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In 2020, while overall consumer demand in powersports has been surprisingly high, the sudden shift from direct storefront operations to more distanced and digital ones caught many dealerships flatfooted.
This sharp change in course has thrown many dealers into disarray, allowing inefficiencies to drain cash and resources from what should be almost record-setting sales.
In the coming year, dealers must align their longstanding business practices with these new innovations to keep margins high, deliver excellent customer satisfaction and be ready for another round of unexpected challenges.
During this panel discussion featuring a powersports dealer, a dealership strategy consultant, and a technology expert, you’ll learn how your dealership can:
- Unify customer experience and product fulfillment across all sales channels
- Decide which numbers you need to pay attention to in order to optimize your operations
- Forecast and budget where it matters most – growth and profit
Read the transcript
Amy: Hello, everyone and welcome. My name is Amy and I am the Managing Editor of Motorcycle & Power Sports News. Thank you for taking the time to join us today for this webinar entitled In-Store Dealer Operations The Unlikely Key To Your Digital Success. Before we get started, I’d like to go over a few housekeeping items. If you have any questions for our presenters, please type them in to the questions box. We are going to hold all audience questions until the end.
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Now, I’d like to introduce our panel of presenters. We’re happy to have Derek Bannister joining us today. Derek is the founder and owner of Banner Recreation, which has five stores spread out through British Columbia and Alberta. We also have Brian Schumacher joining us today. Brian is the president of Momentum Consulting and has worked in developing technology for the power sports and motorcycle industry for over 30 years. Finally, we’d like to welcome Brian Kelley. Brian is a Systems Architect at Blackpurl and has 15 years of experience in the dealer software industry.
Now, let’s get started with our presentation. So far in 2020, overall consumer demand in power sports has been surprisingly high. The sudden shift from direct storefront operations to more distance and digital ones caught many dealerships flat footed. The sharp change in the course has thrown many dealers into disarray, allowing inefficiencies to drain cash, resources from what should be almost record setting sales. In the coming year, dealers must align their long standing business practices with these new innovations to keep margins high, deliver excellent customer satisfaction and be ready for the round of unexpected challenges.
This first question is for each one of our presenters. But let’s start with Derek. Can you describe challenges to the customer experience and product fulfillment you’ve observed in dealerships this year?
Derek Bannister: Yeah, great question. There’s a note this year has been unprecedented, and I trust you’d all agree. One of the things we found is with the dealership mandated closures or even communication with your federal, provincial, municipal leaders, and talking to people telling people to stay home to be safe, not going to public places. In our experience, we saw it really break our customers into two major groups or here’s a couple of observations we picked.
Derek Bannister: Number one, we had a large group of customers that were really flocking into the door that came into the store looking to purchase units, parts, service, get their units preparation for family time, even personal time. Doing everything they could to find a way to get into that bubble that they were into. It really taxed the heck out of the dealerships that we’ve operated or we operate. We walked into this thing expecting a recession, we rocked into it really expecting the worst and it really came out we were busier than we ever expected.
Derek Bannister: The other type of shopper that we noticed was the customer, or the consumer that was staying at home, picking up the phone, they phone the store and they slammed the phone systems. Phones ringing off the hook. These are the ones that, maybe abided by or bought into some of the followings of the rules, et cetera, and were really just not wanting to come in to the dealership to buy what they needed, or they’re just ordering it or online, and really taxing that other side of the dealership.
Derek Bannister: The concern I have is, when I take a look at those two, the concern I have is it all flooded the market for us within two to three months, maybe four months on the onset. We’re just coming out of that now. I worry more about the fact we weren’t prepared for the onslaught of customers, we weren’t prepared technology wise, we weren’t prepared communication wise for that.
Derek Bannister: From a fulfillment issue, I trust that, well, just to share our experience, we move through a lot of inventory. But as inventory got down and low or non-existent, we weren’t able to procure the fulfillment to meet customer expectation. I do worry about long term challenges. Obviously, the consumer is not feeling we’re managing the business as well enough to sustain the future.
Amy: Thank you. Brian S., can you hop in on this question too?
Brian Schumacher: Yes, thank you very much for inviting me to participate in the panel. I worked with Harley Canada for many years, and I’ll give you a little different perspective on things, because, with the pandemic, we really were pushed into an awakening where suddenly online business became a front and center. Oddly enough, Harley Davidson, Harley, really, up till now by policy, had never allowed the dealers to even sell PMA parts and accessories online.
Brian Schumacher: Of course, the gloves were off on that. So, the policy changes immediately, and dealers were encouraged to adopt eCommerce capabilities. Oddly enough, and I was just checking the stats yesterday that despite that, we’ve only seen about a third of the Harley dealers in Canada actually activate an eCommerce site, an eCommerce presence. That’s not all that unusual, because there’s always those that are the first up, the leaders, they tackle anything there is. Then there’s always those that lag behind because they’re so unfamiliar with it, and it’s just not theirs, they’ll let others wade into the water first, and that’s fine.
Brian Schumacher: However, it’s forced everybody to revisit this entire thing. The odd thing I’ve seen is that over the last eight months, the sales have grown. The eCommerce sales that we have seen as we get reported into the dealer dashboard every month, they have grown, but they still range only in the area of between 3% to around 12% at the most of a dealer’s monthly sales. It is creeping up, there is no doubt about it. It’s here, it’s not going to go away, and now the dealers are faced with embracing that whole concept of how do I make this the most effective thing? Because if it’s a new segment of my business, I’ve got to really embrace it and give the customer the proper response.
Brian Schumacher: When I say that proper response, it’s in the area of order fulfillment, are my staff capable and competent to process efficiently internet based orders? What’s the accuracy of the inventory that I’m posting online? Because we can say something’s available, and then if someone tries to order it, it’s not there. Then how do I handle return credits? All those things are a reality that we’re going to ship things that are the wrong item or the wrong size.
Brian Schumacher: That unevenness of customer experience can certainly detract from that customer satisfaction that we’re all very keen on. Those are a lot of the customer experiences that I’ve seen in the last eight months.
Amy: Thanks. Brian Kelley, can you please answer this first question as well, I’d like to hear your opinion.
Brian Kelley: Sure, Amy, and thanks for having me. With my background and my experience over the last eight months or so, it’s really been around dealers, asking new things of their existing software, their existing technology, and then trying to adopt new technology at the same time. As both Derek and Brian have mentioned, whenever it comes to those online or over the phone customers who are really staying away from the storefront, you have to now wonder, or figure out how you can get your messaging to that customer, and then maintain that customer experience?
Brian Kelley: As Brian mentioned, you have a concern around making sure the inventory you have in your store is available to be seen, be browsed and be purchased by these remote customers. Whether it’s over the phone or online. That’s an existing technology problem. You’re not going to be shifting your inventory to a new system overnight, in the middle of a pandemic, especially on the front end of it whenever you’re not sure what’s happening, and the demand took a lot of dealers by surprise.
Brian Kelley: You had that challenge of taking existing technology, existing software that isn’t perhaps geared towards a digital sales channel, and then you had to match that with a need for some new technology. Whenever it comes just handling capacity, whenever it comes to fulfillment and fulfillment process, you might be looking at a new solution for shipping and receiving, you might be looking for a new solution whenever it comes to having your staff work more remotely themselves, while still fulfilling tasks you need them to finish that relates to dealership operations.
Brian Kelley: You end up in this place where you have your existing tech has to adapt, and then your new technology has to be brought on board to solve real problems that you’re experiencing, and mesh well with your existing technology and practices. That was, I think, the biggest challenge that the last eight months threw at us, as a software provider and with dealers we’re servicing.
Brian Kelley: I think that, as I think Brian mentioned, that trend was already happening, the shift that the digital presence is not going to go away, it has been increasing. This was just a real rapid acceleration, and it did cause a lot of disruption for dealers, welcome disruption, given the alternative would be no customers, and just shutter door fronts. It was a good thing in the end. But it really was a challenge.
Amy: Thank you. I do have a follow up question for Derek. As an owner of a group of Power Sports dealers, can you describe the actions you’ve taken, and can you share with us some of the tools that you’re using to fulfill all the sales across all channels?
Derek Bannister: Yeah, thank you. What’s interesting is a lot of these things that Brian was just talking about, we’re always on the radar, but this definitely accelerated a bunch of it. I think the big thing for us was the phone system was really getting the group of stores onto a common and a phone system, more modern phone system that can communicate better, manage the voicemails.
Derek Bannister: I think the days of an old phone system where you’ve got one or two or three lines can now easily be replaced by really infinity lines, but really managing the voicemail. The trick to all that in the voicemail side of it, is making sure you’ve got the discipline and the processes in place to make sure we get back to the customer.
Derek Bannister: Even to a place we’ve been able to transfer phone calls to employee’s cell phones, that was certainly one of the big things we did. We also, we did a deep dive into dealer software, and dealer management software, if you will. We wanted to be more current, we wanted to be more nimble. The timing was exceptional. However, as quickly as they say that, man, I didn’t really fully appreciate what the pandemic would have done. We were busy, and in the middle of that, we were trying to make some changes.
Derek Bannister: One of the things that was also talking about earlier by the other panel members was inventory management. We’ve tried to implement and have and continue to implement inventory management software. We’ve been focusing around making sure we’ve got it first in first out, understanding what our next requirements are going to be for the next 60, 90 day cycle. I do feel, as a company, we would like to get away from bookings but really making sure we’ve got inventory available for the consumer when they need it, in a timely manner, and making sure we’ve got enough make sure we’ve got enough to fill demand.
Derek Bannister: Let’s see, what else we do. One of the big things that I see what’s going on, and we’ve worked hard on this is trying to manage the way to outsource certain department. We try to minimize our footprint inside the dealership in certain roles where we didn’t feel we needed our accountant at the dealership or even our business office, we felt there was an opportunity to outsource our business office, or move it remotely to manage the group of stores, then doing that obviously gives us some flexibility.
Derek Bannister: Obviously, eCommerce is a big thing. I think that’s the big Achilles heel in most dealerships, and that’s one of the things we’ve continued to work on and evolve. If there’s ever anything we put the majority of our efforts into right now is really trying to manage that and that expectation. Then once we talk about outsourcing, I think our marketing is another great example of we shifted that, instead of having somebody in the store all the time managing it, we felt that we could do as good a job remotely, and use outside apps, outside companies across the globe, for the most part, like Upwork and Fiverr and really try to cut the cost in that department also. It’s been a busy six months, and we’re not done, we’ve got a lot of work to do. Good question.
Amy: It’s great to hear that you’re keeping up with everything, and the work is not done. That’s great. You did mention eCommerce. I’d like to jump over to Brian S., with the accelerated, and in many cases for shift to eCommerce, what are some of the common performance challenges you’ve observed?
Brian Schumacher: Yes, I think in working with a lot of the dealers, the very biggest thing that I found was the challenge for these dealers was just embracing how to understand the eCommerce business through the traditional things of how do we measure this, and manage it so that it’s a success? It’s no longer just having a website and trying to plug in an eCommerce package and throw everything into a trust area of, okay, I’ve got a partner that’s going to take care of that. You really have to start to understand and learn all of the metrics, and then the KPIs that are going to be those success factors that you can actually visually monitor where you’re going.
Brian Schumacher: It really gets down to that understanding. We’re all used to KPIs, we’re all used to performance measures. But now we’ve got a whole new set of things that come along with managing a website, determining the effectiveness of that. Also, those big picture tracking things. We all know it’s easy to track results, we can even easily add an eCommerce parts and accessories line, sales and cost of sales into our general ledger. We can track the volume of sales in dollars, we can track the number of transactions, which is always very easy to monitor. But do you know about getting into measuring the effect of your eCommerce site?
Brian Schumacher: That’s where you get into a whole new world of metrics, which are those quantifiable performance measures, like the average order value or a conversion rate. Then determining out of those metrics, what are the KPIs? What are those key performance indicators that we want to track to measure against some sort of a target, a budget? What is going to tell us that we’re successful? Those KPIs are those things that you’re going to track for growth, and measure our process towards our goals.
Amy: Thanks, Brian, it does sound like data is vital. Because if you’re not measuring it, you can’t really improve on it. As a follow up question, Brian, what advice would you give a dealer who wants to measure their progress and performance and where would they start?
Brian Schumacher: Well, like any business, that being business people, we always need to approach this with the fundamental thing, which is a strategy. Really, you need to back up and think about this is we’re going into a new business area. It may be an adjunct addition to all of the functional segments of your business now. Your parts department, your unit sales, even, and service. But you still need a business plan, you need to look at it from the point of view of a strategy.
Brian Schumacher: I know I took a look at Derek’s websites, and I was quite impressed that you have a lot of the eCommerce enabling already. But in many areas, I can see you’ve done exactly what I thought you would do, is there are only so much you can do at once. My suggestion is, if you’re looking at wading into the eCommerce, you really need to back up, develop that business plan, assess the resources internally what you have. Sometimes you have that person in your staff that is very savvy on social media and also on eCommerce already. That’s great. You’ve already got a head start, but that’s only part of your plan, because you need to actually look at all of those areas, the unit sales to VNA online through an eCommerce site. Do you want to enable service scheduling online and maybe hook up to a mobile service order pickup and delivery?
Brian Schumacher: You can even automate things like storage and rentals online with schedules, even finance applications with an F&I partner. But understand this, that to try to do everything at once is foolhardy at best. You need to pick an area, focus on it, know that you either have the resources or you can get the resources to approach this, and then also start investigating, researching what are those performance measures, just as I spoke about earlier, because you need to learn everything there is about that area on how to measure, because you need to know what success looks like.
Brian Schumacher: There’s a rather good article online that I tracked down, that will give you all of those success measures that really start to open your mind as to, okay, what am I getting into? That article is by Darin Lynch. Darin is spelt with a D-A-R-I-N and Lynch is L-Y-N-C-H. I just googled how to measure eCommerce success, and this article came up and it’s titled, Which eCommerce Metrics Should You Use To Measure eCommerce and Why Are They Important?
Brian Schumacher:
It’s going to go through a very important aspect of eCommerce that really focuses on the effectiveness of your entire strategy. It takes you into what he terms the funnel, which covers not only the fulfillment cycle, but also those cycles of marketing, which really are embodied by metrics that measure that discovery process of you’re online, you’re available, you’re in the market to sell to customers, right, so that they consider you as an option, and how you convert it to a sale, and then also right through to retention, and follow up advocacy. Those are all those areas that really are our most important, that the starting point is basically that plan. That’s strategy, you got to develop that business plan.
Amy: Thank you. Giving us a little homework for something to do afterwards is to get our plan started and get it initiated. Brian K., let’s shift gears a little bit and talk about technology. It seems to me that there are many online tools that can help us or hinder a dealer with their operations. As a system architect, can you describe some of the challenges and solutions you encounter at the dealership you work with?
Brian Kelley: Absolutely, and it’s a great segue because I think where Brian Schumacher left off is exactly when you need to begin with technology. Technology first is often a very poor approach to figuring out what you need to do with your business. You need those business goals, that business plan that lays out for you what you want to achieve. Technology is the ultimate facilitator. It’s never good first step to look at technology.
Brian Kelley: That’s the first thing is, don’t go into the technology marketplace when you’re looking for, oh, I need to do something online, or I need to do something around customer engagement. You don’t want to go into the technology area until you have some concrete goals. You’ve imagined that customer experience and that customer path, you’ve imagined the infrastructure that you have, and you might need in order to achieve your goals, and then you can look at technology as a way to accelerate that process and facilitate that process.
Brian Kelley: That’s the first recommendation I have is don’t start with tech, it’s too easy to be enamoured with what is possible in the technology space. If you go in with a concrete goal, that’s going to give you that filter you can use to pick out the pieces of technology and the solutions that you really need to run your business. Because of course, as with the business plan, you’ve already identified some of these costs, there’s new costs with new technology, both in terms of the bills from the tech suppliers themselves, and the cost to continue to maintain and operate those.
Brian Kelley: Each time you shift your business, you might become more experienced, more practice with that shift. But you don’t want a lot of volatility, especially in your critical systems over time, that has a ripple effect throughout your entire business in terms of costings, and it can impact your customer experience and even your brand, your business image.
Brian Kelley: That’s the first thing. The second thing is whenever you’re looking for that application, you want it to grow with you. If you find a piece of technology, let’s say that is a digital storefront, you don’t want to look at it and simply say, does this meet my needs today? You want to make sure you found a solution that’s growing over time with your business. Because as the last eight months has shown to everyone, what you need today is only a fraction of what you will need tomorrow, and you need something that can scale with you, and something that can adapt with you.
Brian Kelley: Traditional technology providers tend to have a slower response time to certain demands. If you’re doing like what Derek had said, and you’re looking to streamline, you’re looking to slim down your operations, but still maintain or even increase capacity and response time, you have to look in that space for your technology. To get a bit more specific around tech and around solutions, in any one area, you’re going to have your tech leader.
Brian Kelley: What I like to do whenever I’m talking to a customer, or even helping a business set out their own technology strategy is you often have an idea either as experienced as a business person, or as a consumer yourself with what experience you want to give the customer. If you want someone to be able to buy from you the way you buy from Amazon, for example, you can use that as a filter without having to engage with a lot of technical lingo, and a lot of deep knowledge of what technology is, you can still engage by looking at outcomes.
Brian Kelley: The way you gauge technology is you go in with the end in mind, you have clear goals set with what you want to achieve, you have a budget and an understanding of what your costs thresholds are, you find a partner that grows with you in whatever area of technology you’re looking at. Then finally, you really do hold them to your own set of standards for that technology. If you would not enjoy that experience as a consumer, there’s no way you want to bring that technology into your dealership.
Brian Kelley: Oh, and the final thing I’d say is, much like a business plan, have a technology plan. As you get into digital in particular, your data is you possibly your most valuable resource long term. Knowing what you’ve done, and being able to use that to plan for the future, both from a budgeting perspective and a forecasting perspective, like demand forecasting in the place of inventory, none of that’s possible without that knowledge, that data set you’ve got.
Brian Kelley: As you engage with more technology, you’re going to find more streams of data coming into your business, and more demand for that data to be funnelled elsewhere, like up the supply chain, for example, to your key vendors. If you don’t have a plan for how as you engage with this new technology, that data flows together and is managed of a master data management scheme, you’re going to find that while you have infinite possibility today before you’ve really dipped your toe into the technology lake, tomorrow, you will quickly run into a problem where you have significant overhead and can feel trapped in your tech stack, which is never where you want to be. That’s where I would start whenever it comes to technology, that overall plan.
Amy: As a follow up, Brian, what advice would you give to dealers who have yet just start, or have started to run both an online and a physical store?
Brian Kelley: If they haven’t started yet, a lot of what we just said, I think applies is looking at that experience you want for the customer, making sure you’ve got that business plan ahead of time, and you’ve got some concrete goals to build towards when you’re finding that technology. If you already have begun, it’s a matter of unifying that experience. It’s going to help you from a costing perspective, and from an operational management perspective, whenever you have… Let’s look just at your shipping receiving, right? If you have a digital sales, and you still have over the counter sales, and as I think Brian Schumacher mentioned, a part is sold everywhere, it’s part of your over the counter parts sales, it’s part of your service center, it’s part of your unit sales experience.
Brian Kelley: Whenever you think about that already, and how important that shipper, receiver is for maintaining that level of communication responsiveness to the demands of your customer base, now you layer on a digital channel. Now that adds a new level, because fulfillment now is no longer the customer in the store, fulfillment ends at least on that point of sale, that point of transaction, now ends when the customer opens the box, and they have what they want.
Brian Kelley: When you think about that, and you think about, okay, I have an online storefront and a digital storefront. It’s not part of or a subset of any one of your existing revenue centers, you should really be treated, as Brian mentioned, as say, another revenue center that has its own considerations, and it has its own place in all of your key operations. If you have an adopted technology that gives you visibility across them both, you’re going to find it very difficult to be able to measure and respond to what’s happening in your business.
Brian Kelley: As I think was mentioned previously, inventory publishing on your website, if that’s a plan you have and yet you’ve isolated it till this point, it can be very difficult to make sure that a customer has that Amazon like experience, if that’s what you’re expecting. You will disappoint customers in store or online, if you don’t have a clear sense of your inventory, and with the way that supply chains are constantly shrinking, and everyone’s trying to respond faster, you’ll find a real problem in being able to connect your digital presence in what you’re presenting as opportunity to sell the customer and what the reality is in your store and with your supply chain. I think unifying is the key there.
Amy: Excellent. Thank you. I did want to mention to our audience again, as a reminder, feel free to ask our presenters any questions that you have on your mind in the question box, and we will get to those right after the presentation is done. Our next question is for everyone. But I will start with Derek. When it comes to budgeting and forecasting, what does it look like when a side hustle becomes its own department? Where should dealers be investing their time and money to ensure that they can deliver growth and profit for the next year?
Derek Bannister: Yeah, good question. I’m going to steal Brian’s thing only because it really resonated with me, and it really just speaks to beginning with the end in mind. I think anytime you’ve got a side hustle that you’ve got a clear sight line or optics of what the growth is going to be like in the future, once you understand what it’s going to look like, then really, you’re going to start pulling back the layers of the onion to get where you need to get through to will be software, it will be thinking app-based or software. Whether it be a platform, to manage your eCommerce.
Derek Bannister: If that is, in fact, the side hustle that we’re referring to. You need to look at that when you begin an end in mind, you’ve got to look at that a year out. It’s all departments from this shipping, receiving, to the phone calls that the customer is going to be expecting for the communications. Every one of those details has to be tightened up in the process to maximize every one of the opportunities.
Derek Bannister:
Let’s be honest, consumers today are more savvy and they will manage a Google review as quickly as they’ll manage the click of the button to give you your money. They’ll try to take it away if you’re not meeting their expectation.
Derek Bannister:
From a dealer’s perspective, investing time and money. I can suggest to you, side hustle is just part of the business, but when your side hustle or the business is we’re not meeting the customer expectation, we need to review that and tighten up on every department to get back to where we need to get the level of stability going forward.
Derek Bannister: You asked a question about where dealers should be investing their time and money. I think anytime that side hustle that we’re talking, if it is an eCommerce, while that’s going on, I would say to you, the biggest focus right now needs to be on the service department and its operations. Because until you’re ready, and until you’re going, and until that side, hustle’s 100% dialled in, you still need to make sure you’re focusing on your after sale side of it. To me, that’s the big thing.
Derek Bannister: Your online eCommerce, I think the other opportunities where they can focus on is outside of that, whether it be storage, controlling your customer’s inventory. If you control the storage, you can control the service department in most cases and getting it sorted out. I think mobile services, with pickups and deliveries, I think Brian also alluded to that, I think it was, and it won’t stop there at all. It all is going to have to start with your software is going to be compatible with what we’re talking about, and different apps. The system has to be nimble, they’ll have to tie into your accounting. I think those are the things where they’ve got to focus their efforts on to right now.
Amy: Excellent. Brian S., can you also answer this question?
Brian Schumacher: Yes, thank you. Just to complement what Derek said, just from a perspective of accounting, which we would all recognize what our internal dealer management system profit and loss statements may look like. Some of you, hopefully are departmentalized, so that you can actually see a nice profit and loss statement for the parts department. In the concept of actually segmenting eCommerce as its own department, I think what Derek highlighted is the fact that it’s really not a separate department, it’s really an extension to the business efforts you do in every department, it’s a change of a way of thinking.
Brian Schumacher: There is never any way you can actually just monitor volumes to a point where you’ve got enough business that now we can dedicate resources, and say, oh, this is a separate department. You may have specialists in the area, such as social media marketing, et cetera, that do give you that focus on the net, and your presence on the net, so that you’re considered as an option in the market, and you’re competing against those that are buying off of Amazon or buying from other dealers, but you’re considered in the mix. That extends right through, as Derek pointed out from unit sales, through to rentals and storage and service parts. It’s a conceptual shift in your model.
Brian Schumacher: Again, I come back to how do you manage this for growth and profit? What do you focus on? That gets you down to understanding those metrics, again, taking those KPIs, focusing on the effectiveness of your presentation, out in the marketplace as a contender for eCommerce business. Because the reality is the pandemic accelerated the eCommerce growth within the world, across the globe. People are at home and now they’re finding how easy it is to actually communicate and order things online, and that’s where the searches come. It’s not going to stop, it’s just going to go up quicker on the hockey stick of growth.
Brian Schumacher: Understand that it’s here to stay, and it serves you well if you start to really understand it and embrace it as a new extension to your business model.
Amy: Thank you. Brian K., can you also answer this question on when a side hustle becomes its own department?
Brian Kelley: Sure. I certainly agree with both Derek and Brian when it comes to thinking of if we’re talking again, digital sales and digital presence, you have to think about it, how it impacts every area of your existing operations. In some respects, it’s almost like a new store rather than a new department and requires a lot of what you already have to function properly.
Brian Kelley: Another area, which was touched on briefly, but I think you have to recognize whenever you have that digital presence is that it has its own reputation. It has its own way of impacting how people view you and the services you offer. I think Brian touched on this when he’s talking about during the sales process digitally, and you work people through your funnel, and you convert, after you’ve converted them, and you’ve made that first sale, there is an advocacy component, and as Derek mentioned, an unhappy customer, more so than ever knows how to make their voice heard in that digital space.
Brian Kelley: As with most things digital, it scales. That one negative review can easily become something that your dealership is known for. When we think about customer loyalty, and we think about customer satisfaction, in the digital space, it’s much of what you already consider whenever you’re thinking about servicing and store, we know that the service department’s the heart and soul of your loyalty, most likely with your customers. That’s where you have your most extended experience with that customer over the lifetime of them servicing their units with you, and that’s where you can find a lot of loyalty.
Brian Kelley: In the digital space, it’s slightly different, and this is where Brian mentioned, finding experts, or people who have expertise can really make a big difference here. Just like you can find someone who helps your service department understand what’s a good customer experience, how do you engage and make sure you have that loyalty and that retention of customer over time, so you can start looking at those lifetime value stats. That’s the same kinds of goals, but a very different kind of animal, digitally, when you think about your marketing spend.
Brian Kelley: Again, marketing spend, whenever you’re marketing something for in store, there’s not nearly as much connective tissue there, as you do whenever it’s digital. There’s a lot more you can do with metrics, and those metrics are a lot more directly connected, there’s not a lot of influence in the digital spaces whenever it comes to dollar spent, and then return on those dollars. I’m monitoring that by having the expertise to understand that, that it can really make a huge difference in, if your digital presence continues to be a footnote in your financial statements, or if it has a leading role.
Brian Kelley: I think that part of it, whether you consider it’s a department or a subset of a department, it really is… If it is part of your important plan for the future of your business, and I think we’ve all said, it’s not going away, and it should be, it needs to be treated with that same level of attention, when it comes to making sure you have the expertise in house to master it, and then to take that expertise to go where you want to go with your business.
Brian Kelley: It really is more a matter of treating it with the level of respect that it deserves in our current landscape, and then making sure you’re making investments that will yield those results. I think Brian mentioned accounting, accounting is the ultimate measure of success. That’s where the dollars and cents fall out. Making sure everything from accounting to operations or general operations through to your sales and marketing, all of that needs to be treated with that level of respect in order to find out where you are today, where you want to go and have I gotten there yet?
Amy: As a follow up, Brian, there’s so much data available to dealers right now. What should a dealer principal be looking for from the software that they select to help them run their business?
Brian Kelley: Well, I think you can start right there, that data first approach. How hard is it to see the data that is in that system? Because you have two requirements with most software that helps you run your business. One is, does it get the job done? Does it actually help my staff? Does it help my business get that job done quickly, cleanly, efficiently, and effectively?
Brian Kelley: Then, on the other side of it, can I see what has been done, and how much effort does it take for me to figure out what that is? Something that’s been touched on is communication. A great example of that and something a lot of people don’t think of as data but truly is, is comm channels. What conversation, what chatter is happening with a customer in a particular area? What level of conversation needs to happen around any particular action in the business. When you think about that, you can really build data around things that you feel are more qualitative than quantitative. But you can build those metrics and they become very valuable.
Brian Kelley: Look at the digital space. Before likes and favorites were a thing, people really didn’t understand that there was metrics that apply to attention and around a conversation. If you think about the amount of time you spend in your dealership talking, to having store wide meetings, having department meetings, following up, making sure that people are doing what they need to be doing when they need to be doing it, that’s an area where if you have technology assisting you. Whether it’s a phone system, and a CTI implementation, through to that point of sale system, or your marketing solutions, or your accounting systems, that level of noise is something that should be measured.
Brian Kelley: Whenever you’re looking at technology, and you’re saying, is this working for me? It’s how well it gets the job done from the productivity and efficiency perspective, and then how well does it help me get access to the data, I need to make that next decision. If I could add a third thing, it would definitely be in the area of will it meet my needs tomorrow? You don’t necessarily know what your need is tomorrow, but you can see if the technology you’re using has shown the ability to adapt over time.
Brian Kelley: One thing that’s very interesting to do when you look at a technology solution is to see its history, its evolution, and then you can begin to understand, because the past is prologue, so you can end up in a space by looking at a tech solution, what have they done over the last 12 months, 18 months with that technology? Has it matured? Has it continued to evolve and develop? Or is it something that’s more of a sunset product or something that doesn’t evolve quickly?
Brian Kelley: You can find benefit in both places. If reliability is what you’re looking for, and something far less ready to adapt or take a bold step, then you can make that purchase decision. In some areas of your business, emergent technology is not always the best option. But oftentimes these days, emergent technology 10 years ago was considered anything built within the last two years. In today’s tech space, especially outside of the power sports industry, two year old technology is already legacy technology in a lot of ways. So, there is that acceleration you have to be aware of.
Brian Kelley: But in general, whenever we’re talking about how you want to look at technology, and how you can measure that against what you need, it’s about the data, and it’s about the job getting done. Is the job done? Then can I measure that the job is done so I can plan appropriately?
Amy: Thank you. Our last question before we get into the audience Q&A is a two part and it’s for everyone. But I’ll start with Derek. What can dealers do right now to make a difference to their consumer experience? And what should they aim to do to stay competitive next year?
Derek Bannister:
Good question. I want to just follow up a little bit on Brian K talked about a minute ago. It falls in where we were talking about here, on 2008 through end of ’12, I think dealers that have sat through that or went through that, it was some challenging times for all businesses, and I would suggest to you that one of the takeaways through that, and for a lot of people was manufacturers involved in the technology and they went to a place where they were more efficient, they made the investment into their factories and technology to drive us out of it.
Derek Bannister: Even today, although we’re in a lot of our space, we’re seeing some growth. I don’t think today is any different than what we need to look back to and see what did we miss out on back then? We really haven’t evolved and to answer your question, we do need to evolve as a group or as an industry and technology is the biggest thing.
Derek Bannister:
Before we do that, I would say to you that, what we need to do differently right now has got to be training. I feel manufacturers are going away from brochures, they’re going away from pamphlets, et cetera. We need to train our people to be current in the technology space. The aftermarket companies are now going to their websites as opposed to the catalogs. They’re doing all the things to drive this cost out of their business, and we, in order to be current with the customer tomorrow, and today, we have to get trained on understanding how technology can be a benefit and a tool, positive tool for us to use.
Derek Bannister: I think every one of us has one or two old school guys in our organization that just are not wanting to adopt, they’re fighting the change but it has to happen. We’ve got to use the tools in the toolbox that we have, that are either pushed to us from manufacturers or the aftermarket companies, and it does speak to the eCommerce side of it also.
Derek Bannister: When eCommerce continues to get… The technology surrounding eCommerce continues to come to the forefront, I feel we need to be prepared for that change, because it’s going to come whether we like it or not. Whether we as a dealer step into that space, or, frankly, the OEMs. We are seeing the aftermarket companies are taking that charge because the dealers aren’t. [inaudible 00:50:38] it’s only going to be a matter of time before the OEMs continue to lead that charge.
Derek Bannister: Whether as a dealer, you step into it or not, you have to adopt it, and you have to change and you do have to get your technology, your software, your systems, your processes in place to be able to be part of that. Because if you don’t, if we’re not leading the way for ourselves, and we’re going to be in a position where we’re ready for the manufacturers, whether it be the Harleys, the BRPs the Hondas, the [inaudible 00:51:09] any of them. If we’re not in a position to help facilitate them, they’re going to leave us out. I do think as a dealer, they will leave us out because it will go back to the consumer expectation on that.
Derek Bannister: I would say to you, the other thing of what dealers should do obviously to be competitive for next year is, Brian talked about it earlier, and we also discussed that we need to look to the peripheral services outside of your organization, and we may have to go to the customer, instead of waiting for the customer to come into us. We as dealers may need to look at commercial opportunities, and move to the rural municipalities as opposed to waiting for them to send you a fax with an RFP to do that. We may have to deliver to our customers and or pick up through units and their storages and all the things that go along with it.
Derek Bannister: If we’re going to remain competitive in 2021, we have to really change our focus and change our mindset of what it’s going to look like and meet the consumer demands, because it’s changing crazy rapidly, for sure. Then really, in any business case, we got to continue to find ways of driving costs out of the business, and for us, that’s always on the topic, and on the radar. Whether you’re going from laptops to having customers or employees going remotely, outsourcing companies to manage contracts for us, operating systems. I think anytime you can drive costs out of a business, when it does turn around, you’re going to be in much better shape.
Amy: Thank you. Brian S, what is your opinion on what dealers can do right now to make a difference to their writer experience?
Brian Schumacher: Thank you. Just to springboard off of what Derek mentioned, I think one of the most important things to stay competitive in the coming future is what Derek said is, be prepared for the change. Just to recap, a lot of what I’ve said, if you are already in the eCommerce space, or if you haven’t started, you have to have a strategy. If you are already in the eCommerce space, you have to start to revisit that. Do you have a business plan, or are you just there with a website and an eCommerce site, and like Derek said, are you just waiting for it to happen, or are you going out to the market, and are you stimulating the sales, driving them to your site?
Brian Schumacher: You can’t do everything at once. Remember, when you develop that strategy, there are many areas within the dealership that can be automated into the eCommerce space. As I said, you can do right down to finance applications. But you can’t do it all at once, you need to do it in phases. Prioritize this. Look at your resources, look at your strengths, look at available business partners such as Shopify for eCommerce site platform and pick your number one number two and move through it very methodically.
Brian Schumacher: As you move through those segments of your business plan, remember always as you have always done in the past, I’m sure, do each phase as well as possible, and then know how to measure your process effectiveness for each aspect of the eCommerce space. Coming back to those metrics, learn those metrics, learn all about it. You can’t manage it, if you can’t measure it, that was said earlier today, and it’s the same adage in this.
Brian Schumacher: Set targets and monitor those performance benchmarks, make sure that you’re heading right towards those targets, and never forget to adjust your strategy and your tactics as necessary. Because believe me, things will change. Staying competitive in the future, my advice to those who are not in eCommerce right now, don’t be afraid of it, get in the game, find out where it fits best for you, and move forward. Otherwise, you’re going to be left behind. Make sure that you look towards outsource services and consultants that are available in every one of these spaces.
Brian Schumacher: The internet’s been around for a long time, eCommerce is not new. Look at Amazon, the Amazon experience has probably been enjoyed by the vast majority of the populations in North America, and it has accelerated through the roof with the pandemic. This is not new to people. If you’re not in the market, you need to join the fray, and leverage a lot of the outsource partners that are available. Lastly, make sure you open your mind and learn everything there is about eCommerce.
Amy: Thank you, and there’s always room to learn more. I will ask the same question to Brian K., what kind of advice can you give to dealers to stay competitive in ’21?
Brian Kelley: Well, I think Derek and Brian both did such a great job talking about the big things you have to focus on, the only thing I’ll add is, whenever you are entering a space, like the digital one, and you have all of your thoughts around learning how to do it, like everyone else has done it. In terms of making sure you’ve ticked the right boxes, you’ve thought about your plan, you have your strategy, you’re taking in steps, you’re not going to go overboard. The thing to remember always is there’s a reason why your customers are your customers. You’re not just another Harley dealer or a BRP dealer or whatnot, you have a unique value proposition to your customers.
Brian Kelley: There are ways to make that stand out online, just like there was 20 years ago, whenever you were competing with the dealerships just in your neighborhood. Make sure you don’t lose sight of what makes you a unique business and customers, they will find a reason to stay loyal to you. Whenever competition sometimes will be impossible, you might find that you can’t beat every part sale on price, depending on who enters that market. But they might still, in fact, they will still buy from you if you can build that loyalty by saying, no, this is my brand identity, this is where I stand apart from every other Harley Davidson dealer that you could be doing business with right now.
Brian Kelley: Don’t lose sight of what your business’s unique value prop is to your customer base, and then see how you can extend that through the digital space. It’s not just about conforming to best practice and having a plan. That’s the thing that people fail on most of the time, because it’s new, and it’s difficult not to want to just start without a process or a plan and learn as you go, and that can be very dangerous in the digital space. Because as we mentioned previously, reputation can be built and destroyed overnight in a digital space depending on where you’re looking to play.
Brian Kelley: I certainly agree with the idea around look beyond a part sale for what you can do in that digital space to define customers, returning customers and new customers. But really, we’ve all had those experiences, I think online now because Brian said there’s nothing new about selling online, where we consider it exceptional or we consider it, yeah, I liked that experience. It’s the equivalent of buying local if you’re shopping for groceries almost. You have options that take you beyond the local, but you choose to go local for different reasons. Why would a customer choose, if you’re selling the same part to the same storefront, as half your competitors out there, why are they still buying from you?
Brian Kelley: That’s not a digital solution, that’s the business solution, that’s the business problem you’ve been solving since your business has been operating. There’s a way to make that evident in every digital touch for that customer, just like you’ve always done in person. I’d say don’t lose sight of that and make sure that resonates in your digital presence.
Amy: Wonderful, and thank you for a great presentation, everyone. We appreciate all those insights. Now, we do have a couple of audience questions we’d like to address. As a reminder, if you haven’t asked your question yet, now’s the time to do so, and I will get started with the first question. I’m going to ask this to Brian K., the question is, we recently launched our online store, and as a result, we are having to maintain two sets of customers, two parts inventories and two separate fulfillment processes. What advice would you give to dealers who find themselves in this situation?
Brian Kelley: It’s short term and long term in that case. Short term is make sure you have a workaround that is efficient. You’re going to have to deal with that until you can make a change to unify your data sets, that master data management scheme I’d mentioned previously. In the short term, it’s making sure nothing falls through the cracks and doing your due diligence to make sure you understand, here are the six steps I need my team to do to make sure every customer is getting online, getting their order from their online store, and it has exactly what they wanted on it, and it’s in the time promised, and that doesn’t disrupt your in store operations.
Brian Kelley: Obviously, with any workaround, you don’t want to leave it there. You need to do that today to make sure that you don’t have those negative customer experiences, those negative outcomes. Then, as Brian mentioned previously, come up with your plan. You don’t want to move too quickly whenever it comes to unifying, but that should be the eventual goal, find that technology that’s out there… There’s several solutions out there, we’re talking about point of sale, which offer a point of sale and inventory management tool that can push and integrate with your digital storefront.
Brian Kelley: Identify, is it my in store software, or is it my eCommerce solution, or I can’t get the data to or from? Then solve for that by making a change, but definitely go into it with a plan. But if you have that experience today, I guarantee you, you have some problems you need to address. If you haven’t yet, go to your team, work out that plan and make sure that it’s running smoothly, and you’re not losing anyone right now by those negative experiences, and then build from there.
Amy: Great. Another question that just came in, will the eCommerce solutions from current website providers be sufficient, or should we look at Amazon or Shopify?
Brian Kelley: Was that for me, Amy?
Amy: Yes, if you’d like to answer that.
Brian Kelley: Sure. I think it’s a great question. That Amazon storefront is certainly attractive to a certain kind of retailer. There, it really goes to what’s your plan? If your plan is you’re only going to do PnA online, and you’re not really looking to grow, and you need something that’s pretty turnkey, but you’re going to do your own fulfillment process. You’re not looking at drop ship options, you’re not looking at a lot of the innovations you can make in the space, then Amazon is very powerful in terms of making sure your inventory is there. But your inventory is going into a marketplace that’s already diversified and competitive. So, your products that you’re selling in that space is going up against every other storefront that’s already there in that space.
Brian Kelley: I would say that, while Amazon and to some extent Shopify and Shopify and Amazon play slightly different roles, as far as technology goes. If you go into existing marketplaces, you have to be aware of how I can be competitive. If you haven’t moved at all, I’d say, wait a little longer, come up with that plan, make sure you have that unique prop, make sure you know what services you want to offer on day one, and day 100, and then build towards that and find a tech partner that’ll work through that with you.
Brian Kelley: If you don’t know the details of the technology, then find someone who can assist you, find that expertise. As Brian mentioned, there’s nothing new, don’t reinvent that wheel, don’t make the same mistakes that others have whenever it comes to implementing this, and come up with that plan and find the expertise to help you realize that plan.
Amy: I do have one more question for you, Brian. Now, can you tell me a little bit about Blackpurl, and what they offer to the power sports industry?
Brian Kelley: Sure. Blackpurl is a dealer solution that runs dealerships as far as point of sale, inventory control, unit sales service, it runs with most of your dealer operations. It’s a cloud based web application. It has a lot of the features we discussed today in terms of that data first presentation, extensibility. We’re pretty proud of it. But it is an example of the kind of technology that lets you have that future proofing. It’s constantly evolving. It’s a pure subscription, SAS solution. For those of you who know what that is… I’m sorry, I tend to talk in acronyms once I get into the tech. But, that’s what Blackpurl is, is it runs dealerships, and it has a very modern approach to how to solve for some of these problems we’ve talked about today.
Brian Kelley: If you are experiencing problems when it comes to inventory control, point of sale, getting you going in an online space, or any other area of your dealer operations, I’d recommend checking it out, it might be a good solution for you.
Amy: Wonderful. Again, I’d like to thank our presenters for a wonderful presentation today, and that’s all the time we have for questions. But if we didn’t get to answer your question, we’ll respond by email later today. If you enjoyed this webinar, and you feel it would be beneficial to someone else, we have been recording it, so everyone will get a post event email with a link to the recording. Please remember to take our survey at the end of this event so we can improve future webinars. Thanks and have a nice day.
