Tag: EFG Companies

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Business Growth

Where Are You Making Your Money?

While February numbers showed major unit sales up 13.4 percent, March 2022 numbers from CDK Lightspeed DMS revealed revenue from new and pre-owned sales declined by more than four percent as compared to March 2021, based on composite data from 1,700 dealerships in the U.S. The only positive number in the CDK data was a 4.7 percent increase in service department revenue, countered by an 8 percent decrease in parts revenue. Clearly, consumers are choosing to repair their current bike – if they can get the parts!

Supply chain challenges continue to plague the powersports industry. From new units to used units to parts, 86 percent of dealers said their inventory was too low in the first quarter of 2022. According to the Q1 2022 Powersports Business/BMO Capital Markets Dealer Survey, low inventory woes have increased from Q4 2021. And the pain is being felt across all powersports segments.

While inventory levels may remain dismal for several months, there are strategic opportunities to generate revenue. Let’s consider three tactics that generate profit and strengthen customer engagement.

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Featured

Winning with Excellence

As we close out the first quarter of 2022, powersports dealers are seeing some positive signals, mixed with some areas of concern. According to CDK Lightspeed DMS, revenue from new and used units grew 3.4 percent in January 2022, versus January 2021. Service saw a 1.4 percent decline as compared to a 13.2 percent increase in December. Overall, average dealer revenue was up 3.0 percent for the month. While this is down notably from the high-flying days at the beginning of the pandemic, it’s still a positive.

Areas of concern continue to be available inventory for both new and used units as well as the rate of inflation. Speaking of inflation, a new wrinkle popped up this month as the Federal Reserve raised their interest rate a quarter of a point and signaled six more increases planned for 2022. While these moves are made to tame the rise of inflation, the impact the average consumer can expect to see includes increases in the interest charged on credit card revolving debt, higher mortgage rates, as well as auto and powersports loans.

This monetary tightening may not affect powersports customers immediately. But there is one area that dealers can boost right away….and it might even be free. Dealers can ensure that the entire ownership experience for their customers is one filled with excellence. This intangible, anecdotal attribute will lock in the sale today and for every repeat interaction. It can even bring new customers to the store in the form of referrals and stellar reviews. All it takes is the commitment from every team member and business partner to ensure that each customer engagement is performed with excellence!

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Categories
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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