NEWSLETTER

Issue No. 18 | August, 2013

Thanks for all the great info you shared with dealers and others in the Garage Testimonials industry at the latest Pulse webinar. Plus, Patrick Bridgford, who is a real fan of yours, recommended my reading your newsletters from May and June, which I proceeded to do before the webinar. I denitely see why he feels that way. They are lled with gems! My position as a client specialist @ Cycletrader.com allows me to work very closely with dealers throughout the nation. I actually have a rep in a southwest state who has an owner who struggles with his sales department so I sent her the link to Julys webinar. Thanks for your time. I hope they include you in upcoming Pulse webinars! Barbara Moore, Cycletrader.com

Sam Dantzler

Thanks for the training the last 2 days. Speed Shop guys were on re when we got back, sold 4 yesterday to nish the month strong, the whole shop was up almost $250k over last year. I met with all the guys the following morning on how to implement what they learned... Great stu as always bro. Jim McLaughlin General

Manager, Marin Speed Shop

As always, please continue to give us feedback on the website and suggestions for training topics we can address: sam@samspowersportsgarage.com

Cultural Discounting
So I just came back from California where I was hit with an interesting question during one of my trainings. A student (and very enthusiastic employee) asked, When did the idea of asking for discounts become cultural in our society? One of two answers came to me immediately, but I held them back as I truly absorbed the question. You see, a major problem with the question is that its grounded on an absolute belief that discounting HAS become cultural. It hasnt. Years ago, the massive inux of big box retailers fueled a do-it-yourself shopping experience and customers began to focus more on pricing than the experience they were getting in that big box. It isnt as if the Powersports industry made a conscience decision to move away from value-based selling and said, OK, lets all just sell on low margins now and hope for higher volume like the big box stores. No, quite the contrary. Retailers (and employees) got lazy, mirroring the big box strategies, therefore elding questions about products and reactively clerking the customers coming through the door. The culture of discounting in a store ISNT cultural... but, it can BECOME cultural through your sta , your training, and your show. With so little of the industry actually training people on how to proactively sell the customers and with customers accustomed to price shopping from their Best Buy and Walmart experiences, it becomes easier to just drop process and move product. Lets face it, its easy to move product when you can simply undercut the price of your competitor. You can prove that theory this weekend by running a halfprice tire sale, and watch the ood of customers to your store. But transactions dont necessarily translate to prots, so you need to know who you are as a retailer.

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In retailing, there are many di erent strategies: JoS. A. Bank clothing stores want you to pay a premium on the 1st item purchased, with a substantial discount on the 2nd and 3rd. They can o er the discount because theyve recovered their cost to bring the customer in the store with the rst item. Kohls focuses on buying obsolete inventory (12 months old or older) from its wholesalers at pennies on the dollar, then advertising 50-60% o of previous retail pricing. Walmart is all about very low margins, but cant survive without very high turning of inventory. Then, of course, you have the king of value-based retailing, Nordstroms. Nordstroms focuses on higher margins, higher prices, and lower turns (relative to Walmart) of inventory.

The fact of the matter is, every one of these retail strategies work, AND each of the stores are committed to only ONE of them. They dont simply post a price, then adjust it based on their customers reactions. You cant post a premium price without giving a premium experience and expect to hold margins. You also cant work with current, fresh inventory and expect to survive with a culture of discounting. Who are you? What is your identity? Pick one, and stick with it. The rest of this article assumes that you want to run at higher margins without from the cu discounting. After all, it involves considerably fewer transactions, and its a lot more fun. Since the economy tanked, home improvement stores have been doing quite well. But certain stores do better than others. Lets look at Home Depot vs. Ace Hardware. Did you know that the margins at Ace Hardware are considerably higher than those at Home Depot? Youre paying for the individual attention you get when you walk into an Ace Hardware. At Home Depot youre lucky to nd anyone available to even ask a question to. And in recent years, the employee simply may not know the answers to your questions.

I Gotta Guy!
The reality is that we Americans are exhausted with big box retailing, and have resorted back to a 1930s way of doing business. Its about having a dedicated person in that industry who treats you like a king/queen. I call it the I Gotta Guy syndrome. If I moved into your town, do you have a realtor you could hook me up with? If the answer is yes, then (relative to real estate), youve gotta guy! How about a plumber? How about someone to add a bedroom on to my house? You see, most of us have a guy in certain aspects of our life. How about in ...continued p. 3

What We Learned
Adapt. It simply isnt convenient, cost-e ective, or sustainable to expect dealers to have me come in-

house with great regularity. We had to nd an alternate way to train people, so we created The Garage. Often times Im told by dealers how they dont need to do that crap as theyve been in business for 30 years. How is the business now anything like it was 30 years ago? Are you still thinking old-school? It will continue to get easier for customers to nd products online, without the need to go into a brick and mortar store. But people arent going into your store for a need. Its WANT, and a burning desire to connect with others in our industry. For that reason, I believe there will never be a shortage of people in our industry who need to be trained on how to create experiences, turning lookers into buyers. We will continue to rene and adapt The Garage, learning from you and being open to new ways of doing the same old thing. We hope you are too.

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the Powersports industry? Are you someones I Gotta Guy in this industry? Are you the rst person they think of when any conversation comes up about motorcycles?

are to be used AFTER the full show has been given, and as a last resort to actually discounting the fresh, current inventory.

Rebate Program Are you worth it?

When I hear that a dealer lost a deal because the guy down the road was $500 cheaper, Im reminded of a 1980s Lemco Letter where Uncle Ed penned a column titled, So Youve Got a Discounter? Newsash! EVERYONE has a discounter nearby, but EVERYONE isnt losing deals to that discounter for ll in the blank dollar amounts. The fact of the matter is, your customer can get that product (Arai XD helmet, Sportster, Vance & Hines exhaust) at hundreds of places in the country, including online. The ONLY thing that separates you from the other places out there is YOU! So I ask again, are you worth it? No, you didnt lose the deal because of the discount. You lost it because the customer doesnt think your sales/service (aka show) is worth his extra hard-earned income. Did that hurt? It was meant to. Let me demonstrate with an everyday example. 90% of Americans nance these toys, so if you lost the deal for $500 to the guy down the road, that $500 is less than $10/month (based on a 5-year loan). You lost the sale because your show isnt worth $10/month. And if you cant honestly tell your boss that your show is worth $10/month, then you are in the wrong business. Rebate programs are everywhere, as they are a much better option than discounting for your customers. Hotels, airlines, and even frozen yogurt stores are getting in on the action. Spend money today and earn freebies to come back to use later. Rebate programs trump discounts for 3 major reasons. 1) A 10% discount on a $100 item is 10 real dollars that you didnt recognize today. With a 10% rebate instead, you recognize todays extra $10, and give the customer $6 Monopoly money (assumes a $10 coupon and a 40% margin in your store) to use later. 2) To get that customer back in the store where the discount program doesnt encourage repeat business. 3) Most people will come in and up-sell themselves, knowing the rst $10 is on the house. The math actually works out such that a 20% rebate costs the dealership less than a 10% discount. More importantly, its much cooler to carry the motorcycle dealerships card in my wallet over that of the local FroYo yogurt store!

Price of Admission
When adding up advertising, payroll, and direct expenses, the average dealer in the country is paying between $100$200 for every customer just to walk through their door. If you were going to go out and spend $100-$200 on dinner, what are your expectations of that dinner? Better be damn good, right? So the dealer principal has paid the price of admission for the customer to see your damn good show. Not your mediocre, question answering, semi-present, how can I help you show. That show sucks. That show is in reruns on Nickelodeon. Can you actually verbalize your damn good show to the tune of a $200 price of admission? If not, youve got work to do. When I do training and speaking engagements, Ive always called them Enter-trainment, 51% content and 49% entertainment. The content is out there in other places, but the manner of delivery is all mine. Its my damn good show that I dont discount. How about you? Yes, there are times that you can give the most amazing show/experience in the world, and people will still ask for a discount. Then what? First o , recognize that this is in the minority of situations, as most will graciously pay retail if the show is worth it. However, there are two fundamental strategies that should be used to overcome this. Remember, these

Have a Discount or Clearance Area

This strategy works well to direct the customer to products that need to go away, and AWAY from the inventory that you dont want to discount. The idea is never to discount your fresh inventory, but have ample alternatives to refer customers to who may be looking for a deal. Oh youre looking for a smoking deal? Well, let me show you these jackets, then. This is the best deal in the dealership! The customers ego will not let him buy the cheaper one at the discount as opposed to the one he really wants at retail. Years ago, I went white water rafting down the Chattooga ...continued p. 4

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River in North Carolina. We were coming up to 5 Class V rapids in a row, at the end of our 6 hour trip. The chick next to me asked the guide, What should I do if I fall out of the boat in there. The guide looked at her and said simply, Well, just dont do that. It was good advice. At the end of the day, the best way to overcome a customer asking for a discount is to not have a customer ask for a discount. Create such a relationship with the customer that asking for a discount would be embarrassing or outlandish based on the experience they just received. The better the experience, the less chance a discount conversation will ever come up. Embracing the notion that you sell an escape and NOT a tangible good refocuses conversations on people, not things.

FAQs...
Question:
I (one of my employees) have failed the test twice and cannot get a Certicate of Completion. Can you reset the test so I (my employee) can take it again?

Answer:

Sam Dantzler

Um, NO. You may move onto the next course but you will not receive a Certicate of Completion for any course you did not pass the test in. If we reset tests all the time, what would even be the point of the test anyway? Nobody wins if we do that. We believe strongly that how an employee scores on the exams clearly displays to their Manager that persons attitude about taking the training (because his/her Manager told him/her too, or because it might improve their skills and that seems worthwhile). No resets for you.

Visit us online:

samspowersportsgarage.com

Wheres the Sam Show?

AUGUST 2013 4-7 Atlanta, GA 12-13 Denver, CO 19-21 Denver, CO 28-30 Roswell, NM SEPTEMBER 2013 6 St. Petersburg, FL 24-25 Nashville, TN 30-Oct. 1 Dallas, TX OCTOBER 2013 7-8 Las Vegas, NV 14-15 Birmingham, AL 16 Orlando, FL 28-29 Las Vegas, NV

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