The voice on the phone doesn't even say "Hello," they simply growl, "Are you under MSRP?"

Several newsletter subscribers have written us about this particular problem so I thought we'd cover it in this Peak Dealership Performance Newsletter. Now of course we would never give guidance regarding your pricing or suggest you ban together with other dealers on pricing. That would be illegal and we would never suggest or imply that you ever do anything illegal.

Here are some thoughts on this common issue:

First of all you have to know your dealership's position on this issue. This is driven primarily by your cash flow and debt situation.

If you've got high debt and low cash flow my advice to you is going to be different from someone who has decent cash flow and reasonable debt. A high debt and low cash flow situation is about survival. When that's the situation my advice is to do what you have to do, legally, to keep the doors open. You can't contribute to the motorcycle business, your community or your employees if you're closed.

Here's a diagram to help you understand the actions and time perspective associated with this idea.

Now most of the managers reading this are NOT in a dire situation because they've done things well over the years. So assuming the dealership is in a reasonable cash flow situation and reasonable debt situation, here are some things you can keep in mind when you think about your approach to this phone inquiry.

It is important to understand your market and your motorcycle inventory. You can divide it into three categories:

Fast Movers: Those bikes you could put out back under 4x8 sheets of plywood and customers would still find them and pay full pop. (ex: Baggers in Wisconsin).

High Profit Potential: Clean used units, cool accessorized new units or something that you are uniquely positioned to sell, (ex: all your salespeople are FLHX riders).

At Risk Bikes: Those bikes that are either costing your flooring or about to cost you flooring.

If you're in a reasonable business position I might suggest no price flexibility on Fast Movers, Very Little price flexibility on High Potentials and then flexibility on At Risk bikes.

Instead of reducing the price of the bike, rather add additional value to the At Risk units by offering Free ESP or PPM, or Tires for Life or Batteries for Life.

Does this impact profitability? Yep.

Does it help protect the brand and your market? Yep.

Does it relinquish control to the buyer like a price off on the bike? Nope.

Plus you can rotate these offers around so there is always something new and interesting.

Now one more piece of the puzzle ... and this is a big one. What is YOUR philosophy about business? Mine is that all business is NOT good business.

The customer willing to spend the least will ask the most. And I can't afford his business; mentally or financially. So, do you have the self confidence and self esteem to be able to walk away from the business? (Many don't).

And believe me when we say this, even today in our consulting practice we have some projects and former clients whose business we just don't want. So we don't take it.

As an aside, how can you walk away from bad business? Make sure you have more business than you can handle. How do you do that? Effective prospecting.

However, most dealerships and salespeople do not do a great job at this and it creates a low flow into their prospect pipeline. That's why when they get someone either on the phone or in person even remotely interested in a bike, they stumble over themselves and do whatever it takes to get the business, which typically is relying on a discounted price.

Ok, so now that we're set on strategy we can talk about how you should handle the phone.

Caller: Are you at MSRP or below?

(You should try and capture the customer's name and number.)

You: Great question, you've caught me in the middle of something (you want to wrap up what you were working on), I need to put you on hold for literally five seconds. I see you're calling from 212.555.6565 if we get disconnected can I reach you there?

Caller: Yes.

You: Great and who am I speaking with? Eddie van Halen. Great Eddie ... five seconds. Put on hold capture data. Collect thoughts. Pick up in five (see you're already keeping your promises).

(Just as an aside, some callers are rude. If I get attitude here like, "Just answer my question!"   I'm going to say something like, "Sir, I have not been rude to you. And I will not tolerate you being rude to me. Would you like to continue this call?"   Doesn't happen often but you should be prepared for it.)

You: Ok Eddie, I'm back thanks for waiting. What motorcycle are you inquiring about?

Caller: I want to know if you are selling the FLHX at MSRP or below.

You: Here at Star H-D we have over 125 new and previously owned H-D's in stock at all times, including the FLHX. We sell our motorcycles at MSRP so we can better serve you. And at the same time we always have interesting bikes, unique offers and cool things going on here at the store you can't find anywhere else.

Here's what I'd like to recommend. Why don't you find some time, come down to the store and I'll give you a personalized tour of the bikes, the store and then you can see for yourself why people choose to do business with us. Would you like to come in today or tomorrow?


Here's a deconstruction of this approach:

The entire objective of this response is to pique their interest enough to visit the store so you can prove to them in person why doing business with you is good for them.

Reinforce the name of your store and your product availability of their motorcycle of interest.

Answer the question and position it from their perspective. Few low price places have terrific events, superior employees or great customer service.

Let them know, subtly, that on some motorcycles their may be special offers like service offers or batteries for life. This is the "unique offer" reference.

Use the word "recommend." You're the expert here and people defer to experts.
Move the conversation to the next, "Yes," which is setting a time to get together.

What if they say "No," when you ask if they would like to come in? Simply say, "Ok, well you certainly don't have to decide right now. Think about it and when you're ready, give me a call and we'll show you around. My name is Mark and my personal cell phone number is 123.456.7890.

Why this?

It's no pressure and it keeps the conversation alive; "Think about it and when you're ready ..."   Be here for reasons other than the "sell," i.e. "and we'll show you around."

Here are a few more while we're at it.

Caller: What's your best price on the 2009 Road King?

You: Here at Star H-D we have over 125 new and previously owned H-D's in stock at all times, including the FLHX. We sell our motorcycles at MSRP so we can better serve you. And at the same time we always have interesting bikes, unique offers and cool things going on here at the store you can't find anywhere else.

Here's what I'd like to recommend. Why don't you find some time, come down to the store and I'll give you a personalized tour of the bikes, the store and then you can see for yourself why people choose to do business with us. Would you like to come in today or tomorrow?

Caller: The guy down the road is cheaper.

You: Are you looking for a cheap price on a motorcycle or are you looking for a great dealership experience?

Caller: A great dealership experience ...

You: That's exactly why people do business with us! We're a gold star and shield award winning dealership, we're open 7 days a week and all of our salespeople give their customers their personal cell phone so you always have a contact. Here's what I'd like to suggest. Let's schedule a time, come on in and we'll give you a special behind the scenes tour of the store.  Would you like to come in on Wednesday or Thursday?

Ok so that worked out great, but what do you say if they say they want a cheap price?

You: I can guarantee that if all you're looking for is a cheap price; you WILL be able to buy this motorcycle for less somewhere else. But if you're looking for a great dealership experience, there's nowhere better than right here.   We're a gold star and shield award winning dealership, we're open 7 days a week and all of our salespeople give their customers their personal cell phone so you always have a contact.  Do you have any other questions I can answer for you?

What happens if they say both?

You: I've been told you can have anything in life you want but you can't have everything in life you want. You will almost never find the cheapest price and the best dealership experience under one roof. Economically speaking it's virtually impossible.   Do you have any other questions I can answer for you?

Here's a quick look at these responses:

• Questions regain control of the conversation.
• It's an either or question, so most will pick one.
• The word "cheap" it's negatively charged and most don't want their motives characterized this way. So it sways the response.
• When they want a great dealership experience, I tell them why we're good.
• When they want a cheap price I politely disengage and move to the next customer.
• If they want both I explain the contradictory nature of this thinking.
• The transition question of, "Do you have any other questions I can answer for you?" Assumes you've covered this and moves the conversation to the next positive point.

So there you have it, some quick thoughts on a complicated and emotional topic.