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MAY 2012 V O L . 4 8 . N O . 5 M AY 2 0 1 2 DEALERNEWS.COM ADVENTURE TOURING OVERVIEW • DUCATI/TRIUMPH NEWPORT BEACH • KEVIN FREIBERG INDY RECAP ADVENTURE TOURING BOOMING SEGMENT IS A JACKPOT FOR AFTERMARKET SALES SPRING HAS SPRUNG EARLY THAW LEADS TO JUMP IN SEASONAL SALES PARTS = PROFIT HOW TO MAKE YOUR PARTS COUNTER START GENERATING THE GREEN LEFT COAST LOVE DUCATI/TRIUMPH NEWPORT BEACH CAPITALIZES ON LIFE IN THE O.C. www.dealernews.com For more information visit www.Dealernews.com/readerservice COM #M1TWOBOOT AVAILABLE MARCH 2012 MSRP $144.95 CONTOURED LOW PROFILE THERMOPLASTIC TOE BOX REINFORCED SHANK & FOOTBED KICK YOUR FEET IN THE TEETH TRACK HEADS AND RPM ADDICTS; BEHOLD THE 2ND GENERATION M1² BOOT. THE ORIGINAL M1 BOOT EXPERIENCE WAS LIKE NO OTHER IN ITS CLASS, FEATURING AFFORDABLE COMFORT. THE M1² BOOT HAS MAINTAINED ITS CORE VALUE WHILE EXPANDING ITS COMFORT WITH A LOW PROFILE TOE BOX. A REINFORCED SHANK & FOOT BED ALLOWING FOR ULTIMATE SUPPORT. GENUINE SPLIT GRAIN LEATHER CHASSIS, CONTOURED THERMOPLASTIC SHIN, ANKLE, & TOE PLATE, HEAVYWEIGHT SUEDE LEATHER INNER CALF GUARD, THERMOPLASTIC BUCKLE WITH STEEL HINGE. AVAILABLE IN BLACK WITH ATV OR MX SOLE & IN WHITE WITH MX SOLE ONLY. MOOSE RACING HAS SPARED YOU THE EXPENSE OF HIGH PRICED PROTECTION. SAFETY SHOULDN’T COST YOU AN ARM AND A LEG, THESE BOOTS WON’T EITHER. VOL. 48. NO. 5 MAY 2012 CONTENTS 12 DEALER LAB — FEBRUARY NET INCOME TRIPLES FROM ONE YEAR AGO Used inventory still not being replaced fast enough, owner says by Joe Delmont MANAGEMENT 14 COVER STORY — LOCATION, LOCATION, LOCATION Ducati/Triumph Newport Beach is a perfect mix of site, brand and service by Bruce Steever 22 HOW TO GET OUT OF YOUR OWN WAY Indy’s keynote speaker on the incestuous nature of the industry, and what dealers can do to stop feeling like economic victims by Holly Wagner SALES 26 DEALERS JUMPSTART THE 2012 MOTORCYCLE SEASON Warmer-than-usual weather has fostered earlier-thanusual sales. But will it matter? by Arlo Redwine 30 OVER THE RIVER AND ... TO THE OFFICE? Look to the aftermarket for the full picture in the adventure-touring trend by Dennis Johnson 36 RISE OF THE AMERICAN SPORTBIKE? Motus Motorcycles aims for the well-oiled dealer network with premium sport touring motorcycles by Dennis Johnson SERVICE 40 FUEL FOR THOUGHT — DAVE KOSHOLLEK How to cover yourself in a legal case Want to lessen your legal risk? Then ‘don’t give it away’ 42 TOOLS AND EQUIPMENT MARKETING 43 SPREADING EURO GOSPEL Longtime Seattle-area dealer launches show to spotlight European motorcycle, aftermarket brands by Dennis Johnson 46 DEALERSHIP UNIVERSITY — ROD STUCKEY Direct mail, telemarketing still work Supplement your online marketing with strong offline efforts DEPARTMENTS COLUMNS 5 Questions......................................... 8 ShopTalk ........................................... 11 Advertiser Index/Customer Service .. 55 From the Editor ................................ 10 Dave Koshollek ................................. 40 Dealership University ........................ 46 Rick Fairless ...................................... 56 COVER MAIN OFFICE 2501 Colorado Avenue, Suite 280 Santa Monica, CA 90404 Ph: 310.857.7500 www.dealernews.com Brand Director – Kerry Graeber [email protected] CONTENT General e-mail: [email protected] Content Director – Mary Slepicka [email protected] Editor-in-Chief – Dennis Johnson [email protected] Senior Editor – Arlo Redwine [email protected] Associate Editor – Cynthia Furey [email protected] CONTRIBUTORS Contributing Editors – Joe Delmont, Holly Wagner Contributing Writer – Bruce Steever Columnists/Bloggers – Eric Anderson, Joe Delmont, Rick Fairless, Dave Koshollek, Mike Vaughan DESIGN Group Art Director – Beth Silva [email protected] Photographers – Jeff Barger, Joe Bonnello, Brett Flashnick, Branimir Kvartuc, Edward Linsmier, Gary Rohman Color separations and film produced by Advanstar Communications’ Scanning and Digital Prepress Departments EDITORIAL ADVISORY BOARD Eric Anderson, Morris Baker (Family PowerSports), John Beldock (Erico Motorsports), Gary Christopher (American Honda-retired), Joe Delmont, Tom Hicks (Southern California Motorcycles), Dave Koshollek, Bob Ladd (Shenandoah Harley-Davidson), Nathan Reeves (RevSport!), Bill Shenk (PowerHouse Dealer Services), Mike Vaughan, Steve Zarwell (Zarwell and Co.) Content Submissions – Dealernews welcomes submissions for editorial consideration in print and/or on www. dealernews.com. All submissions to be considered for publication must abide by the Advanstar content license agreement. Dealernews cannot be held responsible for safekeeping or return of any submitted material. To review the license agreement, e-mail [email protected]. AUDIENCE DEVELOPMENT/CIRCULATION Kristine Buckman, [email protected] Subscriptions, reprints and other requests, see page 55 TOP 100 COMPETITION For information, visit www.dealernews.com/ top100 or contact Mary Slepicka: [email protected] A stone’s throw from the Pacific Ocean, Ducati/Triumph Newport Beach makes the most of its location in Orange County, Calif. Photo by Joe Bonnello. 2 D E A L E R N E W S . C O M MAY 2012 DEALERNEWS.COM Record breaking vehicle to vehicle intercom communication up to ONE mile Pairs via Bluetooth® technology with your phone, your MP3, or GPS New voice recognition technology Works with up to 8 additional G9 users The all New Scalarider® G9 BRINGING YOU THE BEST SERVICE, PRODUCT, AND DELIVERY! 1-800-999-3388 For more information visit www.Dealernews.com/readerservice THIS MONTH @ DEALERNEWS.COM MANAGEMENT SALES SERVICE MARKETING DEALER EXPO SHOP TALK PRODUCTS POWERSPORTS GROUP MANAGEMENT TOP 100 TOP 10 LIST Corporate Executive Vice President – Danny Phillips Sales Director – Jim Moore Brand Director – Kerry Graeber Brand Coordinator – Jeanne Paloma ADVERTISING, SPONSORSHIPS AND E-MEDIA SALES Last month’s most popular stories 1. Motus Motorcycles reveals pricing, specs, initial dealers 2. ‘Hangtag’ class action suit gets new trial in California RISE OF THE MOTUS On page 35, Dealernews editor Dennis Johnson explores Motus Motorcycles’ inaugural dealer network and the possibility of another Great American Motorcycle. For the full story, log on to www.dealernews.com/Motus12. 3. MAG buys Motorcycle Superstore, aligns it with J&P Cycles to form mega Retail Group 4. Dealer says Enough!: DHY’s Donna Coryell confronts would-be thieves behind store 5. Lehman Trikes suspends operations Group Sales Director – Jim Moore, 949.954.8400, [email protected] National Sales Manager – Angela Gibbs, 815.882.7871, [email protected] Showcase, Classified and Recruitment Sales – Megan Russo, 440.891.2713, [email protected] Sales Coordinator – Christina Anders, 949.954.8428, [email protected] Outside the United States: China – Frances Wang, [email protected] Germany, Austria, Switzerland, The Netherlands – Hendrik Schellkes, [email protected] India – Divya Guliana Khanna, [email protected] Italy – Monica Tomei, [email protected] Pakistan – Muhammad Ayyob, [email protected] Taiwan – Sherman Ko, [email protected] UK, Denmark, Norway, Sweden, Finland – Alastair Swift, [email protected] MEDIA OPERATIONS www.AdsAtAdvanstar.com 6. GoGo Gear’s Battishill jumps into ABC’s Shark Tank ESCAPING THE ‘SHARK TANK’ GoGo Gear founders Arlene Battishill and Desiree Estrada survived the ABC reality show “Shark Tank.” Dealernews talks with Battishill to get the inside scoop on their experience, of which you can read a partial transcript on page 10. For more, visit www.dealernews.com/Battishill. 7. Piaggio unveils new models, prototypes bound for North American market 8. Honda updates scooters for 2013, announces returning ATVs 10. Jeremy Cupp wins GET YOUR NEWS FEEDS FROM DEALERNEWS Ultimate Builder Custom Bike Show national championship Dealernews delivers the industry’s breaking news and Web exclusives through email with the DealerNEWS ALERT, distributed on Tuesdays and Fridays. Monthly DealerNEWS reports also bring you the latest in the American V-Twin market, new products, dealership management and service management. Best of all, your subscription is free! Sign up at www.dealernews.com/ enewssignup — or contact [email protected] for help. Follow us on Twitter: Check out www.twitter.com/ dealernews for industry news and updates. www.dealerexpo.com SHOW OPERATIONS Vice President-Operations – Tracy Harris Director of Operations-Dealer Expo – Lorri Monty MARKETING Vice President-Marketing – Allison Lombardo Retail Relations Coordinator – Ryan Adams www.motorcycleshows.com For more information on exhibiting/supporting the Progressive International Motorcycle Shows, contact Jim Moore, director of sales, at [email protected]. CORPORATE HEADQUARTERS 2501 Colorado Avenue, Suite 280 Santa Monica, CA 90404 Ph: 310.857.7500 • Fax: 310.857.7510 www.advanstar.com Become a fan of Dealernews on Facebook @ www.facebook.com/ dealernewsfan DEALERNEWS.COM DEALER EXPO EXHIBIT SALES Sales Manager – Peggy Zamberlan Sales Account Managers – Matt Cavanaugh, Cass D’Arlon, Angela Gibbs, Patti Ros Sales Coordinators – Christina Anders, Bonni Finer 9. Industry will sell fewer new motorcycles in 2012, MIC says 4 Senior Production Manager – Karen Lenzen Production Manager — Jesse Singer NEW PRODUCT OF THE DAY Each day, Dealernews posts information on a new aftermarket product that’s just been released so that you get the 4-1-1 within days of its unveiling (and sometimes before it’s even publicly announced!). Check out the home page at www.dealernews.com every day for your daily product “news feed.” M AY 2 0 1 2 President & CEO – Joseph Loggia, EVP-Finance & CFO – Ted Alpert, EVP-Corporate Development – Eric I. Lisman, EVP-Powersports & Vet Groups – Daniel M. Phillips, VP-Operations (Powersports, Vet, License, Fashion Groups) – Tracy Harris, EVP Pharmaceutical/Science – Ron Wall, VP-Information Technology – J. Vaughan, VP-Electronic Media Group – Mike Alic, VP-Media Operations – Francis Heid, VP-Human Resources – Nancy Nugent, VP-General Counsel – Ward D. Hewins Insurance Risk Management Visit FandIResourceCenter.com or call 888-265-7524 for more information. With our Streamlined Selling System®, increasing your F&I profits can feel like a drive in the country. Zurich is here when you need more than just insurance. We are committed to making it easier for dealerships to earn the maximum per vehicle retail possible. Through Zurich’s exclusive Streamlined Selling System® our Elite Performance dealership customers earned an average F&I profit of $864 per vehicle sold—with our top 20% earning an average of $1,208*. A local Zurich F&I specialist can help you achieve this same success through our proven income development program. Here to help your world. For more information visit www.Dealernews.com/readerservice Products and services are underwritten and provided by individual member companies of Zurich in North America, including Universal Underwriters Insurance Company and Universal Underwriters Service Corporation. Certain coverages and products and services are not available in all states. *Results based on 2010 data. Results also vary to the extent of sales volume and implementation and strict adherence to sales recommendations. ©2012 Zurich American Insurance Company HONORING OUR HARLEY-DAVIDSON DEALERS The Harley-Davidson Motor Company is proud to present and recognize the 2011 Bar & Shield Award Recipients, and those dealerships celebrating their 25th, 50th and 100th year as a continuously family-owned Harley-Davidson dealer. P L AT I N U M C I R C L E O F D I S T I N C T I O N A W A R D R E C I P I E N T S ( N AT I O N A L A W A R D ) Mother Road Harley-Davidson Kingman, Arizona Red Rock Harley-Davidson Las Vegas, Nevada Fort Worth Harley-Davidson Fort Worth, Texas Greeley Harley-Davidson Greeley, Colorado Cox’s Harley-Davidson Asheboro, North Carolina Longhorn Harley-Davidson Grand Prairie, Texas Wilkins Harley-Davidson Barre, Vermont GOLD CIRCLE OF EXCELLENCE AWARD RECIPIENTS CENTRAL REGION Indy West Harley-Davidson Plainfield, Indiana Adventure Harley-Davidson Dover, Ohio Powder Keg Harley-Davidson Mason, Ohio Black Wolf Harley-Davidson Bristol, Virginia NORTH PLAINS REGION Coziahr Harley-Davidson Forsyth, Illinois Chi-Town Harley-Davidson Tinley Park, Illinois Rawhide Harley-Davidson Olathe, Kansas Doc’s Harley-Davidson of Shawano County Bonduel, Wisconsin NORTHEAST REGION Brothers’ Harley-Davidson Branford, Connecticut Harley-Davidson of Ocean County Lakewood, New Jersey Harley-Davidson of Long Branch Long Branch, New Jersey Z & M Harley-Davidson Sales Greensburg, Pennsylvania SOUTH PLAINS REGION Mike Bruno’s Bayou Country Harley-Davidson Houma, Louisiana Southern Thunder Harley-Davidson Southaven, Mississippi Wild West Harley-Davidson Lubbock, Texas Caliente Harley-Davidson San Antonio, Texas SOUTHEAST REGION Adamec Harley-Davidson of Jacksonville Jacksonville, Florida Capital City Harley-Davidson Tallahassee, Florida Great South Harley-Davidson Newnan, Georgia Cox’s Harley-Davidson of Rock Hill Rock Hill, South Carolina WEST REGION Chandler Harley-Davidson Chandler, Arizona Bakersfield Harley-Davidson Bakersfield, California Chester’s Reno Harley-Davidson Reno, Nevada Lone Wolf Harley-Davidson Spokane Valley, Washington Mike Bruno’s Northshore Harley-Davidson Slidell, Louisiana Route 66 Harley-Davidson Tulsa, Oklahoma Independence Harley-Davidson College Station, Texas Corpus Christi Harley-Davidson Corpus Christi, Texas Mancuso Harley-Davidson Houston, Texas Beers Harley-Davidson Vernal, Utah SOUTHEAST REGION Peterson’s Harley-Davidson of Miami Miami, Florida Naples Harley-Davidson Naples, Florida Harley-Davidson of Ocala Ocala, Florida Adamec Harley-Davidson of Orange Park Orange Park, Florida Harley-Davidson of Atlanta Lithia Springs, Georgia Ray Price Harley-Davidson Raleigh, North Carolina Carolina Coast Harley-Davidson Wilmington, North Carolina Colonial Harley-Davidson Prince George, Virginia WEST REGION Superstition Harley-Davidson Apache Junction, Arizona Arrowhead Harley-Davidson Peoria, Arizona Bobby’s Territorial Harley-Davidson Yuma, Arizona House of Thunder Harley-Davidson Morgan Hill, California Dudley Perkins Company South San Francisco, California High Desert Harley-Davidson Meridian, Idaho Chester’s Snake Harley-Davidson Twin Falls, Idaho Santa Fe Harley-Davidson Santa Fe, New Mexico SILVER CIRCLE OF ACHIEVEMENT AWARD RECIPIENTS CENTRAL REGION Heart of Dixie Harley-Davidson Pelham, Alabama Andrae’s Harley-Davidson Urbana, Illinois Harley-Davidson of Bloomington Bloomington, Indiana Harley-Davidson of Kokomo Kokomo, Indiana Eagle Harley-Davidson Lafayette, Indiana Smoky Mountain Harley-Davidson Maryville, Tennessee Bumpus Harley-Davidson of Murfreesboro Murfreesboro, Tennessee New River Gorge Harley-Davidson Hico, West Virginia NORTH PLAINS REGION Reiman’s Harley-Davidson Kewanee, Illinois Conrad’s Harley-Davidson Shorewood, Illinois Calumet Harley-Davidson Munster, Indiana Big Barn Harley-Davidson Des Moines, Iowa Faribault Harley-Davidson Faribault, Minnesota Dillon Brothers Harley-Davidson Omaha, Nebraska Rough Rider Harley-Davidson Minot Minot, North Dakota House Of Harley-Davidson Greenfield, Wisconsin NORTHEAST REGION L-A Harley-Davidson Lewiston, Maine Harley-Davidson of Baltimore Baltimore, Maryland Chesapeake Harley-Davidson Darlington, Maryland Heritage Harley-Davidson Concord, New Hampshire Bergen County Harley-Davidson Rochelle Park, New Jersey McMahon’s Harley-Davidson Beaver Falls, Pennsylvania Three Rivers Harley-Davidson Glenshaw, Pennsylvania Brian’s Harley-Davidson Langhorne, Pennsylvania Appalachian Harley-Davidson Mechanicsburg, Pennsylvania SOUTH PLAINS REGION Renegade Harley-Davidson Alexandria, Louisiana New Orleans Harley-Davidson Metairie, Louisiana BRONZE CIRCLE OF RECOGNITION AWARD RECIPIENTS CENTRAL REGION Rocket Harley-Davidson Madison, Alabama Riders Harley-Davidson Trussville, Alabama Man O’ War Harley-Davidson Lexington, Kentucky Biker Bob’s Harley-Davidson Motown Taylor, Michigan Lake Erie Harley-Davidson Avon, Ohio Toledo Harley-Davidson Toledo, Ohio Neidengard’s Harley-Davidson Wintersville, Ohio Buckminns D&D Harley-Davidson Xenia, Ohio Appleton Harley-Davidson Clarksville, Tennessee Mike’s Harley-Davidson Sales Delbarton, West Virginia Charlie’s Harley-Davidson Huntington, West Virginia Harley-Davidson of West Virginia South Charleston, West Virginia NORTH PLAINS REGION Illinois Harley-Davidson Berwyn, Illinois Starved Rock Harley-Davidson Ottawa, Illinois Walters Brothers Harley-Davidson Peoria, Illinois Dubuque Harley-Davidson Dubuque, Iowa Bergdale Harley-Davidson Albert Lea, Minnesota Zylstra Harley-Davidson Elk River, Minnesota Mankato Harley-Davidson Mankato, Minnesota Worth Harley-Davidson Kansas City, Missouri Doc’s Harley-Davidson Kirkwood, Missouri Frontier Harley-Davidson Lincoln, Nebraska Stutsman Harley-Davidson Jamestown, North Dakota Rough Rider Harley-Davidson Mandan, North Dakota Black Hills Harley-Davidson Rapid City, South Dakota NORTHEAST REGION Rommel Harley-Davidson Annapolis Annapolis, Maryland Harley-Davidson of Frederick Frederick, Maryland Monadnock Harley-Davidson Swanzey, New Hampshire Atlantic County Harley-Davidson Galloway, New Jersey Liberty Harley-Davidson Rahway, New Jersey Barb’s Harley-Davidson W. Collingswood Heights, New Jersey Miracle Mile Harley-Davidson Great Neck, New York Valley Forge Harley-Davidson Norristown, Pennsylvania Gatto Harley-Davidson Tarentum, Pennsylvania Steel City Harley-Davidson Washington, Pennsylvania Horsepower Harley-Davidson Williamsport, Pennsylvania Triple S Harley-Davidson Morgantown, West Virginia SOUTH PLAINS REGION Mobile Bay Harley-Davidson Mobile, Alabama Mile High Harley-Davidson Aurora, Colorado High Country Harley-Davidson Frederick, Colorado Cajun Harley-Davidson Scott, Louisiana Kents Harley-Davidson Sales Abilene, Texas Cowboy Harley-Davidson of Beaumont Beaumont, Texas Dallas Harley-Davidson Garland, Texas Gruene Harley-Davidson New Braunfels, Texas Legacy Harley-Davidson Odessa, Texas Paris Harley-Davidson Paris, Texas Harley-Davidson of the Woodlands The Woodlands, Texas Harley-Davidson of Waco Waco, Texas SOUTHEAST REGION Fort Myers Harley-Davidson Fort Myers, Florida Harley-Davidson of Lakeland Lakeland, Florida Peterson’s Harley-Davidson South Miami, Florida Harley-Davidson of Pensacola Pensacola, Florida Treasure Coast Harley-Davidson of Stuart Stuart, Florida All American Harley-Davidson Hughesville, Maryland Harley-Davidson of Charlotte Matthews, North Carolina Harley-Haven Irmo, South Carolina Myrtle Beach Harley-Davidson Myrtle Beach, South Carolina Patriot Harley-Davidson Fairfax, Virginia Bayside Harley-Davidson Portsmouth, Virginia Southside Harley-Davidson Virginia Beach, Virginia Hampton Roads Harley-Davidson Yorktown, Virginia WEST REGION Chester’s Harley-Davidson Mesa, Arizona Buddy Stubbs Arizona Harley-Davidson Phoenix, Arizona Harley-Davidson of Fresno Fresno, California Harley-Davidson of Glendale Glendale, California Orange County Harley-Davidson Irvine, California Simi Valley Harley-Davidson Moorpark, California San Diego Harley-Davidson Company San Diego, California Biggs Harley-Davidson San Marcos, California Iron Steed Harley-Davidson Vacaville, California Victor Valley Harley-Davidson Victorville, California McGuire Harley-Davidson Walnut Creek, California Henderson Harley-Davidson Henderson, Nevada Paradise Harley-Davidson Tigard, Oregon Sound Harley-Davidson Marysville, Washington LONGEVITY RECIPIENTS FOR 2012 50 YEAR Adamec Harley-Davidson of Orange Park Orange Park, Florida Hall’s Harley-Davidson Springfield, Illinois Kersting’s Harley-Davidson Winamac, Indiana City Cycle Sales Harley-Davidson Junction City, Kansas Harley-Davidson Sales & Service Napoleon, Ohio Harv’s Harley-Davidson Macedon, New York 25 YEAR Heritage Harley-Davidson Lisle, Illinois Harley-Davidson of Baltimore Baltimore, Maryland Harley-Davidson of Washington, DC Fort Washington, Maryland Harley-Davidson of Jackson Jackson, Mississippi Frontier Harley-Davidson Lincoln, Nebraska Barb’s Harley-Davidson W. Collingswood Heights, New Jersey C & A Harley-Davidson Plain City, Ohio Mid-Ohio Harley-Davidson Springfield, Ohio DuBois Harley-Davidson DuBois, Pennsylvania East Coast Harley-Davidson Dumfries, Virginia For more information visit www.Dealernews.com/readerservice magenta yellow cyan black ES48361_dn0512_007_FP.pgs 04.05.2012 13:47 ADVANSTAR_PDF/X-1a 5 Q U E S T I O N S — A R L E N E B AT T I S H I L L T hree years ago, Arlene Battishill and Desiree Estrada started GoGo Gear, a company that specializes in chic riding gear for men and women. In late March the partners were thrown into a shark tank — a television version of one, anyway. The duo appeared on ABC’s reality television show “Shark Tank,” where inventors and entrepreneurs vie to win the financial backing of the Sharks, a panel of high-profile business investors like billionaire Mark Cuban, real estate professional Barbara Corcoran, and FUBU founder Daymond John. For the full story, visit www.dealernews.com/Battishill. DEALERNEWS: What made you apply for “Shark Tank”? ARLENE BATTISHILL: One of the reasons we wanted to go on Shark Tank is because 6 million people were going to see our product. We’re going to get significant penetration with that type of exposure. A friend of ours emailed us and said she had seen an advertisement that they were having auditions for the show. That was probably in June of last year. “Our website traffic is up 1,000 percent from before the show aired.” — Arlene Battishill 8 DEALERNEWS.COM It seemed pretty brutal, what with Mark Cuban calling you both “cockroaches” and all. Was the entire process pretty difficult? AB: I think both Desiree and I said, “Whoa.” We didn’t have a real reaction, though, because we knew he was being overdramatic in that moment. We knew this was television, and that the pitching experience was going to be exaggerated. [Cuban] also called us stupid and said that we didn’t know how to run a business, but you didn’t see that on TV. There were some other things said to us during the taping that were designed to get reactions out of us — some of which caused one of the producers to run up to us after the taping and say, “We are NOT going to air that!” This is reality TV, and we knew that going in. The sharks always have to win, even if you get a deal. They are the stars, the entrepreneurs are the “props.” They asked about our profit margins, they asked us about patents, every last thing about our business, and we had answers to all of it that M AY 2 0 1 2 they had no problem with, but you didn’t see any of that on television, either. Another thing that you didn’t see was Robert [Herjavec] wanted to try on a jacket. He is a motorcycle rider. He said, “I’ve been in a motorcycle accident before, and you’re telling me this is a motorcycle jacket and everything you’re describing is inside this jacket?” And I said “Yes, let me show you.” I brought over a ladies’ jacket in a size 4, and I’m starting to explain to him what’s in it, and the next thing you know, he’s trying it on. So some of the good stuff that would have been great for our product never saw the light of day. It’s interesting to have a completely different experience in a taping from what you saw on television — where they make you look like a total airhead. The sharks were making it seem like we had just pissed away $400,000. But in reality, we spent $150,000 manufacturing product, we spent $150,000 in sales and marketing, $15,000 in intellectual property, $25,000 for product development and overseas travel, and $60,000 for two years’ worth of business operations like phone/fax lines, cellphones, merchant account fees, etc. They made it sound like we didn’t know how to manage our business or manage our money. You were able to broker a deal with Daymond John. Can you tell us more about that? AB: The only thing I can say is that we are finalizing the details. We went into the show knowing that we had to impress him. He was the fashion guy, and he rides a motorcycle. We knew right away we had to get him, and we knew he was going to understand out product from day one. Afterward, we sent him all of our financials, our business plan, strategies, and we all started working on what would be the best strategy and how Daymond can help us with that. What’s happened now that your segment has aired? AB: We had actually been working with [Daymond] since last August, when we taped. And within two weeks of the taping, he called us. He is amazing, he brings so much to the table. This is a guy whose clothing business has generated $6 billion. What we’re doing right now is not so much the deal we’ve done with him, [but] what the best strategy is for our business. Our go-forward plan is to see what we’ve got, and we’re going to go from there. We’ve been in a holding pattern for a number of months now. We didn’t want to make any major business decisions because we didn’t know what was going to happen once our episode aired. Right after the show aired, did you and GoGo Gear get immediate attention? AB: We have been contacted by other prospective investors — a very big distributor of helmets in Spain who is introducing an electric scooter to the U.S. market and has distribution all over Europe. And there’s a continuous flow of emails from legitimate people, and it’s only been 72 hours since the show aired! We’ve gotten a continuous flow of emails from people about distributing the product, too. And we’ve definitely had sales — absolutely. Our website traffic is up 1,000 percent from before the show aired. We’ve even been contacted by a couple of television producers asking if we were interested in having a reality TV show developed around Desiree and I! I think I’ve had my fill of reality TV for a while, but it sure is flattering. HIRE A TRUE PROFESSIONAL } Focused {Responsive } On-Time About {Cares Customers } Strong Performer {Team Player } Skilled Hire a motorcycle technician with hands-on experience and the right business skills. If you want a true professional motorcycle technician, look to MMI. Every MMI graduate receives industry-aligned training that includes business and customer service skills. They’re qualified, dependable and ready to learn the way you do business. MMItech.edu/Employers 866-960-8509 For more information about our graduation rates, the median debt of students who completed the program, and other important information, please visit our website at www.uti.edu/disclosure. For more information visit www.Dealernews.com/readerservice FROM THE EDITOR Dennis Johnson Go... go... go! ROAD, TRACK OR TRAIL, motorcycle riding is all movement. Whether it’s crosstown, cross-country or cross-continent, two wheels are locomotion. I know that four wheels will get you there too, but for me, motorcycles come with a built-in need to go, go, go. Leave a car parked and it just sits there. A motorcycle not in motion just falls over, save for the kickstand. There’s something about packing up a bike with what you need for the night or the week that seems to fit the very purpose of the machine. Get on and go. It seems that nowhere is this more relevant than the touring segment. This month we highlight the booming adventure side of that market — the growing segment of motorcycles and aftermarket products that’s all but swallowed up what’s historically been known as dual-sport. It’s been too long since I’ve been on a true adventure ride. In fact it was back in 2009 that I did three days in the Colorado Rockies aboard a KLR650 with the FirstGear crew and a bunch of Tucker Rocky reps. We were testing out what at the time was the new TPG line of gear. (It worked, thank goodness.) Whether through divine planning or happenstance of the weather, the Great Rocky Mountains’ microclimate threw at us everything from sleet to sun as we crisscrossed the Continental Divide. In fact, former FirstGear guru Mark Kincart — currently Klim’s gear guy — marks the ride as one of his better industry jaunts. Mine, too. Check out the whole story here www. dealernews.com/TPG. But that seems like a world away from where we are today, with the ADV market awash in new units from just about every OEM, and the aftermarket producing the kind of PG&A that would appeal to the rider who pictures himself astride his GS on a barren desert bluff — or commuting into the office among the gridlock. Apparel, luggage, accessories — all of it is function-first for riders who really ride. In talking with aftermarket players such as Twisted Throttle and Touratech USA, we learned that the rise of the ADV segment has directly fueled business growth, and there’s no reason dealers shouldn’t jump into this growing trend to both service their For more information visit www.Dealernews.com/readerservice 10 DEALERNEWS.COM M AY 2 0 1 2 customers and help bump the bottom line. The proof is in the numbers — the MIC’s 2011 Retail Sales Report shows that dualsport bikes saw a 14.2 percent climb last year — that this is a segment worth paying attention to. Elsewhere in this issue you’ll see a report from senior editor Arlo Redwine on how the year’s early thaw has jumpstarted spring sales and whether this is an indicator of good things to come. It’s still too early to know if this means additional sales and a rise in consumer confidence, or just early sales. Surely the mild winter put a crimp on snowmobile sales, but some dealers were able to capitalize on the warmer-than-usual weather by increasing motorcycle sales. In fact, Bob Weaver says that two-wheeled sales for his Top 100 dealership near Buffalo, N.Y., jumped threefold in February compared to 2011. Tim Sherman, owner of Signature HarleyDavidson, a Top 100 dealer in northwest Ohio, says he’s seeing a overall difference in the attitudes of his customers; something he noticed last fall for the first time in three years. He even reverted to summer hours a month earlier than normal because people are actually spending money. Good news for now, whatever the cause. We also report on the next chapter of Motus Motorcycles, which includes talking to a handful of its authorized dealers and why they think a $30,000-plus, hand-built, American-made sport-touring motorcycle has a chance in this market. Each one we talked to says they’ve had strong consumer interest in the bikes, with many saying they’ll have no problem selling them to customers interested in niche products. I see all of these pieces as parts of a bigger picture, and that is that the health of the U.S. powersports market looks pretty good from where I’m sitting. And I’m not prone to optimism. We’re not in great shape, but we’re a far cry better than we were three or so years ago. So let’s keep on keeping on. Dennis Johnson Editor in Chief [email protected] S H O P TA L K What you’re saying… ’Hangtag’ class action suit gets new trial in California “MEDRAZO CLAIMED that the salesman did not disclose $2,284 in dealer charges that would be added to the $8,700 price of the motorcycle until he produced the sales contract.” The customer had the option to say “no” — she chose to buy after the fees were disclosed, probably so she could be the hero for her boyfriend and play the role. Appears to me they had a bad break-up and she is trying to weasel out of the contract. Another reason to not facilitate “straw purchases.” Next thing you know, the courts will make dealers disclose the cost of their products, too. Ridiculous! — Cycle Lend, Kemp, Texas ALL THAT HAD to happen was that the customer needed to take the initiative to say no and question anything about the purchase she didn’t like or understand before she signed the document and took possesion. I quess it is just expecting too much for a person to be accountable... — Scooterbob, Crystal Lake, Ill. MY SHOP IS VERY close to North Hollywood Honda, and we buy parts there all the time. They are good folks, and I don’t think they were trying to scam anyone. Very sad. — NoHo Mike, North Hollywood, Calif. So Cal couple takes motorcycle service on the road WE’VE BEEN DOING this since 2007 but for the offroad market. It has been a struggle as many of the larger distributors refuse to sell to you unless you have an actual brick-andmortar store. My business started in a small trailer and has grown to a 24-ft vending trailer. It’s a shame that the distributors hold on to the old business models. — CrazyTed’s Racing, Virginia Beach, Va. Visit us online at: dealernews.com Join the dealer community at: dealernews.com/shoptalk Become a Facebook fan: facebook.com/dealernewsfan Follow us on Twitter: twitter.com/dealernews Send us an e-mail: [email protected] For more information visit www.Dealernews.com/readerservice M AY 2 0 1 2 D E A L E R N E W S . C O M 11 February net income triples from one year ago USED INVENTORY STILL NOT BEING REPLACED FAST ENOUGH, OWNER SAYS BY JOE DELMONT EDITOR’S NOTE: The Dealer Lab project is a joint effort between Dealernews and PowerHouse Dealer Services, a consulting firm run by dealer Bill Shenk, detailing his efforts to return a dealership, Florida Motorsports in Punta Gorda, to profitability after purchasing it two years ago. The dealership has been renamed Destination Powersports. Financial information in this report is taken from the dealership’s Composite Report supplied by Shenk and is prepared as part of the dealership’s participation in the PowerHouse Dealer 20-Group. The Composite Report is produced from the store’s monthly financial report. In preparing these Dealer Lab reports, Dealernews reviews the dealership’s unaudited P&L statement, balance sheet and Composite Report. AFTER A SLOW START in January, things picked up in February at Destination Powersports in Punta Gorda, Fla. Net income nearly tripled year-over-year, climbing from $6,898 in February 2011 to $18,129 in February 2012, an increase of 163 percent. Net income for the year increased 33.4 percent over 2011, jumping to $37,237. Total revenues were also up slightly, moving from $344,159 to $390,876 this February, for a 13.6 percent YoY gain. At the same time, the cost of goods sold (COS) increased $37,057, or 15 percent, during the same period. Gross profit climbed more than $10,000, increasing from $97,527, to $107,187, while expenses climbed about $2,300, moving from $87,531 to $89,815. However, GP dropped slightly — 27.4 percent vs. 28.3 percent, as a percent of sales. Unit sales continued strong, with 44 units sold in February, including 14 used motorcycles. In February 2011, Destination Power- sports sold only 32 units, including 15 used motorcycles. This year marked an improvement in the sales of new units: 14 compared to eight last February. Sales of motorcycles continued strong in 2012, with new-unit sales running ahead of last year, 26 to 15, and used units outpacing last year 29 to 21. Total unit sales are ahead of last year 87 to 66. GROWTH FACTORS There were several reasons for the strong improved performance this February, compared to February 2012, including the month’s rider-friendly weather — which had a similar impact on dealerships across the country. Other factors included: Improved website. The dealer site is becoming more established and the dealership is spending less on getting good search position. More inventory. This provides increased opportunities for unit sales, as well as other CONTRIBUTION TO FEBRUARY PROFIT USED INVENTORY Meanwhile, Bill Shenk says there are still plenty of opportunities for growth in revenue and profit. “Our used inventory is not being ROLLING EARNINGS $10,000 $250,000 $8,000 $200,000 $6,000 sales across the dealership. (Read more about this below.) More brands. The addition of Polaris and Victory brands to the dealership provided more unit sales opportunities compared to last year. Stronger P&A. The dealership did a better job of selling P&A this year. Just one example: The average lines per invoice sold to floor customers was up from 1.89 to 2.04, which increased the average invoice from $54.80 to $61.76. This created $4,300 more gross profit on only eight more transactions, 550 last year vs. 558 this year. Better ratios. A stronger parts-to-service ratio reflected the better salesmanship, going from 97 percent of labor to 116 percent of labor sold. Month 12 Months $150,000 $8,691 $9,276 $4,000 $2,000 $100,000 $50,000 $1,440 0 0 –$1,278 –$50,000 –$2,000 Sales F&I PG&A SVC The Dealer Lab is a real-world service from 12 DEALERNEWS.COM M AY 2 0 1 2 Mar Apr May Jun July Aug Sept Oct Nov Dec Jan Feb Month-Over-Month Comparisons and YTD Totals: February 2012 SALES Units Sold (New & Used) Sales F&I (net) Parts Accessories Service Total Sales Total Cost of Sales Gross Profit % of Total Dollars % of Total Dollars Feb-12 44 286,805 11,784 24,244 37,761 30,282 390,876 283,689 107,187 EXPENSES Dealer Top Gun 73.4 3 6.2 9.7 7.7 100* 72.6 27.4 72 4 8 9 7 100* 72.0 28.0 Feb-11 32 243,728 12,323 24,173 31,899 32,036 344,159 246,632 97,527 Payroll Total Sales (5.25/4.0 Empl) 17,887 Total P&A (2.20/2.5 Empl) 8,452 Total Service (4.50/5.00 Empl)17,468 Flooring 6,440 6,631 4,190 13,794 13,108 1,845 89,815 0 757 19,129 19,129 YTD 2012 87 584,980 25,838 46,693 71,092 61,599 790,202 580,074 210,128 PVS DLR 6,724 297 537 817 708 9,083 6,668 2,415 74.0 3.3 5.9 9 7.8 100* 73.4 26.6 % of Dept Gross Profit Top Gun Feb-11 Dealer Jan-12 YTD 2011 YTD 2012 PVS DLR 32.3 37.9 57.7 11.6 28 42 54 11 16,182 6,472 17,907 2,840 34.0 36.7 56 6 16,917 7,934 16,435 5,065 39,340 14,202 32,792 5,194 34,804 16,386 33,903 11,505 400 188 390 132 32.5 38.2 55 10.8 6,973 3,843 12,667 12,167 1,814 83,815 0 12,761 10,223 37,386 25,365 3,015 180,278 13,604 8,033 26,461 25,275 3,659 173,630 0 –18 19,108 19,108 –997 27,916 27,916 739 37,237 37,237 % of Dept Gross Profit 6.2 3.9 12.9 12.2 1.7 83.8 0 7 1 14 10 3 79 5 6,380 5,029 18,832 12,360 1,529 87,531 0 4.6 4.6 6.5 5.2 19.3 12.7 1.6 89.8 % of Dept Gross Profit % of Total Dollars % of Total Dollars Additional Income Net Profit Net Profit + Misc Exp YTD 2011 66 602,594 24,819 45,207 67,328 59,941 799,889 590,698 209,191 Dealer % of Dept. Gross Profit Admin Payroll Advertising Administration Rent Co. insurance Total Expense Misc. Expense 70.8 3.6 7 9.3 9.3 100* 71.7 28.3 % of Total Dollars Jan-12 43 298,175 14,054 22,449 33,331 31,317 399,326 296,385 102,941 % of Dept Gross Profit % of Dept. Gross Profit Feb-12 Dealer 0 5 6 –3,098 6,898 6,898 –1 2 2 156 92 304 291 42 1,996 0 6.5 3.8 12.6 12 1.7 82.6 0 % of Total Dollars 8 428 428 0.1 4.7 4.7 Notes: Top Gun = The top performing dealerships in the PowerHouse training group. PVS = Per Vehicle Sold. We now include YTD comparisons for 2010 and 2011. Shenk began operating Punta Gorda dealership on March 1, 2009. * Totals equal 100 because of rounding ** Name was changed during February 2010 ownership change and corporate reorganization. replaced or grown fast enough to keep up with our growth opportunity, and this will cause us to miss sales opportunities if we can’t fix it soon,” he says. At the same time, the dealership is understaffed in its sales department, a situation that prevents the dealership from prospecting its of Manheim Specialty Auctions in Daytona, Fla. “We sold and bought at the auction in March,” Shenk says, “and we made money both ways there.” (Look for more about Shenk’s auction activities with Manheim in upcoming issues of Dealernews.) As mentioned earlier, unit inventory increased this February. This increased product availability is reflected — Bill Shenk in the store’s inventory numbers as well as its unit sales revenues and its flooring costs. In February, the dealership had 263 new and used units in inventory, worth $2.1 million. Last year, in February, there were 176 units in inventory with a value of $1.4 million. This increased inventory led to a tripling of flooring costs over February 2011; flooring jumped from $2,840 last year to $6,631 this year. YoY, flooring more than doubled, climb- “Increased inventory has provided more opportunities for unit sales, as well as other sales across the dealership.” customer database and working with its parts and service customers, two solid sources for acquiring more used product to put on the showroom floor. Shenk would also like to beef up the staffing in P&A. Finally, Shenk says that the store isn’t being as proactive in any department as it should be. “This situation is stunting our growth opportunities,” he adds. Recently, Shenk has been making more use ing from $5,194, last year to $11,505 this year. “Powersports is a customer-experiencedriven business,” says Shenk. “You can maintain [your numbers] for a short period of time without giving customers that little bit of extra care that’s so important, but I believe it will catch up with you in time. Whenever one improves, there tends to be a period of relaxation that slows down the journey from good to great. Right now, we are fighting that tendency.” Bill Shenk is owner and 20 Group moderator of PowerHouse Dealer services, a dealership 20 Group provider and consulting/training company. He has worked full time in the powersports industry since 1976. Shenk purchased his first dealership in 1987 and started PowerHouse in 2000. He purchased the Dealer Lab dealership to show the industry that even in these extreme times you can turn around a failing dealership by using the proper best practices. Anyone interested in joining a PHD 20 Group should contact Shenk at 877-PHD-0911 or Bill@ phdservices.com. Read past reports and post comments at: www.dealernews.com/dealerlab alern new M AY 2 0 1 2 magenta yellow cyan black ES49251_dn0512_013.pgs 04.12.2012 01:30 DEALERNEWS.COM 13 ADVANSTAR_PDF/X-1a MANAGEMENT “It’s a great place to ride to. We’re half a mile from the ocean on the main artery into Newport Beach, so we get about 100,000 cars a day that drive by the dealership.” — Michael Guerin 14 DEALERNEWS.COM M AY 2 0 1 2 LOCATION, LOCATION, LOCATION DUCATI/TRIUMPH NEWPORT BEACH IS A PERFECT MIX OF SITE, BRAND AND SERVICE by Bruce Steever • photography by Joe Bonnello IT WAS A PLAN THAT COULD NEVER WORK: Start with an expensive location that had seen previous dealerships collapse, combine that with a terrible economic climate, and then mix in a low-volume brand. But like a certain fictional team leader, Ducati/ Triumph Newport Beach president Michael Guerin loves it when a plan comes together. Guerin knew exactly what it would take to make his plan successful. He needed a strong brand, the right location and a strong staff that knew how to provide a truly premium customer experience. “It was all planned that way,” Guerin says. “When we opened this store in May 2009, we were in the heat of the recession. But if we could get the pieces to work, we were going to do it. Getting a Ducati franchise in here was key, as I really felt it was the brand to have in this market. It was the culmination of what we called the perfect storm: perfect location, great product, and obviously the best employees.” While it might be easy to look to Ducati/Triumph Newport Beach’s location as the source of Guerin’s success, he asserts that there is more to a great store than a great location. Of course, he is quick to point out that it doesn’t hurt. The dealership sits directly on Newport Boulevard, an arterial surface street that essentially connects affluent Newport Beach with the rest of central Orange County, Calif. It is close to the beach, close to major freeways, and sees plenty of passing traffic each day. “It’s a combination of things that makes it a good destination dealership,” Guerin says. “It’s a great place to ride to. We’re half a mile from the ocean on the main artery into Newport Beach, so we get about 100,000 cars a day that drive by the dealership. “When you have a location like this, you can spend a lot less on marketing. You may pay more in rent, but that is your marketing expense. It’s the right area, there’s no doubt,” he says. There’s also something to be said for having the right brand for your market. Newport Beach boasts some of the highest property values in the country, and many areas around Orange County aren’t far off. Ducati’s premium market position doesn’t deter many buyers in these areas, and Ducati has been on a tear over the last few years. Guerin wanted Ducati from the start, as he was both a fan of the brand and confident in its potential. “Ducati has been in my heart as a customer,” Guerin says. “But I also enjoy working with the manufacturer. Being a dealer right now is great. You don’t have aged inventory. Ducati gets the accessories right, they have the brand experience, Ducati is really on top of it. As a dealer you have to be on top of it as well; you’ve got to play your part and support the brand.” A more recent addition to the store was adding Triumph. Creating a mirror business name under the same roof, Triumph Newport Beach helped bring the dealership quick growth in the few short years since it’s opened its doors. The store maintains separate websites for each brand. “The Triumph franchise became available and I felt that if we were going to put another brand in here, it would be a good fit,” Guerin says. “I felt that Triumph was different enough that it wouldn’t compete with Ducati. It’s a complementary brand.” The results of both brands under the same roof has been surprising, even to Guerin himself. “Triumph’s drawn a lot more traffic into the store. At the end of the day, this might have benefitted Ducati in the sense that this floor traffic might not always buy a Triumph. In 2009, it was challenging, no doubt about it, but it came around quickly. [The year] 2010 was great, 2011 was fantastic and the growth has been fantastic. It’s been a total ‘pinch me’ how it’s all worked out.” According to Guerin, a huge part of the success of Ducati Newport Beach has been the focus on creating a premium customer experience, along with building a staff that can consistently provide it. The first thing you notice when you walk into the dealership is that it doesn’t look like other powersports retailers. It’s a cross between a contemporary museum and a race paddock. The motorcycles M AY 2 0 1 2 D E A L E R N E W S . C O M 15 MANAGEMENT are placed in the showroom as art; people can walk around them and enjoy them. First-time customers are often a bit taken aback. “Sometimes it’s a bit overwhelming,” Guerin says. “Many customers have never seen so much European product in one location. It’s fun to watch people’s faces as they walk in the door. But that’s what we want — it’s for the people that want to come in and experience these products, and touch and feel them.” From that first glimpse, Guerin’s staff strives to escort the customer through every aspect of their visit to the store. “I’m here every day as an owner, and I know what I expect as a consumer,” he says. “Customers want, from the moment they walk in the door, the whole experience. Everything in this store is based on the in-store experience. People need to be greeted immediately, and they need to be taken care of the entire time they are here in the store. That’s really the key to it — to engage the customer from the moment they walk in the door.” The sales process at Ducati Newport is built around the same focus one learns in journalism: show, don’t tell. The key is finding out what customers want rather than simply telling them what they need. Sales techniques are still there, but the pressure of the hard sell is eliminated. With the open-floor layout, the lack of pressure, and a sales staff specializing in European machinery, the overall atmosphere is more akin to an Apple store than a motorcycle shop. “We’re going to make it a pleasurable experience, whether it’s buying a bike, buying a jacket, buying an accessory or getting service. It’s having the right people. Everyone we have has the right Ducati/Triumph Newport Beach’s design layout gives each brand its own identity in a space that’s been described as a cross between a contemporary art museum and a race paddock. The open floorplan gives a feeling of being immersed in the two European marques. 16 DEALERNEWS.COM M AY 2 0 1 2 NEW DISTRIBUTOR, NEW MODELS, NEW COLORS BETTER SERVICES, BETTER SUPPORT, BETTER PRICING SAME GREAT QUALITY TO JOIN OUR DEALER NETWORK CALL 951.361.9000 OR VISIT ALLIANCEPOWERSPORTS.COM For more information visit www.Dealernews.com/readerservice MANAGEMENT The store’s PG&A areas are integrated with the vehicle sales floor so, “customers don’t feel abandoned once they return after their bike purchase, bringing the sales experience …full circle.” attitude, the premium-experience attitude,” Guerin says. “It means they take the time; that you’re not a number. They develop relationships. The people that buy motorcycles here and get service done here become part of the family. We try to get to know who they are, and let them know who we are.” The technical service side of Ducati Newport is just as important to the health of the dealership. Guerin’s background includes 35 years in the auto industry with a focus on service. Building an industry-leading service department was always part of the plan. “It’s the convenience, level of training of technicians and followup,” Guerin says. “Pick-up and delivery has made a big difference. We have two master-certified Desmo techs for Ducati, and we do inspections on every bike. We try to exceed the expectations of what people with the product have been used to in the past, including myself. I was a Ducati consumer, so when we built this store, we based it upon our experiences elsewhere.” (Product was good, he says, but the service was lacking.) The parts department also is expected to deliver a premium experience. Stocking levels are aggressively monitored and maintained, especially with OEM accessories, a strong point for both brands. Accessories decorate every single demo bike in the fleet, giving customers the chance to touch and use the parts in action. Dedicated apparel specialists are on hand. The end result of this extreme focus on creating that elusive 18 DEALERNEWS.COM M AY 2 0 1 2 premium experience is an audience that returns positive results. Ducati Newport’s online reviews and reputation are nearly all five-star, community events see great attendance, and the store’s branding continues to grow. Most of the attention comes from word of mouth compared to more digital channels. “People become a part of the family here,” Guerin says. “Even if they didn’t buy their first bike here, after experiencing our service, they’re going to buy their next bike here. Give them the right experience once they’re in the shop, and they’re going to be a multiple bike purchaser. Customers have had the opportunity to watch us grow, and I think they really appreciated that, it made them feel like they were a part of it. We have a really strong customer base that has watched this place develop, and they’ve liked what they’ve seen. I think that’s part of our success. We’ve invited people to be a part of it.” Having been in business only three years, Ducati Newport has already earned its place as the No. 1 Ducati dealer in the U.S. Of course, like any good leader, Guerin doesn’t plan on resting on his laurels. “Nobody’s really content with where we are,” Guerin says. “We are always trying to make it better. Everyone else was retracting, and we kept pushing forward. I’d love to tell you I knew what the hell I was doing, that it all went perfectly according to plan, but some of this, you’re going by the seat of your pants as best you can, according to the vision you though it would be. This was the right time, and we’ve never looked back.” For more information visit www.Dealernews.com/readerservice MANAGEMENT 2012 DEALER OF THE YEAR DUCATI / TRIUMPH NEWPORT BEACH 1601 Newport Blvd., Costa Mesa, CA 92627 Phone: 949-706-1616 • E-mail: mike@ducatinewportbeach Website: www.ducatinewportbeach.com and www.triumphnewportbeach.com Owners: Michael and Judy Guerin General Manager: Mark McKinsey Number of Employees: 14 Years in Business: 3 Years at Location: 3 Store Size (sq. ft.): 8,400 of building, 20,000 of parking Annual Revenues: $7.6 million Total number of new units sold: 305 Total number of used units sold: 93 DMS: Lightspeed NXT Hours of Operation: Tuesday – Saturday: 9 a.m. to 6 p.m. Sunday: 11 a.m. to 4 p.m. 2011 Income by Department SALES DEPARTMENT Managers: Aaron Klink F&I manager: Chris Bryant Employees: 4 Showroom Size (sq. ft.): 5,900 OTHER Distributors Used: Parts Unlimited, Helmet House, REV’IT!, Sammy Tanner Dist., Motonation and Pitbull PARTS DEPARTMENT Manager: Heather Klink Employees: 3 Size (sq. ft.): 500 Club Sponsorship: Orange County Ducati Club Customer Demographics SERVICE DEPARTMENT Manager: 1 Technicians: 5 Lifts: 8 Size: (sq. ft.): 2,000 Shop Rate: $114 per hour Women: 10% Men: 90% Over 40: 55% 18-39: 45% Average age: 42 2010-11 Advertising Budget 11% Used Units 2011 Income by Brand 70% Internet 13% Service 19% Parts & Accessories 5% F&I 52% New Units 20 DEALERNEWS.COM M AY 2 0 1 2 10% Social Media 34% Triumph 15% Outside Events 5% Print 66% Ducati HJC HELMETS RAISING THE BAR At HJC, we’re committed to raising the bar through innovation, —BY DESIGN quality and technology. And that commitment extends from our highest value products to our premium helmets. Our design found in our helmets to quality backed by 40 years of experience, center incorporates cutting-edge technologies, from our full- HJC is committed to raising the bar in helmet design. sized wind tunnel for live aerodynamic testing to industry-leading NUMBER ONE IN THE WORLD — BY DESIGN rapid prototyping capabilities. Our factories now include a whole The full HJC line is available from the following exclusive distributors. new process that improves the quality and detail of our helmet graphics, and equipment that allows us to build helmet shells that set new standards for lightness. From the innovative features 1.800.242.8100 castlesales.com 1.800.421.7247 helmethouse.com 1.800.343.5984 sullivansinc.com HJCHELMETS.COM Get the free mobile app for your smartphone at http://gettag.mobi and view the HJC YouTube Channel. For more information please visit www.hjchelmets.com. HJC Helmets ©2012 For more information visit www.Dealernews.com/readerservice MANAGEMENT How to get out of your own way INDY’S KEYNOTE SPEAKER ON THE INCESTUOUS NATURE OF THE INDUSTRY, AND WHAT DEALERS CAN DO TO STOP FEELING LIKE ECONOMIC VICTIMS by Holly Wagner EVER SAT IN AN Apple retail store for a couple of hours to watch the customers? How about the Macy’s cosmetics department to find out how women react in a retail setting? These aren’t the first ideas that spring to most dealers’ minds when they think about how to increase sales. Yet Kevin Freiberg, who exhorted dealers to “Innovate or Perish” in his Feb. 17 keynote address at the 2012 Dealer Expo and American V-Twin Dealer Show, wants even the most successful dealers to think outside the box, and look at other retail markets for unconventional cues to improve service and sales. A month after the show, we contacted Freiberg, a mainstream business motivation speaker who has led presentations in front of everyone from Fortune 100 conglomerates to, for the first time, an assembled community of powersports dealers this past February. We were curious to understand his impressions of the industry, and what he would advise dealers now that he’s more acquainted with the market. It seems he believes powersports is a little too self-contained — and that’s a trait that might scare away more new customers than it attracts. “Sometimes an industry can be incestuous. ‘If it is not invented here, if it did not come out of our industry, it ain’t s**t,’” he says. Powersports “is an incredible industry, with huge potential, that has a ways to go in living up to that potential,” he says. “You’ve got to get smarter, get better, get faster, and be more willing to get out of the traditional comfort zones.” 22 DEALERNEWS.COM M AY 2 0 1 2 It sounds obvious to tell dealers that they need to focus on what they can offer customers to keep them coming back. But what Freiberg is talking about is adopting new approaches that will keep existing clients happy, while turning casual visitors into long-term customers. One of the best ways to generate fresh ideas is to get out of your own store. “Where do new ideas about how to run your business or deal with your suppliers come from? They don’t come from dealing with the same people, looking at the same computer, day after day,” he says. So observe the businesses that are serving the customers you want to have. “Go study every retailer outside of your space that is hitting it out of the park. You don’t think the Apple store has anything to teach you about how to run your business? Go sit in the corner with your iPad, or whatever you use, and watch,” Freiberg says. “If I were these dealers, I would go to places enthusiasts hang out — outside the industry.” SOCIAL MEDIA BUILDS RELATIONSHIPS Many dealerships already build their businesses around community — offering rides, bike nights and events that keep people tied to the store. Now they must figure out how to build that community with online tools (like social media) and keep it linked to the physical community that attends events. “You don’t think the Apple store has anything to teach you about how to run your business? Go sit in the corner with your iPad, or whatever you use, and watch.” “It’s getting out of the ‘either/or’ mentality,” Freiberg says. “[Dealers] may say that technology or social media is ‘not for me because I am not selling online.’ Or maybe they are, but the major play is still getting people in the door.” Forsaking one for the other leaves opportunities for competitors, including e-tailers, to move in. Another piece of advice is to stop acting like a victim. “You are a victim of price competition, but you get to choose whether you are going to be victimized,” he says. “Why not use that social media to reach me? It’s not about a one-off helmet. It’s about building a relationship with me. Compel me not to go to that online channel.” Any business that builds its clientele around enthusiastic participants may have something to teach powersports dealers. Freiberg uses himself as an example. A few years ago he learned to ride a motorcycle. When he was ready to buy a bike, his wife counseled him to rent for a while instead. After a year, he decided he wasn’t comfortable riding with his wife or child on the back, so he gave up motorcycling in favor of activities he felt were more family-friendly. “If I’d have had somebody with sales staff trained to say, ‘We just want to get to know you. What brought you in, and what did you want to accomplish?’ that could have been a powerfully different experience,” he says. The overarching message is to constantly evolve, try new things and take chances. Be willing to look critically at your own business. “In life and certainly in business, the really successful are the people who are willing to face the brutal facts of reality,” Freiberg says. “The dealers that are going to be around 10 years from now are the ones who will say, ‘We really do a good job in these 20 areas, but in these five, we suck.’” p r e m i e r s t y l e The NEW FX-19 offroad helmet from AFX offers state-of-the-art construction at an affordable price. It is DOT and ECE-22.05 certified — and features an aerodynamic design with a removable, brushed nylon liner; a removable, screw-on visor; ample ear cavity space for speakers; and 13 points of ventilation. The FX-19 is available in a variety of colors and graphics to complement any personality. Get in touch with your Parts Unlimited rep. to learn more about helmets from AFX. FX-19 THE FIRST NAME IN HELMETS afxhelmets.com For more information visit www.Dealernews.com/readerservice parts-unlimited.com M AY 2 0 1 2 D E A L E R N E W S . C O M 23 advertorial /Eh^dZzd DĂƌϮϬϭϮ DĂƌϮϬϭϭ tŚĂƚƚLJƉĞŽĨƵŶŝƚƐĂƌĞƐĞůůŝŶŐďĞƚƚĞƌŽƌ ƉŽƐƐŝďůLJǁŽƌƐĞƚŚŝƐLJĞĂƌǀĞƌƐƵƐůĂƐƚLJĞĂƌ dŚŝƐ ĐŚĂƌƚƐƐŚŽǁƐƐŚŝĨƚƐŝŶŵĂƌŬĞƚƐŚĂƌĞĞĂƌŶĞĚďLJ ƚŚĞƐŝdžŵĂũŽƌƐĞŐŵĞŶƚƐŽĨWŽǁĞƌƐƉŽƌƚƐƵŶŝƚ ƐĂůĞƐŚĂŶŐĞŝŶƐŚĂƌĞŝƐĞdžƉƌĞƐƐĞĚĂƐĂŐĂŝŶ ŽƌůŽƐƐǁŚĞŶĐŽŵƉĂƌĞĚƚŽƵŶŝƚƐĂůĞƐŝŶƚŚĞ ƐĂŵĞŵŽŶƚŚŽĨƚŚĞƉƌĞǀŝŽƵƐLJĞĂƌ ^ĞŐŵĞŶƚ DĂƌϮϬϭϭ DĂƌϮϬϭϮ ŝĨĨ KŶZŽĂĚ ϰϳϬй ϰϮϲй ϰϯй ds ϮϮϭй Ϯϰϭй ϮϬй hds ϭϬϰй ϭϰϰй ϯဓй KĨĨZŽĂĚ ϭϬϰй ဒϱй ϭဓй ^ĐŽŽƚĞƌ ϱϱй ϱϳй Ϭϭй ƵĂů ϰϲй ϰϳй Ϭϭй DĂƌϮϬϭϮ DĂƌϮϬϭϭ tŚĂƚƚLJƉĞŽĨƵŶŝƚƐĂƌĞŐĞŶĞƌĂƚŝŶŐŵŽƌĞŽƌ ůĞƐƐĐĂƐŚƚŚĂŶůĂƐƚLJĞĂƌ dŚŝƐĐŚĂƌƚƐƐŚŽǁƐ ƐŚŝĨƚƐŝŶŵĂƌŬĞƚƐŚĂƌĞĞĂƌŶĞĚďLJƚŚĞƐŝdžŵĂũŽƌ ƐĞŐŵĞŶƚƐŽĨWŽǁĞƌƐƉŽƌƚƐƐĂůĞƐŵĞĂƐƵƌĞĚŝŶ ĚŽůůĂƌƐŚĂŶŐĞŝŶƐŚĂƌĞŝƐĞdžƉƌĞƐƐĞĚĂƐĂ ƉĞƌĐĞŶƚĂŐĞŐĂŝŶŽƌůŽƐƐǁŚĞŶĐŽŵƉĂƌĞĚƚŽ ĚŽůůĂƌƐĂůĞƐŝŶƚŚĞƉƌŝŽƌ ƐLJĞĂƌƐĂŵĞŵŽŶƚŚ KŶZŽĂĚ ^ĞŐŵĞŶƚ KŶZŽĂĚ DĂƌϮϬϭϭ ϲϭဓй DĂƌϮϬϭϮ ϱϳϯй ŝĨĨ ϰϲй ds ϭϯϯй ϭϳϲй ϰϰй hds ϭϰϳй ϭϱϱй Ϭဓй KĨĨZŽĂĚ ϱϮй ϰϭй ϭϭй ƵĂů ϯϭй ϯϲй Ϭϱй ^ĐŽŽƚĞƌ ϭဓй ϭဓй ϬϬй 5HSRUWVSURYLGHGE\$'3/LJKWVSHHG¶V'DWD6HUYLFHVWHDP$OOUHSRUWV DUHDVDPSOHRI1RUWK$PHULFDQGHDOHUVXVLQJWKH/LJKWVSHHG1;7'06 )RUIXUWKHULQIRUPDWLRQSOHDVHFRQWDFW'DYH-RKQVRQDW $OVRYLVLWDGSOLJKWVSHHGFRPIRUPRUHUHSRUWV ĂĚǀĞƌƚŽƌŝĂů ΞW>ŝŐŚƚƐƉĞĞĚ/ŶĐůůƌŝŐŚƚƐƌĞƐĞƌǀĞĚdŚĞW>ŝŐŚƚƐƉĞĞĚůŽŐŽŝƐĂƚƌĂĚĞŵĂƌŬŽĨW>ŝŐŚƚƐƉĞĞĚ/ŶĐdŚĞWůŽŐŽŝƐĂƌĞŐŝƐƚĞƌĞĚƚƌĂĚĞŵĂƌŬŽĨW/ŶĐ Turn Your Customers into Fans. Every customer contact is an opportunity to impress, don’t drop the ball. ADP Lightspeed helps make every customer interaction a success by personalizing customer service, projecting inventory to demand and automating customer follow-ups. 1.800.521.0309 | ADPLightspeed.com See how ADP Lightspeed helps increase your fans. For more information visit www.Dealernews.com/readerservice © ADP Lightspeed Inc. All rights reserved. The ADP Lightspeed logo is a trademark of ADP Lightspeed Inc. The ADP logo is a registered trademark of ADP, Inc. SALES Dealers jumpstart the 2012 motorcycle season WARMER-THAN-USUAL WEATHER HAS FOSTERED EARLIER-THAN-USUAL SALES. BUT WILL IT MATTER? by Arlo Redwine IT’S AN UNSEASONABLY WARM Saturday in mid-March. Scott Poupard, owner of Monroe Motorsports in Monroe, Mich., is rarely absent from his store, but today he’s attending his daughter’s dance competition. March is a slow month, anyway. Poupard’s cell phone rings. It’s an employee back at the store, which is being overrun with customers. “Are we having an open house that you didn’t tell us about?” the tense employee asks. “There’s so much traffic in here — are we giving something away for free?” Nope. People are just ready to ride. Indeed, dealers nationwide are reporting earlier-than-usual spikes in sales and service due to warmer-than-usual weather. Industry statistics support their claims. But are these sales additional, or just early? Does the recovering economy have anything to do with it? And what about dealers who sell snowmobiles? For them, the mild winter was at best a double-edged sword. 26 DEALERNEWS.COM M AY 2 0 1 2 Consider Bob Weaver Motorsports & Marine near Buffalo, N.Y., the nation’s “snow capital.” Owner Bob Weaver says he has more leftover snowmobiles than he’s had in 40 years because of light snowfall. But February motorcycle sales were up threefold compared to last year. “We brought out the bikes and the bike clothing a month to two months early,” Weaver says. “We have been nonstop busy. I could hire more salespeople, more parts people, more service people. I just can’t find the help.” Even Weaver’s sled sales were good until January, when people began to realize the white stuff wasn’t coming. Snowmobile sales nationwide through November were up year-over-year by about 25 percent, according to Minnesota-based research firm Power Products Marketing. So even with the brown winter, final sales numbers will be up slightly. Weaver believes that strong pre-season sales were due to last year’s heavy snowfall. Similarly, this season’s disappointment will We at Protective have changed our look, not our commitment to our customers. As a trusted F&I leader in the powersports industry, we are committed to driving profitability and best-in-class service. 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For more information visit www.Dealernews.com/readerservice SALES Top 100 Dealers (pictured above from left): Big St. Charles Motorsports, Bud’s Harley-Davidson, Downtown Harley-Davidson; previous page, clockwise from top left, Cruisin’ 66, Fun Bike Center, Adventure Harley-Davidson, Babbit’s, Cyclewise/Ducati Vermont organized ride, Bob Weaver Motorsports & Marine make next year difficult. “Nobody’s going to buy early,” he predicts. “They’re going to wait to see snow again.” Lack of snow also hampered sled-related repair orders and PG&A sales. Poupard says he has about $100,000 in leftover snow clothing. He had doubled his order after running out of inventory last January. Across the lake in Wisconsin, local media report that snowmobile registrations were down nearly 40 percent, mostly due to closed trails. HARLEY ON FIRE But back to the good news. Harley-Davidson dealers reported a 30 percent year-over-year increase in bike sales through mid-February in a dealer survey conducted by the financial firm Baird and cited by the Journal Sentinel. Warm weather contributed to a 46 percent surge in Harley sales in the Midwest, the newspaper noted. Tim Sherman, owner of Signature Harley-Davidson, a dealer in northwest Ohio, believes the rebounding economy is a factor. “We had a mild winter, but we started to notice the customers’ attitudes toward spending really improving last fall for the first time in three years,” he says. “And our holiday season followed right along.” Signature returned to summer hours and seven-day weeks March 1, one month earlier than normal. “The guy who used to buy an extra jacket even though he didn’t need it — he’s back,” Sherman claims. “And people are replacing the bikes they had to sell when things got dicey three years ago. We’re talking to customers who tell us that.” This increase in demand comes following a few years of falling OEM production numbers and a recent decline in repossessions. Because of this, used-motorcycle values increased roughly 4 percent in February, says Black Book’s Ricky Beggs, adding that used-sled values declined by about the same percentage. “There is usually an uptick this time of the year, but it started a little earlier this year and slightly stronger than the past couple of years,” he says. Of course, the people who bought bikes in February and March may be the same ones who would have bought in April. “Motorcycle sales are up significantly for the timing, but I don’t know if they’ll be significantly up for the whole season. It’s too early to tell,” warns Johnna Diedrich, GM of Gieson Motorsports in Rock Falls, Ill. But there’s also a major benefit simply to a spread-out motorcycle season, argues Joe Boise, owner of Cyclewise and Ducati Vermont in New Haven. “Sometimes in the spring we’re so backed up that you can’t get to everybody in sales or service,” he says. “So the early start will make it less demanding on the staff.” Scott Poupard of Monroe Motorsports believes some of his winter bike customers were would-be snowmobilers. “The bike traffic I think is extra,” he says. “The same guys also ride ATVs; they also do snowmobiling. They want to spend their money on something.” Joe Hengeveld, owner of Northland Motorsports in Flagstaff, Ariz., 28 DEALERNEWS.COM M AY 2 0 1 2 points out that a mild winter in his area still means temperatures in the 20s and 30s. So his store didn’t sell many streetbikes, but it did enjoy unusual dirtbike sales through early March because of light snow coverage. The Motorcycle Industry Council predicts new-motorcycle sales will decline modestly this year after flat sales last year. Perhaps less contentious is the idea that the mild winter will lead to more miles ridden. Several dealers report customers removing their bikes from winter storage, or requesting spring prepping, four to six weeks earlier than normal. Both Parts Unlimited and Tucker Rocky say that motorcycle-related sales exceeded their forecasts for January and February, with Tucker specifying a double-digit increase compared to last year. ADP Lightspeed’s ongoing “Same Store” survey of about 200 Harley-Davidson dealers and 1,000 metric dealers indicated that February revenue from parts, service and sales combined was up by about 12 and 13 percent, respectively, compared to the same month last year. WHAT ABOUT FOUR-WHEELERS? The ADP Lightspeed statistics for metric dealers take into account all vehicle types, so they likely would have been even better if ATVrelated sales had been removed from the mix. Or maybe not. Sales of four-wheel-drive ATVs may have bottomed out in November, according to Dave Crocker of Power Products Marketing. “At least for three months, large-bore ATVs have bested the prior-year months,” he says. “It will be interesting to see if that’s an ongoing trend, or if it just falls back down again.” Even overall ATV sales were up in December, Crocker adds, largely because of the reintroduction of kids’ quads after the lifting of the lead ban. He also predicts another strong year for side-by-sides, though not as strong as last year when the industry benefited from a parade of new models. Many of Poupard’s winter ATV and UTV sales in Michigan are tied to snow removal, so the mild weather hurt their numbers. “Right now if I went to my parts department, they probably have four dozen plows that are sitting there,” he says. His dealer friends relate similar stories. When sharing year-to-date trends, Tucker Rocky notes that sales of ATV-related items are down slightly compared to last year —poor snow plow sales offsetting the strong finish for ATV items at the end of 2011. Again, it’s the importance of timing. But as the motorcycle industry enters its traditional sales season, dealers are hoping that the great start of 2012 was about more than different timing — that a rebounding economy coupled with high gas prices (but not too high) will make for a great middle and end of 2012, as well. For more information visit www.Dealernews.com/readerservice SALES — TOURING MARKET PRODUCT OVERVIEW Over the river and through the woods ... to the office? A MULTITUDE OF NEW ADVENTURE BIKES SIGNALS A TREND AMONG THE OEMS, BUT IT’S THE AFTERMARKET THAT GIVES THE FULL PICTURE by Dennis Johnson IT SEEMS AS IF the Honda TransAlp’s North American debut in the 1980s was a little premature. The Golden Age of dual-sport motorcycling is upon us, and it is called adventure touring. If only Honda’s dualie had survived America’s fickle taste it could have thrived to exist in a broad range of models that includes everything from Kawasaki’s diehard KLR650 and Yamaha’s freshly christened Super Tenere to the grand-daddy of the segment, the BMW GS series. It’s a range that includes multiple displacements and various levels of tech, each suited to the particular wants of the rider. As a testament to just how popular the segment has grown, just about every OEM is producing a bike that fits in what is now called the adventure touring market, and that segment is growing. In 2011, the Motorcycle Industry Council’s Retail Sales Report shows that dual-sport bikes were up 14.2 percent for the 12 reporting brands. While numbers may paint a portion of the picture and an assortment of magazine reviews on ADV bikes (as goes the lingo) may point to a trend, it’s really the aftermarket that reflects what’s happening on the highways and byways and dirt roads of America. These are bikes that people really ride, and they want stuff on them. “The numbers are showing a huge surge in the growth of the adventure-touring and sport-touring markets. Dealers are seeing this, and now they’re actually seeing the OEMs addressing it by building more adventure bikes,” says Adam Redford, sales and marketing manager for Twisted Throttle, one of the bigger players in the segment. “The manufacturers are paying attention, and the dealers need to do the same.” Rising gas prices. Changing consumer taste. More commuters riding motorcycles. Whatever the case, more people are opting for bikes 30 DEALERNEWS.COM M AY 2 0 1 2 that can (or at least look like they can) get them to work during the week, hit some trails on the weekend or be loaded up for a long trip into the outback. “The way we look at it is, any time you get on your bike and go somewhere where you’ve never been or are exploring the back-country, that’s adventure touring,” Redford says. This is good news for Twisted Throttle, a manufacturer and distributor of parts and accessories that is celebrating its 10th anniversary by moving into a new 27,000 sq. ft. facility on six acres. This is growth that can be directly related to the rise of the adventure market, Redford notes. The company started by providing accessories for Suzuki’s stalwart V-Strom and now makes or distributes several different brands. The company’s goal is to be a one-stop shop for touring and/or adventure touring enthusiasts by offering a broad range of aftermarket products that gives dealers a good margin. “If you’re looking to make a bike more practical to get out there, we want to make sure you have what you need, whether it’s saddlebags, a tank bag or a top case,” Redford says. “When it comes to custom cruisers, every dealer in the world has something for those bikes. But, right now, the dealers are not able to service their customers at the adventure end of the market.” RIDERS HAVE ALWAYS BEEN TRAVELING While what is now called the adventure touring market might be relatively new, dual-sport bikes like the KLR650 have been around for years, as have the people who want to load them up and start blazing trails. Take a look at ADVRider.com, an online forum with a dirt-centric flavor — tales abound of transcontinental crossings and around-theworld trips. SALES — TOURING MARKET PRODUCT OVERVIEW Progressive Suspension’s David Zemla says that while the company always has operated in that space — one of its best-selling monoshocks is for the KLR — recent growth has drawn the company deeper into the market. But it’s not going full-throttle developing suspensions for the new breed of bikes; among its more recent products is an adjustable monoshock for the BMW F800 GS — a bike growing in popularity among ADV riders. Zemla says the bikes in this market tend to get really loaded up, which forces the machine to sit lower in the travel — the last configuration you want when you hit a bump while traveling a pass on the Continental Divide. The company also get requests for lowering kits for the bigger and taller motorcycles. Progressive Suspension markets to the masses by advertising in all of the BMW-specific magazines and some of the online ADV sites. It also participates with the RawHyde Adventures touring company and with MotoQuest Tours, partnerships that have led directly to product development based on real-world feedback, Zemla says. But it’s not just the wearable parts like suspension and tires that feature high on the rotation of the serious adventure rider, it’s also all about luggage capacity and comfort — the latter, especially. Nobody wants to feel a rear-end that’s seen the seated portion of a cold ride from Mexico to Canada. At Dealer Expo this year, Saddlemen introduced a new heated seat for the BMW GS, a product that the company’s director of sales and marketing, Ron Benfield, says has been greeted with enthusiasm by BMW dealers who predict strong sales. “I think the cool thing about this is we’re seeing a huge demand for these products,” Benfield says. “What’s happening is people are realizing that you can get one motorcycle to do a lot of things. You can get yourself a nice adventure bike and get in the wind, go out into the dirt, and then commute to work on it.” Benfield says Saddlemen is looking to fill all the needs of the growing adventure market, including those for riders who use the bikes for long-distance riding and those who do it to beat the blues of the everyday commute. ESCAPE THE DAILY ROUTINE Another big player in the ADV aftermarket segment is Touratech USA, the U.S. arm of its 20-year-old parent company located in Germany’s Black Forest. The company has a retail store in Seattle, but also offers dealer pricing on its lineup of specialty products. The store’s general manager, Paul Guillien, says the rise of the ADV market and the jump in new vehicle offerings from the OEMs validates the category that BMW pioneered years ago with its big GS bikes. It’s made people realize that they can get a motorcycle that is as practical as it is fun to ride, he says. He offers that most ADV bikes are quite simply “function-first” motorcycles. “I think they’ve got a real appeal. Just the aesthetics of the bikes: when you see the photos of these rugged motorcycles and you see them in these places where you don’t normally see big motorcycles,” Guillien says. “They realize they can pack up their gear and go out for weekend, a week a year. It’s totally liberating to know you can pack up your bike and head out on the road.” Touratech makes or carries all the parts and accessories to fully outfit a bike for the road, from hard bags and skid plates, to crash bars and navigation accessories. All of this designed for a customer base that includes riders who come from heavy off-road racing and riding to those won over by the earthy appeal of the category. “It’s kind of an escape from the daily routine,” Guillien says. “You can escape just by getting on these motorcycles.” More products geared for the road Can you see me now? Hi-Viz is the buzzword in motorcycle products these days, and Cycle Case has this new lineup of soft luggage available in black or the eye-catching high-visibility color at left. The line is one of the product offerings from Directline USA, a new wholesale distributor founded by industry veteran Joe Parr. fou The setup includes saddlebags, a tail bag Th and a tank bag. All are built from heavy-duty an Maxtura ballistic fabric and feature reflective M side logos for extra visibility. sid The saddlebags have heat-resistant shields Th underneath. Rain covers attached to the bag und and tail bag with quick-release buckles. The tank bag features a see-through top window built specifically for a GPS, a mobile device or a map. All three feature clip-on key holders. map Contact: Directline USA, 972-424-7900, Co www.directlineusa.com w M AY 2 0 1 2 D E A L E R N E W S . C O M 31 SALES — TOURING MARKET PRODUCT OVERVIEW Racks for the outback New from Black Dog Cycle Works are multifunction rear racks for the KTM 950/990 Adventure, Super Enduro and the BMW F800GS and F650GS twins. The racks are built from 1/4” aluminum, are hard-anodized black and feature large-holed tie-down points. Riders can mount Rotopax carriers for water and fuel containers or use Black Dog’s Winch Support Plate to attach a Warn Xt17 or RT15 electric winch. Contact: Black Dog Cycle Works, 208-263-0438, www.blackdogcw.com A modular tail bag system New from Twisted Throttle is the DrySpec D66 waterproof motorcycle dry bag modular packing system. The setup combines the D38 and D28 dry bags for 66 liters of storage, and allows for quick and easy mounting using Quick Connect straps and daisy-chain mounting straps. The D38 has a rigid core structure and is more like a topcase while the D28 features the roll-top design making for easy access without detaching the bag from the bike. The D66 system retails for $179.99. Contact: Twisted Throttle, 855-255-5550, www.twistedthrottle.com SUCCEED BY CHOICE Choose from over 1300 top quality aluminum accessories Modular Display System www.rizoma.com For more information visit www.Dealernews.com/readerservice 32 DEALERNEWS.COM M AY 2 0 1 2 FRONT: 25X8.00R12 / 26X9.00R12 27X9.00R12 / 26X9.00R14 REAR: 25X10.00R12 / 26X11.00R12 27X11.00R12 / 26X11.00R14 For more information visit www.Dealernews.com/readerservice SALES — TOURING MARKET PRODUCT OVERVIEW A better sprung Beemer BMW’s small-bore ADV superstar, the F800GS, gets Progressive Suspension love with the 465 Series monoshock featuring remote adjustable preload. The 46mm bore shock has been valved, sprung, tested and equipped with deflective disc damping, threaded body and five-position rebound adjuster. Contact: Progressive Suspension, 877-690-7411, www.progressivesuspension.com Saddlemen’s got your back(side) S Aggressive adventure touring riders are the target for Saddlemen’s A Adventure Track seat, which features a hybrid design combining the A ccompany’s Saddlegel and Gel Channel design, and an optional seating element. The package is designed to offer comfort and support, while e rreducing shock, vibration and pressure on the perineum. It is covered with a weatherproof microfiber cloth and a rubberized cover for the w pillion/cargo area. The saddle has fitments for most of the popular ADV p bikes from BMW, Ducati, Honda, Kawasaki, KTM, Suzuki, Triumph, and b Yamaha. Contact: Saddlemen, 800-397-7709, www.saddlemen.com No more mush for Kawi KLR650 Progressive Suspension now has a high-performance front suspension for rogressive Suspensio monotube fork cartridge kit. The kit reportedly Kawasaki’s KLR650 with its monotu OEM equipment and offers better handling and ride quality over the O includes gas-charged monotube dampers and custom-tuned ffork springs. includes The kit fits 2008 through current KLRs, replaces all internal parts and includ a lifetime warranty. Contact: Progressive Suspension, 877-690-7411, www.progressivesuspension.com Crankin’ communicator MOTORCYCLE COOLING VESTS & Accessories Use PROMO CODE “DN313” CONTACT US 1-888-823-2665 www.techniche-intl.com Don’t let the temperature outside ruin your ride ! For more information visit www.Dealernews.com/readerservice 34 DEALERNEWS.COM M AY 2 0 1 2 The Interphone F5 Bluetooth Communicator has an effective range that starts at 0.8 miles and, when daisy-chained together by up to six riders, stretches to 1.5 miles. The system also allows all six riders to talk to each other at once. The communications device carried by Twisted Throttle features an A2DP stereo that accommodates wireless music, GPS and telephone calls and is 100 percent waterproof. Other trick features include 700 hours of standby and 11 hours of talk time or music streaming, voice-activated head unit and a text-to-speech function that lets riders listen to text messages. The F5 retails for $299.99 for a single unit kit; $499.99 for a Twin Kit. Contact: Twisted Throttle, 855-255-5550, www.twistedthrottle.com DON’T GET LEFT BEHIND! The world of retail is incredibly challenging. Without proper training and product knowledge, you could fall behind the curve by those better prepared. Convenient, online, interactive product training for premium aftermarket brands is now available… and did we mention it is free? Forget the school of hard knocks, enroll in PowerSportsU today! LEARN... at PowerSportsU.com TM For more information visit www.Dealernews.com/readerservice SALES Rise of the American sportbike? MOTUS MOTORCYCLES LINES UP ITS ‘WELL OILED’ DEALER NETWORK WITH PREMIUM SPORT TOURING MOTORCYCLES by Dennis Johnson WHEN TIM AND NAN WOODSOME of Springfield, Mo.’s Cruisin’ 66 lost their Big Dog Motorcycles franchise, they started the search for a brand that not only fit the theme of their store, but also would complement their Victory lineup. It had to be a motorcycle line, because that’s the sole focus of these Top 100 dealers — from the vehicles and PG&A they carry to the atmosphere they try to foster. They wanted a sportbike line but weren’t interested in any OEM that operated in multiple vehicle segments. Not even Polaris’ roster of four-wheelers sounded interesting. They wanted something with a high-end Euro-flavored vibe. Enter Motus Motorcycles’ two new Americanmade sport touring models. “We’ve really looked at the big picture and saw that there was an opportunity for an American brand, something that’s a high-end quality product that might attract the person who wasn’t looking for a Victory, but also the person who wouldn’t look at a chopper,” says Tim Woodsome. “The Motus really has that element. You have the bags. You have the sport. It’s something that’s very timely. They’ve taken these wonderful components and put them together in a package that you can’t help but know would be fun.” The Woodsomes — along with seven other dealers — make up the initial list of authorized Motus dealers. The Birmingham, Ala.-based manufacturer announced its initial dealer network, MSRPs and standard and optional equipment in March during Daytona Bike Week. More are planned by fall. Motus now moves into the next chapter in its story. In 2009 founders Brian Case and Lee Conn announced they were developing a “revolutionary,” V4-powered sport touring motorcycle. The narrative played out in a series of YouTube videos documenting devel36 DEALERNEWS.COM M AY 2 0 1 2 opment of the company’s proprietary 1650cc, 165hp motor, a cross-country tour showing off early prototypes, and then a Daytona press event unveiling of the MST and MST-R. The first stores will begin receiving their first shipments of 2013 MSTs in the fall. The Woodsomes are anxious to get going. “We have a situation here where we have a high-end, somewhat expensive, exclusive motorcycle. The average young man who’s going to go out and get a Gixxer or R6 is not the customer,” Tim Woodsome says. “There’s something about [the Motus] that’s going to appeal to a lot of people who want to have that exclusive motorcycle. We’ve already been contacted by several people who want to be on the list.” Motus’ bikes present the opportunity to recapture some of the luster of an Americanmade sportbike lost since Harley-Davidson closed Buell. The most recent launch of motorcycles under the Erik Buell Racing marque now gives the market two homegrown options. Only a handful of moto-journalists previewed the prototype bikes that Case and Conn toured around the country, but the reviews came back rosy. After giving allowances for the inherent issues of reviewing a prototype, Cycle World’s Blake Conner reported in July 2011 that once the kinks are fixed it should be “one hell of a fun motorcycle.” Conner did note, however, that there were obstacles to overcome in establishing a new bike brand and new motorcycle, but added that given Motus’ by-design niche market and low production numbers, it has a chance. At Battley Cycles in Gaithersburg, Md., Motus is expected to be a natural fit. The store’s namesake owner, Devin Battley, is a lifetime racer who worked with Erik Buell from the beginning. He even owns the RR1000 with VIN No. 1 stamped on it. Battley didn’t know the owners of Motus, but “was very much interested in the American boutiquebuilt performance motorcycle,” says John Hardison, the store’s marketing coordinator. “He got in contact with them, and Lee Conn came up here with his prototype and let him ride it. Devin came back from the ride and said, ‘I want to sell this motorcycle.’” The 27-year-old dealership has always carried premium vehicle brands, and also focuses on higher end aftermarket gear brands. “Now here comes this bike out of Alabama that’s an American-made, handcrafted bike,” Hardison says. “They set out to make this fantastic sport touring motorcycle, and it fits in perfectly with what we’re trying to convey to the enthusiast who walks in here, which is, ride the best.” Launching such a unique new motorcycle brand and network carries risk, especially given the number of quirky marques that have come and gone from the market, says Tom Hicks, owner of Top 100 dealer Southern California Motorcycles in Brea, Calif. Hicks says he stays away from startups and is taking a wait-and-see approach with Motus. An industry veteran both as a retailer and as an OEM employee, Hicks says he knows the logistical nightmare that goes into manufacturing and testing a new bike and building an adequate dealer network — from parts supplies to warranty support. If none of it works out, it’s always the customer who loses out in the end, Hicks says. ‘LOW VOLUME, HIGH MARGIN’ The retail price of the MST and MST-R — $30,975 and $36,975 — definitely put the bikes in rarified company, but the sticker number isn’t that far out of line. And while the economic woes of the last few years have hurt sales, those bikes in the premium price range still had a steady stream of buyers. Motus’ Lee Conn says the prices accurately reflect the quality and value of an “heirloom quality” motorcycle. The company will be hand-building, in small production numbers, bikes aimed at a very specific buyer, he says, and will carry a two-year, limited warranty. Motus says it knew that its dealer network wouldn’t trend toward high-volume, big brand dealerships. The owners identified stores filled with diehard enthusiasts committed to selling a premium brand. “This is not a high-volume opportunity,” Conn says. “This is a low-volume, high-margin opportunity.” Conn says the company set out to make things easier on its dealer network by creating a motorcycle that is reportedly easy to service and building what he claims is a common-sense ordering, stocking and marketing program. “It’s a very simple opportunity where we tried to remove as many barriers as possible for dealers,” he says. Motus dealers will have to stock one of each of the models on their floor at any time, but won’t be required to dedicate any certain square footage to the brand or have any certain size or type of signage, Conn adds. Most of the charter dealers are on the east side of the U.S.; however, Conn says there will be a march westward, with California likely the brand’s biggest market. The company says it has lined up floorplan and consumer financing, but would not identify lenders to Dealernews. It also says that it is working to build a “highend” line of gear. At RPM Cycle in Farmers Branch, Texas, store manager Boris Loera says Motus will fit into the dealership’s all-European lineup. He adds that RPM Cycle should have no problem selling the pricey bikes, given they already sell many premium-priced motorcycles into the Dallas/Fort Worth market. RPM in early April had already presold one Motus, and Loera says they have a number of curious customers. “When Motus was doing its nationwide tour, we had about 10 days to prepare for them to be here … and we had 50 customers in here looking at the bike,” he says. “This is going to be a neat product. The fact that it’s American-made makes it that much better.” Visit www.dealernews.com/ Motus12 for more. For more information visit www.Dealernews.com/readerservice M AY 2 0 1 2 D E A L E R N E W S . C O M 37 SERVICE Make your parts area a ‘slave’ to profits OBSOLETE INVENTORY WILL SUCK THE LIFE OUT OF YOUR P&L. HERE’S HOW TO TIGHTEN THINGS UP by Holly Wagner KNOW YOUR Ds DISCOUNT IT. Discount obsolete items to market value and set up a sale area in the store to move them out the door. DONATE IT. Donate used clothing and accessories to charities and fundraisers. If you can’t send it back to the supplier and you are in the right tax situation, you can donate it and take 100 percent off your taxes. DUMPSTER IT. Some metals bring good prices from recyclers. If you can’t move an item by discount or as a donation, bite the bullet and throw it out. WITH AN ACCURATE PARTS INVENTORY, YOU CAN… … Track sales by employee to help improve their performance. … Move high-turn stock nearest the parts counter so you’re not chasing after high-demand items all the time. …Manage your inventory more closely with supplier programs. 38 DEALERNEWS.COM THE RECESSION HAS FORCED most dealers to take a hard look at how much they spend, review return on investment and determine how to run a cleaner, leaner operation. But some dealers may be overlooking their most promising profit center: the parts counter. Steve Jones of Gart Sutton & Associates wants you to knock it off. Specifically, he wants dealer principals and GMs to start empowering parts managers to take charge of their departments and turn them into the most profitable department in the dealership. That means implementing an Open-To-Buy system to make inventory management a slave to profits, he told an overflow crowd at Dealer Expo’s “Managing the PG&A Department” seminar. So what is an Open-To-Buy system? It’s a method for managing inventory in a tighter, smarter way that squeezes every dime out of the space and budget that a dealership allocates to parts. “Obsolete inventory will suck the life right out of your department and your dealership,” he said. Topperforming dealers have only 1.9 percent obsolete inventory, but that’s only one dimension of Open-ToBuy. The system also helps identify opportunities to hire and train the right people, give them ownership of their roles at the dealership and, most importantly, build a cushion that can see a dealership through lean times. SORTING IT OUT Essentially, Open-To-Buy is the difference between the amount of any type of inventory in stock, and the budget for that category of inventory. “It says, ‘I have set a number for this category, and I don’t have that much in inventory, so I have this much space to buy,” he explained. That helps parts managers make the most of supplier programs like preseason buying, return guarantees and incentive programs. It also forces them to constantly reevaluate what’s selling and, above all, make sure as little inventory as possible ever gets stale on the shelf. “It helps you select high-volume, high-turn inventory,” Jones said. “Cash flow is king.” You must understand your parts budget, where it goes and what’s moving. This helps set goals for the dealership as a whole and for each employee in M AY 2 0 1 2 the department — goals that can help with hiring, Steve Jones says parts managers should have the authority to do what it takes to make their departments profitable. training and management. “It gives every category a number that you want to manage to,” he said. First, inventory is sorted into geographical and categorical categories. Geographical inventory consists of items that are in a fixed location in the dealership, such as a display of tires or other large or heavy items that will always be in the same place, or a cabinet that keeps all the small parts together. Categorical is for inventory that may be moved around the store, like a display of jackets that may be moved based on the season. “If you haven’t gone through and re-categorized your inventory properly, you can’t track any of this stuff,” Jones said. “Clothing and accessories are two very different animals.” The two main parts of an Open-To-Buy system are sales projections and calculation of the inventory levels needed to meet those projections. For projections you need to know past sales, what inventory is in stock and how it has met past demand, and the dealership’s goals for the department. That means cycle-counting inventory, a rolling process of counting at least one bin (or a specific quantity of part numbers) per day, every day. Any employee can do the counting, or you can split the task among employees. It helps keep staff busy and engaged while keeping inventory accurate. The goal is to get complete and accurate inventory count at least six times a year. Parts managers should spot- check the counts by running a random 25-item report and checking those items. “There’s nothing worse than you promising something to the customer because the DMS says the part is in inventory and it isn’t there, or the guy who drives two hours from Podunk because you told him you have the part he needs and it isn’t there,” Jones said. Accurate inventory is good for more than just tracking stock. Parts managers can track sales by employee to help them do their jobs better. They can move high-turn stock nearest the parts counter to minimize chasing after high-demand items. And the information can be invaluable in an emergency: One dealer at the February seminar said his store had a fire that gobbled up $3 million in inventory. His count was so tight, the insurer paid 100 percent of his losses. Another benefit is managing inventory more closely to supplier programs. Look for good return terms, Jones counseled, to keep from getting stuck with unsalable merchandise. For those just starting an Open-To-Buy system, that advice may come late. “If inventory levels are high across the board, there is no easy solution,” he said. “Reduce the inventory as quickly as possible. Don’t tie up dollars where they are not needed.” How long do you hang on? What is considered a slow mover? “Six months with no sale. If it is not a seasonal part, I am going to take a really hard look at whether I want to keep it. I don’t want it to get to 12 months,” Jones said. At that point, it’s obsolete. “Run a monthly non-movers report; bimonthly is better. Seasonality should not impact the 12-month report,” Jones said. Then pull the obsolete items and “get rid of it. It won’t go up in value.” Start by using return or obsolescence programs that suppliers offer. After that, it’s time for the three Ds: • Discount it: Discount obsolete items to market value to get them out the door. “Customers want to know two things: what’s new and what’s on sale,” Jones said. Set up a sale area in the store to move it out. • Donate it: Donate used clothing and accessories to charities and fundraisers. If you can’t send it back to the supplier and you are in the right tax situation, you can donate it and take 100 percent off your taxes. “Take the writeoff and dump it,” Jones said. • Dumpster It: Some metals bring good prices from recyclers. But keep in mind that shelf space is worth more than dead inventory. If you can’t move an item by discount or as a donation, bite the bullet and throw it out. Some parts managers are creative about use of programs. One dealer at the seminar said his parts manager buys new discounted parts at liquidation sales, then returns them to suppliers who give 100 percent credit on new returns — a move Jones applauded. By managing inventory accurately and on budget, dealers can reach profit margins of 35 percent to 40 percent on PG&A. Compare that to the margins on new units, used units and service, and the value of Open-To-Buy becomes clear. “When unit sales are tight, PG&A and service should keep you profitable,” Jones said. “Get that overhead absorbed so at least you can keep the doors open and keep everyone employed.” For more information visit www.Dealernews.com/readerservice M AY 2 0 1 2 D E A L E R N E W S . C O M 39 SERVICE How to cover yourself in a legal case WANT TO LESSEN YOUR LEGAL RISK? THEN ‘DON’T GIVE IT AWAY’ FUEL FOR THOUGHT Dave Koshollek teaches sales and service classes for dealers. Contact him at dakoenter [email protected], or via editors@ dealernews.com. From Indy: There’s a lot more from Dave’s Indy seminar on reducing legal risk in the service department. To read the full version, visit www.dealernews. com/CYA. 40 DEALERNEWS.COM AT THIS YEAR’S Dealer Expo and American V-Twin Dealer Show, I presented a Service 101 seminar divided into three areas of discussion: Get It In: Best practices to attract and capture service work Get It Right: Best practices for achieving high service proficiency Don’t Give It Away: How to reduce risk and avoid expensive lawsuits. The well-received Don’t Give It Away section focused on the seven high-risk areas of dealership product liability. Before I get into this, however, there are a few general thoughts I want to share: 1) Morally, we should make customer safety our No. 1 priority. Motorcycles are supposed to deliver pleasure, not pain. 2) Collectively, dealership personnel should be aware that anyone in the store can be named in a product liability suit. 3) Product liability cases represent huge economic potential, with millions of dollars paid out annually in legal fees and settlements. Expect the plaintiff’s (injured party’s) legal team to work diligently to get every dollar they can from you. 4) In most states, it is inadmissible to use rider error, even if it relates to rider impairment, as evidence in a product liability case. The court will focus on your actions; making you prove your work was “free of defect and reasonably fit for use.” 5) There is no perfect way to keep from being sued, but you can reduce the financial impact by implementing better practices. What follows is derived from information gathered over the years from a variety of motorcycle industry professionals; some of whom are legal experts. These are excerpts from two of the seven high risk areas covered in my Dealer Expo seminar. I must state that I am not a lawyer. If you need legal help, get professional legal advice from an attorney who practices product liability/personal injury law. . VEHICLE SET-UP: FOLLOW THE OEM To ensure the vehicle is operating properly, perform the vehicle set-up according to the manufacturer’s Pre-Delivery & Inspection (PDI) manual that includes detailed vehicle assembly, adjustment and inspection procedures. After completion, test-ride the vehicle for several miles to verify it performs “as a proper representation of the product.” It’s also a good practice to note the test miles and the route taken. Know that in a product liability case, the plaintiff’s legal team will inspect the wrecked vehicle, looking for anything that was not assembled or adjusted per the manufacturer’s set-up procedures. Non-factory modifications and improper set-up can swing the majority M AY 2 0 1 2 of the responsibility onto the dealership. Note, there is no good reason for a technician doing it “their way” when a manufacturer’s PDI manual is available. Most courts will presume the vehicle manufacturer knows the best set-up procedures, so follow the PDI manual to reduce your risk. If you believe the PDI manual is incorrect, contact the vehicle manufacturer to report it. The technician who performed the set-up should check or initial each procedure he or she performed and then sign the form. If the shop does end up in court, the tech will have to testify what he did, how he did it, and why. A properly completed PDI form can be helpful to your defense. DOCUMENTATION IS CRUCIAL In court, the written word is what lawyers take to the bank. If the dealership is sued, the plaintiff’s legal team will pull the service documents associated with the case. Visual inspection sheets, repair orders and technician notes are just some of the documentation that will be scrutinized. That’s why service documentation should be an accurate representation of all transactions. Visual Inspection sheet: Note the vehicle’s condition when received, such as mileage, tire pressure, fluid levels, leaks, wear, signs of abuse or accident and any cosmetic damages, just to name a few. Write “customer states,” in their words to describe an issue they reported. Repair order: Individually list every repair or service performed and the parts installed. If it’s a routine event such as a 5,000-mile service, then you should have a separate sheet identifying the actions and inspections of that routine service event. If it’s a repair, be specific as to what was performed; for example, “Replaced rear brake pads” is specific; “fixed brakes” is not. Note additional repairs needed, and have the owner sign/initial that he understands the risk and is taking responsibility for declining to have needed work done now. Make sure the individual who signs the R.O. is the vehicle’s legal owner. Technician notes: Notes on paper or in the computer can be subpoenaed for evidence. Be like Sgt. Joe Friday and write “just the facts.” Review notes from a devil’s advocate point of view. Could the court interpret what was written to have put the plaintiff at risk? If so, rewrite it before you file it. Keep in mind that altering the documents after a suit has been filed could get you in a lot more trouble. This has been a mile-high view of a very important aspect of doing business. If, for any reason you think you’re engaging in risky behavior, you should hire an attorney for a professional legal opinion. After all, you don’t want to give it away — after you worked so hard to get it. 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RK EXCEL America Inc., 2645 Vista Pacific Drive, Oceanside CA 92056 Tel: (760)732.3161 Fax: (760)732.3186 www.RKExcelAmerica.com 4pgRKKitVortex12.indd 2 1/10/2012 1:10:39 PM SAVE THE DATE FEBRUARY 15-17, 2Indiana0Convention 1 Center3 SERVICE — TOOLS AND SHOP EQUIPMENT Snap-on ratchets get into tight areas Snap-on Tools has released a 12-piece, 1/4-inch, 12-point drive fractional low profile ratchet and socket sets that are designed to get into tight areas. (Part No. 112RT.) Sets feature tools with thin, alloy steel handles, 72 gear teeth that require minimal movement, and easy-action reverse levers. Tools are nickel- and chrome-plated. Contact: Snap-on Tools, 877-762-7664, www.snapon/handtools. Lincoln Electric expands welding Protective gear Form Lincoln Electric comes more than a dozen additions to the company’s Welding Gear line. All items can be viewed in Lincoln Electric’s Welding Gear catalog, which can be obtained online (Bulletin E14.001), or by calling the telephone number listed below. Highlights from the product line include a split-leather welding apron, flameretardant welding lab coats and shirts, padded safety goggles and bifocal safety glasses. Contact: Lincoln Electric, 888-355-3213, www.lincolnelectric.com. Designed for Motorcycle Dealers. SG7 Seat & Guide Machine Lease the 777 package for about $50 per day! Profit from your own cylinder head machine shop with the 777 package – it’s all you need! THE CUTTING EDGE VR7 Valve Refacing Machine S7M Surfacing Machine D E A L E R N E W S . C O M M AY 2 0 1 2 1-800-452-0534 www.rottlermfg.com www.youtube.com/rottlermfg www.facebook.com/rottlermfg email: [email protected] For more information visit www.Dealernews.com/readerservice 42 8029 South 200th Street Kent, WA 98032 USA +1 253 872 7050 MARKETING Spreading Euro gospel LONGTIME SEATTLE-AREA DEALER LAUNCHES SHOW TO SPOTLIGHT EUROPEAN MOTORCYCLE, AFTERMARKET BRANDS by Dennis Johnson THAT THE PACIFIC NORTHWEST is a hotbed of European motorcycling is not lost on Jim Boltz, the man behind the Cycle Barn Motorsports Group north of Seattle. But the collective group of Euro motos have been under-represented at regional motorcycle shows, he says. For dealers like Boltz, whose group includes a Triumph/Vespa/Piaggio store, this means losing the opportunity to put such brands before a wide swath of the motorcycling community. Boltz and Garrett Johnson, the general manager at his Euro store, started brainstorming ways to broadcast their products — and the community of Euro-centric dealers — to the waiting public. What they came up with is Euro Moto 2012, an OEM and vendor showcase that launched in early March. The show featured a collection of seven dealers from the greater Seattle area representing Aprilia, BMW, Christini, Ducati, GasGas, Husaberg, Husqvarna, KTM, Moto Guzzi, MV Agusta, Piaggio, Triumph, Vespa and Ural. It also hosted more than 38 aftermarket “We wanted to create an excitement about the European motorcycle brands as a viable option in the market.” — Jim Boltz vendors, each one chosen because of its appeal to European bike enthusiasts. The seven dealers split the cost of holding the event — with the goal of simply breaking even. “We wanted to create an excitement about the European motorcycle brands as a viable option in the market,” says Boltz, who also is the longtime director of Washington state’s Motorsports Dealers Association. “We wanted to share the enthusiasm that these dealers generate because they live, eat and breathe their brands — much more than, say, the Japanese brands.” According to Boltz and Johnson, the show attracted more than 3,000 attendees to the Lynnwood Convention Center for a day of perusing Euro bikes, meeting fellow Euro-philes, checking out such vendors as Dainese, Rizoma, Schuberth and Sidi, and attending seminars covering topics like packing tips for long road trips, suspension and brakes, and taking better photos while on the road. Aprilia reportedly even used the show as the opportunity to unveil its new Tuono V4 R. “We are ecstatic about it. I think the show could have been called a success with half [the attendance] because of the quality of the attendee,” Johnson says. “These were Euro motorsport enthusiasts and people who were interested in becoming owners of the vehicles. It was a tight-knit group of people.” Since the show, some of the exhibiting dealers have reported a measurable, positive response from customers, Johnson says. And his own store has seen a bump in bike and PG&A sales, along with an increase in service customers. They even got a new employee out of the deal, he adds. ALL BY DESIGN Photos courtesy of Mototainment LLC In organizing Euro Moto, Johnson and Boltz set out to create an environment that would lead to sales. They required each aftermarket M AY 2 0 1 2 DEALERNEWS.COM 43 MARKETING “European brands are … some of the best options in motorcycling right now in the U.S. market.” — Garrett Johnson vendor to be represented by the brand itself or its distributor. The idea was to highlight a broad range of products from each of the brands — far more products than a dealer could stock — and then funnel the sales to the dealers in attendance. “We also provided space for vendors to fully accessorize vehicles from one of the dealerships and put them on display in the main hallways,” Johnson says. This gave attendees the chance to check out all the products away from a sales-type environment and then go find the vendor to get more information. The setup also gave the dealers real-time market intelligence on what products they might consider stocking. Knowing that most European bike enthusiasts are mega-mileage riders, Johnson launched an aggressive marketing campaign via TV, radio and social networks that stretched as far north as Vancouver, British Columbia, and south to Portland, Ore. He also reached out to like-minded local businesses such as coffee shops and restaurant 44 D E A L E R N E W S . C O M M AY 2 0 1 2 to post fliers. Each of the dealers that exhibited reached out to their customer bases through in-store advertising and through social media. They also contacted a few high-end European car dealerships — Mercedes of Lynnwood, University Audi, and Jaguar-Land Rover of Lynnwood — to provide a new C63 AMG, a G550 SUV, an Audi R8 and an XKR. The vehicles, all of them in white, were parked at the entrance of the convention center. Johnson says they wanted to create a thoroughly European feel at the show and the cars added to this element. “It got people pumped,” he adds. Boltz and Johnson then lined up Riders for Health as the show’s designated charity. They raised more than $3,500 for the organization through T-shirt sales and a raffle that included a grand prize of two tickets to the 2012 Laguna Seca MotoGP Day of Stars, two all-access passes to the race weekend, access to Dunlop Tires’ hospitality suite, a For more information visit www.Dealernews.com/readerservice new set of Dunlop tires, $1,000 in travel expenses and a five-night hotel stay. The prize was arranged by Mike Buckley and Brent Durfee from Dunlop. Plans are underway for Euro Moto 2013, when Boltz and Johnson want to double the exhibit space and add seminars. They’re also hoping to bring on a title sponsor to add some cache to the show and to help bump up the advertising budget. “European brands are no longer the niche brands that are hit or miss on whether you’re going to find support and availability,” Johnson says. “These are well-supported brands producing some of the, if not most of the, best options in motorcycling right now for the U.S. market.” For more information on Euro Moto, check out www.euromoto2012.com. MORE EURO? See our cover story on Ducati/Triumph Newport Beach starting on page 14. Did He REALLY Just Mention AngryCustomer | December 17, 2011 RE LINE AL ON REVIE W Whether they have a compliment or a complaint, the Internet gives people a place to be heard by hundreds of thousands of people . What ‘s being said about your dealership online? Take control of your online reputation with Powersports Marketing’s Online Reputation Management solution. They expressed an almost total lack of concern for my business and proved themselves to be either totally incompetent or complete shysters! Powersports Marketing gives dealers a solution to: Î Monitor your online reputation 24/7 Î Generate more positive reviews online Î Handle - and even eliminate - negative reviews Call Now: Be One of the First 50 Dealers to Visit www.powersportsmarketing.com/dn and Receive a FREE Online Reputation Analysis. 825 Hwy 74 South, Suite 101 | Peachtree City, GA 30269 For more information visit www.Dealernews.com/readerservice SCAN ME! MARKETING Direct mail, telemarketing still work SUPPLEMENT YOUR ONLINE MARKETING WITH STRONG OFFLINE EFFORTS A former dealer principal, Rod Stuckey is the founder and president of Dealership University and Powersports Marketing.com. Have a question about marketing best practices? Contact him via editors@ dealernews.com On the Web: Visit www. dealershipuniversity. com to learn more about courses and other tools you can use to improve your business. 46 DEALERNEWS.COM I’M A BIG FAN of online media for marketing your dealership. I’ve experienced much success in executing campaigns with email, Google Adwords, Web landing pages, Web-banners, Facebook, etc. However, I also believe that diversity equals stability. This is one of many reasons I’m also a huge fan of offline media — in particular, direct mail and telephone. A little-known truth is that nearly every great business owner has built his or her business on good direct-response marketing using direct mail and telephone. In fact, right now, in the middle of the information age, good ol’ direct mail is still a $45.2 billion industry. And the telemarketing and call center industry is still north of $20 billion, despite constant attacks from the Federal Trade Commission. Why? Because it works. It troubles me when I hear dealers and experts say that direct mail doesn’t work. That’s B.S. If you don’t think it works, ask yourself why the execs at Google consistently invest in millions of direct mail pieces to sell their pay-per-click advertising. They also employ telemarketers to make cold calls for the same purpose. Also, the Internet Retailer Conference and Exhibition, which touts itself as the world’s largest e-commerce event, is sold via a 32-page direct-mail piece. According to nonprofit research, “Nothing outperforms direct mail for new donor acquisition. Nonprofits wish that social media, Web sites, email, etc. could do this job as well, but so far, extensive experimenting by the entire non-profit world has failed to come up with any way to survive and grow without relying on direct mail.” According to news reports, e-commerce sales over the holidays were up 15 percent year-to-year. But, how much of that purchasing was driven there from print catalogs delivered to mailboxes? My wife ordered Justice Clothes online for our girls after receiving its catalog, where she was given a special discount coupon code. She also placed orders online with Omaha Steaks and Patagonia, but only after perusing through direct mail that was sent to us. E-commerce companies also use offline media to upsell: Omaha Steaks now calls us to replenish as we consume. According to Epsilon research, 60 percent of consumers say they enjoy checking their mailbox and receiving mail (and my guess is motorcycle enthusiasts receiving motorcycle-related messages pumps at least another 15 percent into that figure). The same study concludes that 65 percent say they receive too many emails to open them all. U.S. Postal Service data says that 98 percent M AY 2 0 1 2 of consumers retrieve their mail from the mailbox the day it is delivered and 77 percent sort through it the same day. BUT IT’S ALL IN THE DETAILS Little hinges can swing big doors, and one small detail can sabotage an entire direct-mail or phone campaign. For example, who you’re mailing to makes a big difference in your success. The reason direct mail doesn’t work for some dealers is because they’re sending it to the wrong people. Data hygiene, list segmentation, and ensuring the message is relevant and compelling are all key details of a successful direct-mail campaign. Methodically figure out who you are trying to reach, and then match your message to the targeted recipient. Details are equally as important when it comes to the telephone. Sales are missed by a few words, not a few dollars. With a professionally crafted script, one salesperson can make a call to an unsold prospect, or a repeat customer, and provide new information that converts him into a kept appointment. Alternatively, give another salesperson the same unsold prospect to call and let him just wing it, and he’ll tell you the customer isn’t interested. You must use offline media consistently to maximize customer retention, increase their frequency of visits, and re-activate lost customers. Consider a customer’s journey from the point of purchasing a new bike all the way through 24 months when he or she is now statistically considering a trade. Here are some touch points you can leverage for offline media to boost sales: • Follow-up. “Thank you for your purchase. Here’s an incentive to take our CSI survey and come back to the store.” • Related add-ons. “Hope you’re enjoying your new bike. Have you had time to review all of the accessories available?” • The First Service Reminder. • Birthday greeting (for customer) • Birthday greeting (for bike) • Service Reminder No. 2. • Invitation to your store’s upcoming event. As mentioned, I’m a fan of online media, and you can utilize these touches with email, too. Multi-touch and multimedia have been proven to boost response. However, tangible materials such as direct mail trigger a deeper level of emotional processing than electronic. Telephones allow you to talk, one human to another, and develop an authentic relationship. That’s hard to do on Facebook. SAVING PEOPLE MONEY on more than just car insurance. SM Call 1-800-442-9253 today or visit your local office. Some discounts, coverages, payment plans and features are not available in all states or all GEICO companies. Motorcycle and ATV coverages are underwritten by GEICO Indemnity Company. Boat and PWC coverages are written through non-affiliated insurance companies and are secured through the GEICO Insurance Agency, Inc. 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Repeating an ad ensures it will be seen and remembered! Call Megan Russo for advertising information at 800.225.4569 x2713 DENNIS STUBBLEFIELD SALES, INC. PHONE: 949-240-9357 FAX: 949-240-0104 Made in USA. www.dssalesusa.net For more information visit www.Dealernews.com/readerservice For more information visit www.Dealernews.com/readerservice salvage New & Used Parts for Japanese Streetbikes A & J CYCLE SALVAGE 10 INDUSTRIAL HIGHWAY, LESTER, PA 19113 (610) 521-6700 FAX (610) 521-6868 www.ajcyclesalvage.com UPS SHIPMENTS DAILY Smart editorial. Smart marketing. The bene fits of ATG UP YOUR CUSTOME ATT GEARING VOL. 0 R 201 EMBE SEPT O. 9 .COM 46. N E R N E W S L DEA RS MAY IT ALWAYS BE THE AMAZES around BEST THING ME to without see people even the gear. To YOU CAN bare minimum riding be DO FOR what was honest, when sell you. 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SEPT is that raining, keeps you EMBE they’re visible Those R 201 trying to in traffi are lots 0 c of good the gear, agenta reasons all the time. to always wear all OUT OF MY MIND Mike Vaughan is the former publisher of Dealernews. You can reach him at mvaughan@ mikevaugha n. com or via tors@dealeredinews. com. About unbiasethe only place consum d opinions to get relative er press. on gear ly is the mainlin e N IRON PO Y t OHIO’S BLE WITH WE RUM OF PG&A MASTERS SECTION: SPECIAL 0 201 AR RD FOR GE N FORWA STREET AND FASHIO AD OFF-RO K OLLE NG TIPS DAVE KOSH ES ANDISI MERCHYOUR TO SELL SERVIC ET MARK UTV IT’S NOT WHAT? GLOOM GUESS AND ALL DOOM dn0910_0 68.pgs 08.12.201 0 13:30 A VA STA F/X 1a For more information visit www.Dealernews.com/readerservice advertising Cruise Ahead of the Competition Have you been featured in Dealernews? For instant credibility, put a reprint into your prospect’s hands. Now, that’s smart. 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For more information visit www.Dealernews.com 54 D e a l e r n e w s M AY 2 0 1 2 Dealernews.com CUSTOMER SERVICE A D I NDE X ADVERTISER A D P Lightspeed SUBSCRIBER CUSTOMER SERVICE PAGE 24-25 WEBSITE www.adplightspeed.com AFX North America Inc 23 www.afxhelmets.com CST 33 www.csttires.com Dealership University 45 www.powersportsmarketing.com/dn Geico 47 www.geico.com Harley-Davidson Motor Co 6-7 www.harley-davidson.com HJC Helmets 21 www.hjchelmets.com K & L Supply Co CV3 www.klsupply.com Lance Powersports 17 www.alliancepowersports.com Magnum Distributing 10 www.magnumdistributing.com Manheim Auctions 11 www.manheimspecialtyauctions.com Motorcycle Mechanics Institute 9 www.mmitech.edu/employers MTA Distributing 44 www.mtadistributing.com National Powersports Auctions CV2 SUBSCRIPTIONS Visit dealernews.com to request or change a subscription or call our Customer Service Department toll free at (888)527-7008 or at (218)740-6395. 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M AY 2 0 1 2 DEALERNEWS.COM 55 Missing supper in Sayre, Oklahoma YOU CAN BE GRATEFUL FOR A BOOMING BUSINESS AND A FULFILLING PERSONAL LIFE, BUT YOU STILL LONG FOR GRANDMA’S BISCUITS TIE-DYED TALES Rick Fairless is the owner of Strokers Dallas (a Top 100 dealer), Strokers Icehouse and Strokers Ink. On the Web: Anyone you’d like to thank for the good things you’ve got? Tell us in the comments section at www.dealernews. com/deargrandma. 56 DEALERNEWS.COM DEAR GRANDMA AND GRANDPA, I hope y’all are doing good up there in Heaven. I know you must be really enjoying it up there. I guess that’s why they call it Heaven. I’m sorry it’s been so long since my last letter. We are doing pretty good here in Dallas. I am still working long, hard hours, but I’m living my dream so I guess that makes it OK. You remember you told me and brother Randy a million times that the harder somebody works, the luckier they get! I sure believe that now, grandpa, and so does Randy. Ya know he’s a big-shot attorney in Houston now with his own big law firm. Randy and I recently went to Verona, Italy, for a motorcycle show. It’s called the Motor Bike Expo and it’s one of the largest bike shows in Europe. This show drew over 120,000 people for a three-day event. Them Italians are very nice, but they don’t speak much English. They gave us a couple of awful purdy girl translators, but they weren’t much good at translating. Them Italian boys did like taking pictures with those translators in their skimpy clothes. And the food, I feel sorry for them Italian cats, all they have to eat are noodles and skinny pizza. I couldn’t find a chicken-fried steak anywhere in that country. I think I lost a few pounds. I still remember all them stories you used to tell me and Randy about them old Indian motorcycles you used to ride. Well, since Polaris bought Indian, they asked me to be on the Indian Motorcycle design team. I am very proud to be helping Polaris with their new Indian motorcycle. Polaris also owns Victory Motorcycles. Y’all know I have always been a Harley guy, but these dang Victorys are just flatout better motorcycles than Harleys. I ride a Victory now and I’m proud to be a Victory dealer. I’m already approved to be the Indian dealer here in Dallas. I think when I have Indian and Victory Motorcycles on my floor, I’ll have the world by the gonads. (Sorry, grandma.) I’m now working with Allstate Insurance Company, alongside Arlen Ness and Dave Perewitz to build three bikes so they can take them on tour through 2012. These bikes will go to a lot of the big motorcycle events around the country. I can’t believe that I get to work with my idols, Ness and Perewitz. These are two of the biggest names and coolest cats in our industry. The bike that me and my team built came out really swell. I call this new bike Wilma. Y’all know I always like to name my bikes after pretty women and I named this M AY 2 0 1 2 one after Wilma Flintstone. She really was a pretty hot gal (Grandpa, you know what I mean). Anyway, Wilma is built on my Pam frame which has two 4-inch tubes that make up the frame. One tube holds the gas and the other tube holds the oil. Allstate wanted me to paint it up Fairless-style — tie-dyed psychedelic. I’m pretty well known for these paint jobs and my tie-dye shirt. Oh, yeah, Grandpa, I still haven’t had a haircut yet. Hey Grandma, I think the next bike I build I’m gonna name it after you. I think your name, Golda, is a beautiful name and I’ll build a bike that you and Grandpa will be proud of. I sure miss your home cooking, Grandma. I would love to have your chicken fried steak, fried taters, gravy and your homemade “cat head” biscuits again. I miss the long summer days that we had with Randy and cousin Deanna. I would pay every dime I have for one more day with y’all. I’d turn the clock back and be 10 years old again, going fishin’ with Grandpa, Randy and Deanna and come home to your home-cooked supper! I miss y’all very much and I miss Sayre, Okla., too. Everybody is doing good here in Dallas. My beautiful wife Sue is running my office and she does a swell job. Remember when I brought her up to meet y’all there in Sayre and you wouldn’t let us sleep in the same bed because we weren’t married yet? Heck, that was in the 70s, we were still teenagers. My daughter Lena is now my marketing/PR manager and she’s really doing a great job. She helps me with our charity work, too. I’m big on supporting the Texas Scottish Rite Hospital and we have raised over $100,000 for the children there. It’s a great feeling to be able to help the Texas Scottish Rite Hospital because they help so many children, and they do it all from donations. They don’t charge the families one red cent. I think y’all would be proud of how your grandsons Rickey and Randy turned out. We both work hard and I know that we get that from you. Both of you worked so hard all your lives and me and Randy are continuing in your footsteps. We are very proud of our Fairless name and thank you for instilling that in us. I hope that someday we will join y’all up there in heaven, but hopefully not for a while. I still have a lot of work to do here. I feel like there is something else in the motorcycle industry I am supposed to accomplish, but I haven’t figured out what it is yet. Your loving grandson, Rickey For more information visit www.Dealernews.com/readerservice For more information visit www.Dealernews.com/readerservice