How to Control and Reduce Inventory in Your Most Troublesome Categories

When it comes to inventory, you know only too well how important it is to keep it under control. Inventory is a huge part of any dealership and if it’s not managed well, you can tie up valuable resources and miss key opportunities.

In today’s economy, dealers have to get savvy when it comes to controlling and reducing their inventory. Here are a few ideas to help get you started:

Service Technicians’ Time

Most dealers don’t recognize that their technicians’ time is an inventoried item just like a set of tires or a racing jacket. Your service department should be one of the most, if not the most, profitable areas of your business. This is why it’s so important to use your power sport computer software to manage your techs’ time.

A quality powersport office software package can help you manage every minute of your tech’s day to ensure that they’re constantly working on billable projects and earning your dealership money.

Reducing Inventories in Parts and Whole Goods

One of the best ways you can reduce your inventory is through parts returns.

Your parts department can grow as if it has a life of its own. And if you don’t stay on top of your inventory here, you’ll eventually wind up with boxes full of obsolete parts. These parts are tying up your money, and your space.

Most manufacturers encourage dealers to return at least 10% of their stock every year. They plan on this kind of “take back”. On the average, however, manufacturers only see around a 2% return. This is because most dealers don’t take advantage of parts returns.

Make sure your parts manager stays on top of which parts aren’t selling, so they can be returned to the manufacturer to free up cash. This is another area where quality power sport office management software can really save you time and money.

You can also save significantly be reducing the number of lines you carry. You don’t need three after-market companies. If you’re going to handle after-market parts, you don’t have to buy from all three. Pick one and become a partner. This goes for whole goods as well.

You can help keep your inventory down by creating a stocking policy. For instance, when a customer comes in looking for a part some dealers will order one for that customer, and then another for themselves “for next time”. But this mindset is a quick way to inflate your inventory and waste cash you could be spending elsewhere.

Writing out a good stocking policy will help ensure that everyone on your team knows the rules about stocking, and how much should be ordered at a time. This will help save you cash and space in your parts department.

Last Word…

Dealers who know how to effectively manage their inventory will survive and thrive in any economy. By using quality powersport office management software and implementing these strategies you’ll be well on your way to reducing and controlling this vital area of your business.

Is Your Dealership Changing With the Times?

In today’s economy, customers have gone from a “buy new” mindset to “buy used” or “fix what I’ve got”. People are cutting back and extending the life of products they’ve already purchased.

Many Powersports dealers might see this as a death-knell for their business. But, this is only if you don’t adopt your business to the changing times. Dealers who are willing to change their priorities and business model will continue to see profitability and growth in this evolving economy.

So what needs to happen to make sure your dealership thrives?

1.   Emphasize Your Service Department

Customers are fixing what they have, which means you need to be putting your advertising dollars to work for your service department, not your whole goods.

Does your shop need new tools? Does it need a bigger workspace? This is the area that’s going to make your dealership profitable, so make sure you’re giving it the resources it needs to succeed.

It also will pay off to hire the best. If your service team is fast, professional and accurate your customers are going to keep coming back.

2. Stay on Top of the Numbers

Your powersport office software can give you, in a couple of clicks, real-time numbers on your profitability. This can allow you to make adjustments based on immediate data.What should you be looking at?

Well, since your service department is so important start there. You need to strive for 80% efficiency in your shop. This means your techs need to be spending 80% of their time on billable work.

For your parts department, you want to look at turns. You need to shoot for 4-5 turns per year on parts. And you should also shoot for 40%-45% profit on OEM parts.

3. Have the Right Processes in Place

Experts often say that business is about three things: people, profits and processes. Often, owners spend a great deal of time focusing on the first two, but they ignore the third.If you want your powersports dealership to survive in this new economy, then you must have the right processes in place to ensure speed and efficiency. This goes for your whole goods department, your parts department, and your service department.

4. Create Packages

If your dealership doesn’t have any packages set up, then you need to create some. Packages are a great way to give customers a great value while still getting to spend more in your shop.For instance, if customers bring in a bike for new tires, then offer them an oil change at a reduced rate.

You can tie packages in with seasons to create maximum impact and awareness. Fall winterizations and spring tune ups work especially well for this.

Last Word…

Just because the economy is fluctuating right now doesn’t mean your dealership is doomed. It’s up to you to change and be flexible. Investing in quality powersport office software that allows you to stay on top of key metrics, emphasizing your service department and creating packages are all smart moves for your business.

How to Use Your Service Department as a Marketing Tool

As a Powersports dealer you have a unique opportunity to market to your customers. And it’s sitting right there in your dealership. What is it?

We’re talking about your service department. Most Powersports dealers don’t look at their service department from a marketing standpoint. But this part of your dealership is a great way to establish an ongoing, positive relationship with your customers.

Think about it: you sell equipment to a customer one time. But you may service that equipment 10 times or more during its lifetime. So shouldn’t your service department be set up to constantly impress these customers that are continually coming back?

Of course it should.

So how do you do it?

1. Keep Your Promises
Does your dealership have certain promises or standards it makes to every customer? This could be that no customer waits in line more than two minutes, everyone is greeted by name, etc. Whatever standards your sales staff has to live up to on the sales floor, make sure those same standards are being upheld in your service department.

Make sure there is at least one computer installed in the service department with your Powersport office software. This way team members can look up customer names, order histories, part orders, etc. and provide the same quality service that your sales staff does.

2. Admit Your Mistakes
Occasionally, balls will get dropped in your service department. Parts go missing, service orders take two weeks instead of one…it happens to everyone.

What’s important is that your team admit to the customer when they’ve made a mistake or had a delay. Instead of pointing fingers or placing blame on another distributer (or team member, for that matter), have them take responsibility for what happened. Make sure they know to apologize sincerely for the delay, and do whatever it takes to make that customer happy again.

3. Give Your Team Training
Your techs and mechanics should have the same access to customer service training that your sales reps do. They need to become experts in the art of customer service. The better service your techs and mechanics provide to your customers, the more your reputation is going to spread. People will go out of their way to get their equipment serviced by your team if they know they’re going to get great service and top-notch treatment.

4. Teach Your Team to Upsell
Do your mechanics get any sales training?

Well if they don’t, they should. Think about this: imagine a customer brings in a bike for an oil change. Your tech notices their wheels are getting a bit thin. There’s a chance for them to make a sale right there.

Again, make sure your service department team gets the same training your sales team does. It could make a huge difference to your bottom line.

Last Word…
Many dealers don’t think about their service department when it comes to sales and customer service. But your team here is in a unique position to deal with your repeat customers on a regular basis. Making sure they have adequate training and that they know the standards you’re expecting can really pay off in the long run.

How to Use Customer Service as a Marketing Tool

How would you rate your dealership’s customer service? Five out of ten? Eight out of ten?

Many dealers would swear their customer service is top-notch. But ask your customers what they think, and you might get some surprising answers that you’re not too happy with.

It’s all too easy for owners, and employees, to let customer service slide at times. But poor customer service can do more harm to your business than a new Home Depot opening up a mile down the road. Dealers must provide excellent customer service if they want to compete today.

The problem is that many times, employees don’t know what “excellent customer service” really means. Which is why setting standards for your business will not only raise the level of service, but will help market your business through word of mouth.

Strategy #1: Create a Powerful 8-Word Statement that Defines Your Dealership

Does your dealership have a slogan that powerfully defines your mission and promise to your customers?

If not, then you need to create one as part of your marketing efforts. This 8-word statement needs to define what’s at the heart of your dealership. It needs to tell your customers why you’re unique.

Think of this statement as your dealership’s “brand”. It needs to tell people why your customer service is better than every other dealer’s customer service, and what you’re going to do for them.

It can be challenging to pack that into an 8-word statement. If you’re having trouble, then enlist your employees to help. You might be astonished at the clever slogans they can come up with to brand your business.

Photo © by Infusionsoft

Strategy #2: Establish Standards to Help Market Your Dealership

Does your dealership have standards for customer service?

Surprisingly, many don’t. But customer service standards set the tone for your store; they’re a promise to your customers that you’re going to take care of them and if you fail, they get compensated in return.

For instance, one Midwestern dealership makes the following promises to all their customers:

• Customers will not wait in line more than 5 minutes for a part.
• Customers will not wait on hold more than 2 minutes.
• Customers will always be greeted by name during checkout.

This is just a small sample of the standards they set in their store.  If anyone, from the owner to the employees, fail to uphold these standards then that customer get a free oil change next time they bring their equipment in for repair.

The biggest advantage to defining standards is that it helps employees see clearly what’s expected of them. Nothing is left “unsaid” or vague.

So how can you do all this? Well, good OPE inventory management software can make a dramatic difference in your dealership’s customer service. OPE software can help your team find parts quickly, check the status on parts or repairs, check on back orders, and allow you to easily look up customers to greet them by name.

This speedy, personalized service can help your team uphold the standards you’re setting.

Last Word…

Excellent customer service gets results. Taking actions like having a clear statement about your business and creating standards will help define your dealership and give your team clear directives to shoot for.