Business is tough ... What's Your Strategy?

When business is slow and money is tight most managers do one of two things.

They either:

1. Seek new business.
   
   Hopeful that the inflow of new customers and cash will rectify their situation.  The problem with this approach is that typically the cost of new business acquisition (advertising, special events) is very high.
   
2. Cut Costs.
   
   Thinking that by curbing expenses they won't need as much business so they will be able to "ride out" any rough spots. Often this 'starves' a business (E.g. "we don't need 4 salespeople") where customer service dwindles and customers seeking a great place to do business, go elsewhere.
   

Here's a third strategy to consider.

Leverage your existing business!

Why is this strategy a great alternative? Well first, presumably you already have their contact information. So you don't have to spend a ton of money advertising to get them on your list. 

Second, they are what you could consider "warm" in that they know you and at least at one time felt positively enough about you to spend money. These two reasons alone make this a viable alternative to new business or cutting costs.

Here are a few ideas about exactly how to leverage existing business.

1. Determine active versus inactive customers.
   
   Run a complete customer listing from your dealer management system. Then create a parameter for what you might consider "active." I.e. have they made a purchase of more than $200 in the last 12 months?  
   
   Then determine who's active and who isn't.
   
   Are 30% of your customers "active?"
   
   "50%?"
   
   "10%?"
   
   What would it mean financially to you if you could increase the activity of your current customer base 10 or 20 percent? Probably a significant amount.
   
   
2. Find out why customers are inactive.
   
   Here's the problem. Even if you come up with a great way to acquire new business. If your dealership's "active" customer percentage is only 10 percent that means that you may get business, but you don't keep business.
   
   So to try and keep acquiring new business would be like filling a leaky bucket. Oh you can do it, but it's frustrating.
   
   Rather with the "leverage existing business" strategy, you can use your inactive customers to help you plug the leaks. Randomly survey your inactive customers and find out why you haven't seen them.
   
   Was it a customer service issue?
   
   Is it a product selection issue?
   
   Something else?
   
   Leverage your inactive customer list to find out what's going on and how you may be able to rectify those issues. You can't fix what you don't know about and trust me ... there are things about your business you don't know.
   
   BTW how you ask for this feedback and how you accept it is crucial.
   
   You don't want to pick up the phone and growl,
   
   "Hey ... how come you ain't bought nothing in awhile?"
   
   This will create resistance and resentment.
   
   Rather ask,
   
   "It's been awhile since we've talked. We're touching base with many of our customers in an open and honest attempt to improve our dealership. From your perspective what can we do better here at the store?"
    
   Then you have to be prepared for brutal and honest feedback.
   
   If they tell you, your hours were conducive to unemployed and retired people, you don't want to launch into a tirade about how hard you and your staff works and you guys should get some time off to go racing.
   
   If they tell you, they were able to get more information from a fortune cookie than your sales staff, don't strike back and tell them you're going to fry their rice and foo their young.  
   
   You asked for the feedback. Take it. Accept it, thank them for it. And set out to improve the big issues that you discover.
   
   You may also want to entice them back into the dealership. Create a post card mailing (they are cheap) with an interesting message: "We Miss You!" and then a compelling offer to stop in the store.
   
   And when you have someone taking you up on your offer, this is your chance to blow them away with great service and help.
   
   
3. Engage active customers.  
   
   Play to your strengths. These people like you. You like them. So ... how can we use this important relationship for a win-win situation?
   
   Ok again here the idea is not to be driven out of self interest. You don't want to call your top customers and say,
   
   "Hey can you come and buy more stuff?"
   
   Rather how about asking them what they like about your dealership so you can amplify these efforts. Contrary to popular belief business and people don't get great by fixing their weaknesses.
   
   Yes you can improve and fill some holes as we demonstrated above, which will result in incremental improvement. But if you want exponential improvement the best strategy is to play to your strengths.
   
   You might try asking them,
   
   "You are a great customer and we really appreciate your business. In an ever present attempt to provide you with a great dealership experience what should we continue to do here at the store? What should we start doing? What should we stop doing?"
   
   And then take action on these ideas!
   
   Additionally you could create a "bring a friend" promotion. Have a special night dedicated to these important customers where you invite them to bring a friend down to the dealership, not to buy, but rather just be introduced to the store.
   
   Perhaps you could give a talk on the history of motorcycling in your area and have some old bikes and some old timers tell some stories. Many people are interested in history and this works as a value added, no pressure way to expose people to your terrific store.
   
   When your customers bring a friend, perhaps they and their friend get a t-shirt or a fob or a pen or a ... you get the idea.
   
   Material gains notwithstanding there are other benefits for your visitors as well. Your existing customer gets to show off for their friends, their friends get an interesting evening learning about the history of motorcycling and you get to add one more person as a potential future customer.
   
   And because it's a referral ... the likelihood of future sales success is improved. 

We all know and love those customers with whom we can joke. And you never know how a well timed comment can sometimes spark an idea.

Here are some word tracks that if you're in the right situation with the right customer you can throw out just for fun. Will they result in additional sales? You never know!

Of course we would never suggest you do anything to jeopardize a real sale or customer relationship, so use your best judgment. And at the same time, these are pretty funny.

• "Ok so this one's for you ... what's your wife going to ride?"
  
• "You're not going to let your buddy ride out of here alone ... are you?"
  
• "Ok so you'll take this motorcycle in black ... what other colors would you like?"
  
• "Alright then this will be your every day motorcycle so you'll need another one for special occasions ..."
  
• "Well, motorcycles are really like socks, they're best bought in pairs. "
  

And of course you can always go into the archives. Here's a bonus statement that is truly a closet classic. "People ask me why I have two motorcycles. I tell them it's because I don't have room in the garage for five."

Don't forget when times are tough, laughter is more important than ever.

It's winter. Sales are down. The economy is bad. Your bike's still in the garage. It's enough to depress even the most enthusiastic person.   

There's one thing that can make this situation better; ACTION! Research proves that people who take action are more resilient, more positive and better able to bounce back from a set back.

Here are some ideas which will enable you to take action, create momentum and get some sales activity started.

1. Become a product expert.
   
   Selling is about confidence. Confidence is about having skills. Learn the product you sell and you will be more willing to engage more customers.
   
   • Read your brochure.
   • Memorize some specs.
   • Do a Google search for reviews.
   • Find web forum conversations.
   • Talk to your technicians.
   • Here's a novel idea ... GO FOR A RIDE

And no I don't buy the "I don't need to know specs I can just look them up," response. While you're looking them up someone else is selling the motorcycle.

You don't have to know everything about the products you sell, but you should know a heck of a lot.

2. Provide real value.   
   
   Too many sales people still believe in nonsense like "a good sales person can sell ice to Eskimos." As if there is some magic word track or magic technique to make someone buy.
   
   Oh you may, through language skills or techniques get someone to buy once. Maybe twice. But that will be it. Truly successful salespeople are never in a slump regardless of time or year or state of the economy, they provide real value and get customers to return to them time and time again.
   
   Too many salespeople ask, "Do you want to buy it?" before a positive relationship has been established.
   
   Work on giving product information like no one else, work on giving customers an experience like no one else, work to solve their issues like no one else and soon you'll have sales like no one else.   
   
   
3. Anticipate the tough questions.
   
   Ok if you've been in the game for more than two weeks you've probably heard most of the questions, objections and challenge statements.
   In case you haven't, here are the most common:
   
   • What's my out the door?
   • What's my best price?
   • I can get it cheaper somewhere else?
   • I can by a different brand for less ...
   • What's your rate?
   • What's my monthly payment?
   • What's my monthly payment ... with the late fee?
   • I'm already approved at another dealer ...
   • Just give me the purchase order and I'll go to my credit union ...
   • Your other sales person told me ...
     

These are the questions you want to anticipate and have thought about your responses. Be honest, give ranges, acknowledge that these are reasonable questions, and at the same time, don't pin yourself down to something you can't promise. It's not fair to you or your customers.

Scores of books have been written about the creation and execution of marketing plans. Most universities have bachelor, masters and PhD programs built around the discipline of marketing.

So for the sake of brevity we've boiled all of this down to just three quick points for you (how's that for adding value!).

Here it is the World's Greatest (and briefest) Marketing Plan.

1. What do you have to sell?
   
2. Who is most likely to purchase what you have to sell?
   
3. How can you reach them?
   

So there you have it. If you can answer these three questions effectively you will be better prepared than most to create effective and synergistic marketing efforts.

I can hear "Pomp and Circumstance" playing in the background ... can't you?

Are You a Dealership Superstar™?  

We had no idea just how many Dealership Superstars were out there! We've been swamped with entries and are sorting through them now. As promised, winners will be announced at www.PeakDealershipPerformance.com on February 8, 2008.

1. Business is Tough ... What's Your Strategy?
2. Five Great (and Fun) Word Tracks for Additional Motorcycle Sales
3. Three Actions to Increase Sales ... NOW!
4. The World's Greatest (and briefest) Marketing Plan
5. Are You a Dealership Superstar™? Contest Update

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