most popular but there are hundreds more See: tinyurl.com/yp8cba

A user-generated directory has popped at wefollow.com. You simply tweet to @wefollow with 3 #category to get listed

So the big question you have to be asking is, OK this is all very interesting, but how can I use this to make more money in my shop?

On the e-commerce side, you can tweet to all your followers when you add new, cool products to your website. That will drive traffic & sales

You can also run RT-based contests. Tell people that if they re-tweet a product detail page, or blog post they have a chance to win a prize

Follow this link http://tinyurl.com/cg8euq for a Google search on “retweet contests” to see some ideas of what others are doing

You can publicize web discounts or in-store specials that are good with a code that you tweet. This gives people motivation to follow you.

Build a social media ecosystem with twitter that points people to your blog posts, and a blog link that points people to your twitter ID

When people follow you, or RT you, make sure you thank them via a Direct Message or publicly via an @reply. Don’t forget to follow them back

You will want to make sure that you do frequent searches on twitter for you company name to keep track of what people are saying about you

I hope you found this series of tweets on Twitter informative and I invite you to follow me on twitter @radicalpower

And yes, each of the points above were under 140 characters!

Tags:Column, dealerships, E-Commerce, ecommerce, internet, marketing, motorcycle, powersports, Powersports Industry, pr, Search Engine Optimization, selling-online, social marketing, social media, social-networking, Twitter

As I’m sure you’re well aware, the economic model that currently supports most of Western Civilization appears to be in the process of a major melt-down. These tough times are going to call for some creative thinking to pry the money you need to keep your doors open from the hands of the customer that is worried about keeping their job or paying their mortgage.

This month I’m going to talk about discounting and other promotions. In the past I have laid out my general philosophy that if you run a proper operation you should not need to think too much about discounting. I still hold by that sentiment. I’m not talking about some kind of grand fire-sale along the lines of those furniture stores that seem to be going out of business every other week.

What I am talking about are developing, and more importantly communicating, discount-type promotions that entice a shopper to buy from you if they were not going to buy from you in the first place, or to buy more from you if they were buying anyway.

An over-arching theme is that you never give anything away for free. If you are giving it away (cue the Red Hot Chili Peppers), then it’s only logical that the customer is not going to ascribe any value to it. You want to come up with some manner of telling your customers that you are buying something for them. After all, that’s what you’re doing, so why not position it that way?

Some people may consider it a matter of semantics but I think it’s an important distinction if you are trying to do some type of discounting yet retain a brand identity different from the multitudes of internet discounters.

For example: You are not offering “free shipping.” You are paying for the customer’s shipping. So instead of “Free shipping on orders over $150″ you need to communicate it like “Spend over $150 and we’ll pay your shipping.”

Yes they are functionally equivalent, but I think the latter has more value. Sure not everyone is going to look at it that way, but it helps. And it’s the thought process behind this that should be driving you as you craft discount or promotion methods.

A next point is to remember that your goal of discounting should be to get people that would not otherwise buy from you at full price to buy from you at a price that you are still willing to accept.

Let’s say that you run a promotion that requires customers to enter a discount code at check out to get 20% off their orders. I would say that in most circumstances that you would want to publicise that code to customers via advertising like e-mails or off-line print ads, but not publicise the code on your site. If someone hits your site off a Google search with the intent of buying something you’re selling, and they are willing to pay full price, why in the world would you be willing to accept less? Use the e-mails and print ads to drive incremental traffic to your store and the discount to increase conversion.

A lot of this is going to depend on the type of business you run and the type of normal customers & traffic you have buying from your site. You need to do some in-depth analysis of your analytics and sales data from the past. The goal should be to come up with discount methodologies that enable you to get full price from people that were willing to pay full price going in.

Next, you should try to come up with methods to coax a higher level of spending from people already buying. A good way to do this that also brings them back on a later date to buy more are instruments like gift certificates that are good for a certain dollar amount once they spend over a set limit. Say, “spend $300 today and we’ll email you a gift certificate code good for $30 off your next order.” You are hopefully pushing those customers sitting there with $250 in their cart to add another $50 to get the $30 gift certificate that they may use another day. And of course hopefully on that next visit they spend more than the $30.

Obviously you’ll again have to dip into your analytics and sales data to try to come up with the thresholds and values that make rational business sense for these types of promotions.

And finally here’s one of those brilliant ideas that keep you coming back to read my column every month. Because so many of you non-snow vehicle related retailers are sitting there looking out of empty showrooms at piles of the white stuff, here’s an idea to generate some cash now and defer the outflow until you’ve got more organic sales going on in the spring. Sell something like a “spring certificate” on your site that is good for a certain percentage above the face value when used between certain dates in the future (the certificate’s magic window).

Here’s an example: “Buy our Spring Certificate this week for $200 and when you come back and use it between April 1 and May 31 and we’ll increase the value to $250!” If they use it outside the magic window it’s still worth the face value of $200. This allows you to get cash from the customer now on your books with a potential liability for a lower margin during a set window when you should be generating enough sales to cover it. And I can promise you that not everyone will use it during the magic window. And of course there’s even a percentage of people that will never use it at all. You do realize that some estimates put the amount of money that will sit there unspent on those “gift cards” around $10Billion for 2008? It’s possible that the amount of people that don’t spend all of their $200 at all may make up for the loss in margin from the discount.

Fine print: I’m sure there’s some accounting and/or legal magic your controller and lawyer are going to have to perform to account for the future liability, cash flow, proper wording, etc., etc., etc. so make sure you get all that squared away before you launch something like this.

I’m going to leave you with one overarching theme that I recommend you use in all of your advertising and marketing messaging: motorcycles and powersports are the ultimate escape from the strife that people are being bombarded with every waking moment these days. Motorcycles and powersports have always been about freedom and getting away from it all. If you’re bombing through the woods on a dual sport you typically don’t have a lot of spare brain-cycles to be worried about your mortgage. If your cruising past the majestic Grand Tetons with your significant other behind you and soaking it all in, you typically are not thinking about the annual return on your 401k.

We are in the escape business. Economic realities may be dictating that people are not buying new bikes, but we can sure as heck make sure we help them get the parts, accessories, and gear they need to get out and enjoy the vehicles they already own. Intelligent discounting and promotions in your e-commerce operation can be a huge help. For them, and for you.

Tags:Column, dealerships, E-Commerce, ecommerce, internet, marketing, motorcycle, powersports, Powersports Industry, selling-online

As promised here’s my presentation from this year’s (2009) Dealernews Live session. Obviously just looking at the presentation you will be deprived of the immense wit and intelligent insight that my commentary provides in the live session, but hey!

As usual, if you have any questions or issues let me know in the comments section below.

Tags:DealerExpo, Powersports Industry, Presentation, Search Engine Optimization