Lessons Learned

In recent days I’ve heard an excessive media buzz regarding “the recession is officially over” and “recovery” has begun.  This “escape from the recession” and “recovery in 2010” message is one that has been grossly exaggerated. Speaking of exaggerated, I was one of the fortunate dealers who owned and operated multi-stores during the boom years, and it wasn’t always peaches and cream back then, as the picture is now often painted.

We certainly had our fair share of challenges during those thriving times as well. Challenges ranging from aggressive OEM programs which lead to excessive inventory levels which created extreme price cutting from competitors, and of course the ever popular “whore it out discounters” across state-lines model.  All of which formed significant troubles in holding adequate margins.  We regularly dealt with Sales Managers who couldn’t implement a traffic log and follow up with unsold customers to save their life. Sales person turnover was always a pain, and just as they had been trained up; of course. We had Parts Managers who didn’t control OBS inventory and Office Managers who conveniently happen to get sick every time the floor checker showed up. We of course, had primadonna technicians whining every time the wind blew a different direction. We had to watch warranty, co-op claims, and other receivables like a hawk so thousands of dollars weren’t squandered. And yes we still had that small percentage of  pesky un-reasonable customers that suck loads of time, and are impossible to satisfy. Oh yeah, and I can’t forget (no matter how hard I try) how cash flow would get tighter than Dicks hat band in the off season. Ahhh, the good ole days…

Although the opportunity of the Boom Times was significant, there were still very few dealers stock piling cash under the mattress in their off shore yacht, as is evident by the industries recent loss of thousands of franchised dealers. The fact is, retail is Damn tough in good times and bad, thus exploiting the need to be on a mission for continual improvement, regardless of the market.  Certainly more waste and sloppiness could be afforded during the strong economy and now to successfully transition into the New Emerging Economy will require much less squander and much more precision. More on that in a minute…

Recently I’ve been following a brilliant economist, trend spotter, and New York Times bestselling author Harry Dent Jr., to get his take on the financial forecast for the months and years ahead.  My impression of what I’ve studied so far is that Easy Street is closed for repairs indefinitely and picking up the right detours will be jugular in reaching your desired final destination.  I’m not trying to throw and wet blanket on the New Year, far from it, as the basis of Dent’s “How to Prosper in a Downturn” philosophy is that by understanding the fundamental trends that drive our economy can lead to much leverage, success, and financial gain in the coming months and years.

Now, let’s go back to the less waste and more precision point earlier mentioned. I often refer to this waste as “Hidden Marketing Assets”. These are assets that are already being paid for yet often underutilized, such as your Employees, Facility Merchandising, DMS System, Customer Data-Base, Telephone Utilization, CRM, Web-Site, etc. There’s a still lot of meat left on those bones.

Additional waste often comes in the form of negligent advertising and marketing decisions.  Old marketing tactics such as TV, Radio, and Newspaper must be replaced with more precision by a direct to your specific target audience approach. Although it’s been repeatedly proven that it costs 14 times more to get a new customer than to get a past or present customer into the door, the “gotta get new fresh customers” mindset is still prevalent in most dealers.

I recently had a client contact me who participated in our “12 Days of Christmas” marketing campaign to tell me of a letter he had received from a previous customer. Unfortunately, she notified the dealer to remove her from their mailing list as her husband had been killed on the bike which was purchased from the dealer back in 1999. As I began to console this Dealer that at times in our business, we do have to face these types of unfortunate circumstances he stopped me.

“No Rod, do you know what this means? It means that I’ve gone 10 years without ever reaching out to my past and present customers. For 10 years I’ve been spending hundreds of thousands of dollars looking for new customers while ignoring those who have been most loyal to me and are most likely to come back and spend more!”

This was a very keen observation by my client, who by the way is very much now focused on precision with his 2010 marketing plan.

Whether the media and politicians choose to say the recession is over and recovery has begun, or we’re now facing the double dipper is not as relevant to prosperity moving forward as your ability to deliberately and actively invest in strengthening your skills. Specifically the skills of cutting waste and increasing precision can act as GPS around Easy Street.

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