Category: Business Growth

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Business Growth

Got Pre-Orders? Don’t Forget the Back End

The results of the Q1 2022 Powersports Business/BMO Capital Markets Dealer Survey have been released, reflecting a distinct change in sales. For the third consecutive quarter, 27 percent of responding dealers indicated their business was below plan, 12 percent were ahead of plan and 61 percent were on plan.

The February CDK Lightspeed Dealer Management System report showed a bit of a bright spot with major unit sales up 13.4 percent versus February 2021. Revenue also increased 11.3 percent as compared to the three percent gain in January 2022. But these numbers are a far cry from the roaring revenue generated during the height of the pandemic.

The primary culprit of these below-plan numbers is lack of new unit inventory. The supply chain continues to wreak havoc on manufacturing, prompting OEMs to ship bare bones chassis to dealers in order to have something to fill the showroom. The continued microchip shortage coupled with rising inflation and gas prices is impacting everything from gauges to sensors for new units. As these items trickle in, dealers are quickly installing parts to move completed units out the door.

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Business Growth

Digital Sales Drive 2022 Success

Does it feel like aside from news on the pandemic and supply chain challenges, the mantra for the last two years has been digital sales? Even at the 2022 AIMExpo, “digital” was the word on everyone’s lips. Panelists stated that the bulk of powersports customers have spent significant time online researching bikes and financing before they ever set foot in the dealership. Analysts report that 90 percent of powersports sales begins online, yet nearly 85 percent complete the sale at the dealership.

If you are not using an omnichannel approach to engage the customer on the digital platform of their choice, with accurate, easy-to-navigate information, then chances are that customer will never make it to your dealership.

Train for digital sales

Engaging with a potential customer in a digital setting is very different than the dealer floor.  Understanding the customer’s needs and moving them through the sales process in a virtual platform requires certain skillsets.

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Business Growth Powersports Market

Keep the Banner Flying in 2022

For powersports dealers, 2021 is shaping up to be another banner year, mirroring the record setting gains made in 2020. Regardless of continuing inventory issues caused by pandemic supply chain bottlenecks, units continued to hit the road. While on-road unit sales repeated their decline, off-road and personal watercraft unit sales increased exponentially. Powersports has proven to be a balm to ease consumers’ pandemic malaise.

Will the good times continue? For 2022, demand for off-road and personal watercraft vehicles is expected to remain high. Once manufacturers begin producing more units at scale, dealers can expect the 30-point margins enjoyed during the boom years to begin to decline as supply chain issues resolve. For some, it will be tough to wean themselves from those lofty profits. Dealers who pay close attention to market pricing – and adjust accordingly – will continue to show strong sales and market penetration. Dealers who cling to those margins may find themselves priced out of the market, even though consumer demand remains high.

The key to a successful 2022 will be based on implementing a consistent sales model at prices the market can bear, with a focus on creating long-term customer relationships. Training for all staff members on financing and protection products will also be key to boosting revenue as the sales process evolves to incorporate more online resources. Savvy dealers know there is more than one way to generate profit from a sale. Adopting a more ‘full service’ approach within the dealership will keep those customers coming back.

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