Are You Measuring These Key Drivers in Your Inventory?

Photo © by marabuchi

Despite some great advances in the powersport industry, there are still a large number of dealers who aren’t managing their inventory correctly. Why? Well, there are several reasons.

One could be because they don’t have the technology to do
it easily (which is why investing in powersport inventory management software is such a smart idea). Being able to manage inventory, and see real-time figures of what you have in stock, can add significant savings to your bottom line. Most dealers find that they pay for the powersport office software within the first year.

Another reason might be because these dealers don’t see the need. But effective inventory management is one of the most vital tasks you need to do regularly to keep your dealership healthy and your costs under control.

So what key measurements should you be looking at?

1. Inventory Turns
You should aim for 5-6 turns per year for your inventory. This may sound like a lot to some dealers, but 6 turns per year truly is the most efficient and profitable for powersport dealers. Anything more than 6 and you’re going to start losing that efficiency because you’re ordering more often. Again, however, without a business management system it’s hard to know where you’re at with this.

2. Parts Sales Reports
Do you know what your fastest moving parts are? Do you know what hasn’t moved at all?Many dealers are unaware of this important information. But this information can help you make important, strategic decisions for your dealership. For example, you want to make sure you don’t ever run out of your fastest moving parts.

You could also make sure that your fastest moving parts are closest to the counter to improve efficiency. Time is often your enemy in the parts department; when a customer comes in looking for a part, you should have closed a sale with them within 4 minutes of them walking through the door. The faster your team can find your most popular parts, the more sales you’re likely to make. At the least, your customers will leave happy because they got in and out quickly.

3. Whole Goods Sales Reports
Most powersports dealers see their peak in early summer. This means you need to be prepared with the right amount of inventory to handle your increased business. But you don’t want too much, because over-ordering means you’re tying up valuable space in cash in your inventory.Monitoring your whole goods sales reports from past seasons can help you make informed decisions about how much inventory you’ll really need for this year’s season.

Last Word…

It’s really easy for dealers to let their inventory get out of control. But investing in quality powersport office software and closely monitoring key reports will help ensure that you’re making informed decisions that will keep your dealership healthy and strong in the years to come.

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 Do Research the Fast and Easy Way

“The more information you have, the more creative you can be”… “There’s no such thing as too much information. It leads to more ideas, more relevant ideas, more selling concepts, and a more persuasive selling message”… “You must— repeat, must—use research to stay ahead of the curve”… “For research to be outstanding, it’s got to be usable. And not just to the research people, but the entire company”… “It’s time for the marketing manager to admit that if you can’t measure it, you can’t manage it.”

These are quotes from The Little Blue Book of Advertising, by Steve Lance and Jeff Woll, former executives at advertising agencies in New York. Even if you’re not personally involved in your dealership’s advertising activities, their book is recommended reading if you’re looking for ways to increase sales and profits. (And who isn’t these days?)

What they wrote about consumer research was aimed at ad agency creative people, but it could apply to Powersports dealers, too.

Those who are now using Ideal’s Motorcycle/Powersports Dealer Management Software know firsthand how valuable it can be for consumer research purposes—but they may not be taking advantage of all of its features.

Those dealers who are not using Ideal’s software program probably have little or no knowledge of its many features that can quickly and easily provide the consumer research data they need to make intelligent decisions in regard to marketing, purchasing, turnover, pricing, repair/maintenance services, etc.

For example, let’s say you’d like to send direct mail pieces, announcing a new product demo, only to those customers who own a certain make and model of snowmobile—one they purchased from you and/or had serviced by you. By simply pressing a few keys on your computer, you can quickly create a file and produce a printout of the appropriate customers, complete with name, street address, e-mail address, and details on each customer’s snowmobile.

And let’s say you’d also like to send the announcement to those who have expressed an interest in snowmobiles, but have not purchased one from you (or, hopefully, from anyone else). If your salespeople obtained their contact information when they were in your dealership and entered it into your dealer management software program under “Snowmobile Prospects” (or whatever other heading you prefer through the use of custom fields), it would take only a few minutes to create a file on these prime prospects, too. Then you could quickly and easily send them mailings, inviting them to the demo.

Years ago, without such software, locating specific prospects and contacting them was a long, tedious and expensive process. Today, with Powersports Dealer Management Software from Ideal, it’s fast and easy!

5 Ways To Increase Sales With Your Dealer Management Software

With the economy on shaky ground rounding out 2009, every business owner across the country is trying to do two things right now: increase sales and decrease expenses.

Those two are pretty much the keystones for staying afloat in a downturn.  But, how do you do it?

It can be tempting to hire a business coach or productivity expert to help you figure it out, but you really don’t need to.   You’ve got a business expert in your store already; you just might be looking in the wrong places.

We’re talking about your dealer management software (DMS).  Surprised?  Well, you shouldn’t be.  Lots of business owners look at their DMS as something that helps them ring up customers and track costs.  A tool, and nothing more.

But your DMS system can help you transform your business, if you know how to use it.  It can help you trim costs, manage inventory, increase your sales, and improve productivity.  All of which adds money to your bottom line.

In the next few months we’re going to be focusing on how dealers can use their DMS system to thrive into the new year.  This month’s focus?  Increasing sales.

1. Increase Sales With Add Ons

Most good DMS systems are going to have an “Add On” feature that reminds your employees to upsell items upon check out.

Here’s how it works: say one of your customers buys an ATV.   If your employee forgets to mention snowplows or gun racks while they’re still out on the sales floor, your DMS system will remind them upon check out.   As soon as that employee scans the ATV tag, a small screen will pop up that lists a few closely related items they can suggest to the customer.

Utilizing the Add On feature is an easy way to increase your sales.  The only downside is that it takes time to input cross-sell items into the system.  But once you’ve told the system what products you want it to “add on” for which items, you’re done.

2. Use Your DMS To Track Lost Sales

We’ve all done this song and dance before.  A customer walks in and says, “Do you have any Arai Quantum Series helmets in stock?”  Sadly, you don’t stock Arai helmets, so the customer walks out the door empty handed.

What you don’t know is that this is the third customer this month to walk in looking for that particular type of helmet.  Because you don’t stock it, you’ve now let around $1,500 walk right out the door.  Yikes.

If you had the Lost Sales tracking feature enabled in your DMS system, however, you’d know how much money you were losing by not stocking that particular product.  And, you’d know that you need to start stocking it asap before you lose any more money.

Tracking lost sales is a great way to increase your profits, simply because it keeps you abreast of what your customers are really looking for.  And when you give them that, you make money.

3. Use Your DMS To Created Bundled Kits

Lots of businesses use this technique, and if you haven’t yet tried it in your own dealership then now’s the time to start.

Bundled kits are a great way to increase sales.  Basically, you package two or three products together to sell for a “special low price”.  Need an example?  Well, think of fast food value menus, or “dinner and a movie” packages from your local restaurant.

As a powersports dealer, you could come up with some really creative packages for your customers.  You could sell a snowmobile along with a pair of gloves and a helmet at a special low price.  Or you could do a lower-priced package of goggles, jacket, and boots.

You’re limited only by your imagination here.  The great thing about bundling products is that everyone wins: you sell more products, and your customer saves money.

Your DMS system helps by allowing you to sell the bundled kit all at once.  Your employees won’t have to ring up each item individually and then do a discount, which only opens the door for mistakes and unhappy customers.  Your DMS system can ring up a kit in one fell swoop and get your customers out the door fast.

4. Send out Specific Offers With Your DMS

Everyone has sent out “20% off” coupons before, or had “Buy One, Get One” deals.  While these work, they’re not the best way to increase sales.  Why?  Because they’re too generic.

Wouldn’t it be more effective to customize a coupon for every customer that shops in your store, based upon what they’ve bought in the past?

Sure it would.  But, it would take weeks to do it, right?

Well, not with a good DMS system.

Your DMS system can help you create a highly customized digital mailing that can really help skyrocket your sales.

For instance, if Jane Doe bought a snowmobile from you a few months ago, you could send her an email thanking her for her purchase.  You could also include an e-coupon for 20% off her first tune up, and 10% off a new pair of gloves.

Customized mailings can be done in a snap with your DMS system.  And you might be surprised at how much they can boost your sales.

5. Increase Sales By Using A Layaway Program

A few years ago it seemed as if Layaway was going to amble down the same path as the wooly mammoth.  In short, it was headed towards extinction.

In today’s economy, however, layaway programs are seeing a dramatic resurgence.  People can no longer rely on easy credit like they used to.  If they want something expensive, they now have to save up for it.

If you want to increase your sales, then you can help them do this by reviving (or starting) your layaway program.  Your DMS can be instrumental in this by tracking who has what on layaway, what they’ve paid on it, and when it’s due.  Without a system to track all this information, you layaway program can become an organizational mess.

Your DMS system is far more than a tool.  If you take advantage of everything it has to offer, it’s much more like a savvy business partner.  And in today’s economy, that just might be exactly what you need to thrive.

How Powersports Software Can Help You Save Time and Money

Photo © by Jeff Dean

The rapidly growing popularity of powersports in recent times, especially in Europe and North America, has captivated the imagination around the world. This is good news for powersports dealers who depend on this trend for business, but more business means nothing for an entrepreneur who cannot manage the workflow, which is where powersports software comes in to give your business the flexibility to expand with demand.

Since the main expenditure for a dealer in the powersports industry is manpower, if a savvy dealer can find a way to cut back on this, profit margins would grow. This is where powersports software comes into play. So what is it? And how does it help dealers manage their businesses more efficiently or assist in cost-cutting measures?

For one, it helps to reduce your manpower requirements by automating inventory controls. This translates into a more functional and efficient parts-and-warehouse management system, allowing the organization to cut down on workers that conventionally manage said systems manually.

Software also assists dealers and service centers in managing their service-and-repair departments in a more efficient manner, centralizing the system instead of depending fully on human resources to relay inter-service information. Even a simple walk across the lot is a waste of time when a simple message can be communicated with the click of a button, but what software management systems provide is FAR more complex and automated than the relaying of a message.

In return, the company can afford to hire fewer workers, which means lower expenditure and higher profits. The software helps you save time on deals and smoothes the transfer of money in transactions, allowing the dealer to focus on closing more sales.

These kinds of management systems are fairly common in the automotive world and have assisted most of the major automotive players to become the giants of the industry. Companies should expect the same from the software equivalent of the powersports vehicles industry.

Most, if not all, of the major powersports vehicles manufacturers are already utilizing such software, allowing smaller dealers to connect with them through the Internet. The ability to instantly deal with manufacturers is indispensable, saving time and money for both parties, and allowing them to keep up with the rising demand for their products and services.

For instance, one can have access to a manufacturer’s latest vehicle pricing and part numbers as they are updated, increasing the accuracy and reliability of your inventory systems. This simply wouldn’t have been possible with traditional accounting practices. The software also records other parameters such as sales invoicing, purchase orders and marketing tools, so just about every business function is automated and streamlined for your benefit.

In these uncertain economic times, it is crucial to have an edge in terms of business management and strategies, and technology is often the best way to find that edge. By utilizing the potential of powersports software, you’ll always be one step ahead of your competitors who just haven’t caught up with the time.