Selling Online #36 : Joining The Evil Empire

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.

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