PERFORMANCE

® THE SALE!

Are Dealers Obsolete?

By Mark Rodgers

Tesla sells direct. Carvana and Vroom promise a dealer free car buying experience. Setting aside state franchise laws, and servicing, here’s the question: Is the current dealer distribution model obsolete?

Twenty-five years ago, retail consumers’ expectations were framed by doing business with the likes of Fed Ex, Subway, and Disney theme parks. Overnight delivery, make-it-your-own sandwiches, and precision, familyfriendly experiences seemed like the height of retailing.

Those days are gone. Today retail consumers’ expectations are set by one primary source: Amazon.

The Amazon Effect

From the comfort of my own couch, wearing my Amazon acquired Mighty Mouse PJs, and drinking my Amazon subscriber delivered Lion’s Mane coffee, if I want to buy something, anything really, I can do it on Amazon.

And my experience has been scientifically engineered to make me do one thing: Buy. From the products that I’m shown (If you like that, you’ll love this!), to the way the price is presented (List price no! Current price low. Savings shown in both pragmatic dollars and mathematician percentages.), to the butwait-there’s-more! offer to get a lower price I sign up for a new Mastercard in my Amazon wallet, it’s all designed to for one objective: click the buy button.

It’s a no pressure shopping utopia. I can put items in my cart and easily take them out. I can create lists for just me to see and lists I may want others to see. If it’s a book or music, I can sample it. I can set my purchases aside, to think about because at Amazon apparently there is a be-back bus.

If it’s a complicated purchase I can instantly see FAQs posed by other curious shoppers. I can instantly see a rating system and read purchasers reviews, organized by most positive and most critical (man, these guys are good). There are close up photos, there are videos, and I can even pose a question to someone whom, presumably, knows something about the product.

Then there is the add-on selling second swing. Comprised by “frequently bought together” suggestions (always compelling), products related to this item (kind of compelling), and suggestions based on your shopping trends (now, we’re talking!). Now that’s one enticing rabbit hole.

Not to mention Amazon even figured out the subscription trend with the ability to schedule regularly used items (often household consumables like coffee, paper towels, etc.) under their “Subscribe and Save” option with predictable sales for Amazon and an additional 15% price reduction for you.

Combine this retail precision, with a fragmented, polarized, tech connected society, mix in a bit of pandemic lockdown and you have a recipe for retail world domination.

Well, I don’t know about every OEM and every facet of dealer profitability, but I do know that Jochen Zietz and company have made the decision to pull HarleyDavidson branded merchandise from Amazon.

In my opinion, an excellent decision. Not just for those merchandise dollars being driven back into the stores, but for the real opportunity it presents. And that is to build real relationships with people we may have otherwise never had the chance to meet.

Think You’re Fast?

Faster than a record setting Bonneville run, Amazon transactions are completed with blinding speed. With Amazon’s “Buy now with 1-Click” button you can instantly purchase your items. They’ve even done away with most of the “are you sure” type messages. Amazon wants no second guessing. You click it you bought it.

And, of course, with digital delivery the gratification is instant. I open my iPad and my newly purchased Kindle edition book is already in my library ready to read (and when I finish the last page, I’m transported to what book I should get next). But what about physical product? Perhaps it’s because Amy and I live near an Amazon warehouse, but we have often placed an order Sunday mid-morning and had it delivered to our home by 2:00 that afternoon!

How does that compare to the dealership experience? Well, I’m embarrassed to say, I think there may still be a customer waiting for a clutch cable I ordered for him in 1989!

In terms of selection, price, reviews, add-ons, and delivery Amazon has transformed almost every aspect of retailing. Now, mercifully enough, our customers aren’t buying books, gym bags, or heaven forefend Tide Pods. But the traces of the Amazon experience expectation remain with consumers as they do business elsewhere.

Biased Feedback?

When I asked my Harley-Davidson dealership Facebook community – an albeit self-selecting, passionate sample – if they thought the current dealer model was obsolete, here are a few of their comments. (Edited for readability, concision, and you know, profanity.):

Chad Anderson, Gruene Harley-Davidson: Obsolete no, but easily capable of losing ground to emerging technologies, certainly. Now is the time to really consider what keeps a dealership’s doors open - immediate revenue or name evangelism.

Erik Bacon, House of Harley-Davidson: The percentage of folks buying a bike without a test ride is pretty small during the peak season. Selling direct won’t allow for this nor does it allow for the “make it your own” aspect.

Sam Watson, Salem Harley-Davidson: The human element of the dealership experience definitely sets it apart from Carvana and Vroom. But going to a motorcycle dealership and a car dealership has never been the same. Car dealership visits are historically dreaded. While motorcycle dealership visits are cherished. Also, most car transactions are made with logic and practicality based on needs while the Harley-Davidson purchase is made with fun and style in mind and the decision will be based on passion. There will be an emotional connection to the bike unlike the grocerygetting-commute-to-work car you shopped online for the cheapest one you could find.

George Wunschel, Bergen County Harley-Davidson: If we’re not careful, it could quickly become obsolete. Many of the “new customers” want instant gratification and if they can’t get it, they lose interest. We need to educate the customer that a premium experience takes time.

Matt Laidlaw, Laidlaw’s Harley-Davidson: The dealer model isn’t obsolete, the way operators run the dealer is obsolete. People want more transparency and fewer “games” designed to screw customers for profits.

Rob Bonner, Chippewa Falls Harley-Davidson: We need to take the best of online practices and blend into our daily brick and mortar lives.

Sean Delaney, Thunderbird Harley-Davidson: Parts of the dealer model are obsolete, but not all. People want to buy differently now; they want it faster and easier. However, they still want to be treated with respect and have a kick ass buying experience. When you can combine the digital world, the Harley-Davidson dealership culture, great motorcycles, and great experiences it can only get better.

The Purchase Process

To stay relevant, we need to think differently. People often talk about the “sales” process, but what you really need to consider is the “purchase” process. If you really want to understand something you have to try and see it through the other person’s windscreen.

New prospective motorcycle buyers may ask themselves: How do I do it? Is it safe? Is it fun? Which one is for me? Do I have to be licensed? Can I afford it? Is it like buying a car? Will I get taken advantage of? Will I get approved? What about insurance? Will I need boots? Will I fit in?

Repeat purchasers will have a host of different questions: Should I get another one of these or something else? Is my salesperson still there? I never used the service plan; do I need it this time? And on and on.

We need to think about how we can most effectively, honestly, and compellingly answer those questions bringing new people into the sport, I-used-to-ride people back to the sport, and increase the frequency, intensity, and duration of motorcycling by our current customers.

Whether a prospective buyer is brand new or long-term, the phases customers shift through as they consider purchasing, is something I call Mark’s Purchase Power Train.

They include: The Spark, The Search, The Bike, The Price, The Dealer, The Decision, and The Ride. And all include a dizzying array of touch points and opportunities for dealers.

But if you really want to simplify retailing, it has just two components: the shopping experience, and the checkout experience. The former, you want to make as long and as enjoyable as possible. The latter you want to make as fast and painless as possible.

World Class Retailing

How can you delineate your dealership from the Amazon Effect? One element is to simply be a great host. When someone has taken the time to pry themselves from their Netflix binge, put on a mask, and brave the pandemic to come and see you, it’s time for you to shine.

Take Sean Delaney, Operating Partner, Thunderbird HarleyDavidson, whom we heard from earlier.

When people express an interest in a bike or a test ride at Thunderbird either over the phone or virtually, when they show up at their brick-and-mortar location, they are greeted with their name on a huge sign welcoming them to the dealership. With their bike of interest outside, cleaned up, literally with their name on it, pointed towards the freedom of the road.

When you show up at Thunderbird, the salesperson is not dumbfounded by who you are, or what you want. They don’t fumble around looking for the keys, or have to find the bike, or cross their fingers hoping it fires up. They are ready and waiting for you.

Because your time is precious, and they want to make your Thunderbird buying experience extraordinary. Sean and his crew understand next generation retailing and the importance of faster, easier, and better.

Sean tells me that Thunderbird has one unique customer – a woman in her eighties – who has in recent years purchased four or five motorcycles. She does all of her paperwork ahead of time and when she shows up, she simply signs and rides.

Why? She realizes she doesn’t have a moment to waste and doesn’t want to spend “transaction” time at the dealership.

Of course, Thunderbird Harley-Davidson is just one example. There are many of you who get it, too. And there are also far too many who don’t.

We need to make the motorcycle shopping experience luxurious, educational, enjoyable. We need to make the checkout as fast and as painless as possible.

Mark’s Mothers Of Reinvention

Are dealers obsolete? No way. Are we in need of reinvention? Absolutely. We need to streamline the nuts and bolts of the transaction. Working hand in motorcycle glove, with OEMs, suppliers, and partners we need to get faster, fast.

Whether that is information self-entered, online by the customer, or self-entered with dealer guidance online, or whether this is preparation by dealership staff prior to arrival, the key is to treat the “face time” in the dealership as a precious resource to not be squandered.

•Entering customers’ information into the DMS

•Preliminary information about licensing, riding, and product

•Initialization or pre-approval of credit application

•Advice or guidance about potential additional loan approval requirements

•Insurance estimates

•The generation of documents

•The preparation of the motorcycle

Some will see this, hem and haw, and say, what if the bike isn’t sold? or what if they don’t come in? or what if they can’t get approved? Well, bad things happen, but we can’t live our lives in fear about what might happen.

You have to go through every aspect of what it is you do and ask yourself, “From the customer’s perspective, how can we make doing business with us easier, faster, and better?

Remember Your First Time?

When we work at the dealership every day, we become numb to just how cool our space can be. But if you’ve ever watched a new person enter one of our stores it reminds us of what we do and why we do it. Think back to when you’ve watched a new person enter your store…

Warily entering the dealership like a rabbit suspecting a hungry fox to appear at any moment they step inside. Realizing they face no impending doom; they straighten their back and feast on the sensory stimulation coming from all angles.

Continued from page 32 An intoxicating aromatic mix of rubber, leather, Cosmoline, and just a hint of exhaust fills their nostrils. Rows of gleaming motorcycles stand like sentinels protecting their space. Their symmetry and jewel-like paint jobs amplify their magnificence.

Scanning the 25-foot-high ceilings, where huge black-andwhite photographic prints show hearty early-20th-century bikers engaged in rugged adventure that would make even the most ardent contemporary yearn for simple times and long rides.

In stark contrast, a huge high-definition screen burns brightly with footage of a rock band singing about rebellion and freedom, with a mesmerizing beat thumbing through the sound system. The rumble of throaty engines out back and the sound of laughter from a trio of friends standing near the coffee pot round out the symphony.

“First time?” A smiling, friendly face staff member asks.

“Yeah.” Our guest replies, continuing to scan his surroundings.

“Cool, huh?” Grins the staff member.

Approval comes fast and complete. Our captivated new friend says, “Yeah. Very cool.”

And so, it begins. And we can never forget what it means to provide that in-person experience.

Dealership Differential

You can see the paint job online, but it can’t be appreciated until its seen in person gleaming on your dealership’s showroom or rolled outside to bask in the sunlight. You can hear a motorcycle run on YouTube, but you can’t really experience the sound washing over you until you’ve stood alongside it, twisted the throttle and felt it resonate in your chest.

You can see the grips and the seat in the pics online, but there’s few things to describe just how perfect the grip feels in your hand or how you are cradled in the seat.

You can see a jacket is a large online, but don’t know if the cut is right until you slide it on. You may think a helmet looks right, but until you tug it on, you won’t know if it fits your head.

Someone can send you a text message, but few things replace what happens in your soul, when you walk in and someone shouts from across the showroom, welcoming you by name: “Yo! Steve! Where you been, man?” Because it feels like home.

And there is simply nothing, nothing like the energy felt, when you’re hanging out with likeminded others. In a place where you know you belong.

Logic Vs. Emotion

Some will deride these ideas as sentimental or emotional nonsense. After all, contemporary business is about lead conversions, dollars per square foot, and gross margin return on investment.

Logic makes us think. Emotions make us act. It’s easy to lower prices and appeal to someone’s logical economic self-interest. It’s very difficult to create and sustain an exciting, convivial in-person experience. The former is a doom loop. The latter leads to a virtuous cycle of success.

There exists both the motorcycle business, and the business of motorcycles. We have to be good at both. Ignore the emotional components of your dealership retail experience at your future’s peril.

The Balance Sheet

In a recent conversation with former long-time HarleyDavidson executive and current business consultant Jerry Wilke, he said something that really resonated with me:

“Mark,” Jerry stated emphatically, “One of the most important assets that Harley-Davidson – or any OEM has for that matter – can’t be found on their balance sheet; It’s their dealer network.” I couldn’t agree more. Here’s to a bigger, better, faster dealer network. And to a bigger, better, even brighter future.

Vive la Dealer!

Be sure to tune into: SALES SUCCESS IN 60 SECONDS OR LESS as sales expert and award-winning Dealernews columnist Mark Rodgers shares how to accsellerate® your sales. Watch Mark explain the guiding principle of how to succeed in the motorcycle business even in these stormy times. (FYI, Mark only counts the content after the whizbang video open in his time limit, so start your stopwatches then!) Mark Rodgers is an award-winning speaker, best-selling author, and sought-after consultant, who has spent 33 years working in the Harley-Davidson industry. Check out his 60-second sales tips twice a week at Dealernews social media channels or contact him via e-mail: Mark@RodgersPC.com

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