When the economy turns sour and every customer counts, seeing a potential buyer walk out instead of riding off on a new motorcycle really hurts a dealer’s bottom line. Of course, some dealers where this happens a lot are quick to blame the economy when the problem is something they can fix – the dealer experience. J.D.Power and Associates, those guys that survey everyone, talked to over 3000 customers in September and October to see what they thought of the dealer and how it affected their decision to buy and yesterday released the results.
Why don’t they buy?
Inability to test ride a bike.
Desired motorcycle not available at dealership
Perception of better service elsewhere
Lack of low interest financing, incentives or rebates
High maintenance costs
Though price is mentioned as a reason, customers often spend as much or more when they eventually buy than they would have for the rejected brand so it all goes back to the dealer experience.
None of this is, or should not be, news to anyone except for those dealers who treat customers poorly and wonder why they can’t sell a bike. Knowledgeable, well trained sales personnel and a dealership that can offer great service after the sale will convert many reluctant shoppers into buyers. It’s not always the economy, no matter how much each business having trouble would like to think so and in this current environment of bailouts for everyone, going back to the basics of customer service is often the most direct route to sales and business success.
J.D. Power press release follows:
A majority of new-motorcycle buyers reject a motorcycle brand because of dealer-related issues, according to the J.D. Power and Associates 2008 Motorcycle Escaped Shopper StudySM released today.
The inaugural study, which analyzes the reasons shoppers consider a particular motorcycle brand but ultimately purchase a different brand, finds that 51 percent of new-motorcycle shoppers cite dealer-related issues as a reason for rejecting a motorcycle brand. One of the primary dealer-related issues for rejecting a brand is the inability to test ride a bike, which was mentioned by one-fourth of shoppers as a reason for rejection, while 7 percent of shoppers indicate that the inability to test ride was the most influential reason for not purchasing a particular motorcycle brand. In addition, 18 percent of shoppers rejected a motorcycle because it was not available at the dealership, while the perception of being able to receive better service at another dealership is mentioned by 15 percent of shoppers as a reason for rejection.
“To avoid losing customers due to dealer-related issues, it’s important for dealers to better manage customer expectations,” said Tim Fox, research manager of the powersports practice at J.D. Power and Associates. “For example, making customers aware before they arrive at the dealership why they can or cannot test ride a particular motorcycle may help brands convert more shopper visits into sales. Since dealer-related issues can be controlled to a certain extent by dealerships and brands, focusing on meeting customer expectations in this regard can result in improved customer perception of a brand as well as lower rejection rates.”
The study also finds that price and financing are cited most often as the reason for rejecting a motorcycle brand, with 57 percent of shoppers mentioning price-related issues as a reason for rejection. Overall, price is cited by 41 percent of shoppers as a reason for rejection, and 28 percent name price as the most influential reason for rejection. Similarly, 16 percent of shoppers mention the lack of low-interest financing, rebates or other incentives as a rejection reason, while 23 percent of shoppers mention high maintenance costs.
“It is important for dealers to understand that for many of these lost sales, there was a legitimate chance of closing the sale during the shopping process,” said Fox. “Eighty-four percent of shoppers indicate they ‘seriously’ considered the brand they rejected, and 41 percent indicate they ‘very seriously’ considered the brand. While price is often a major reason for rejection, 51 percent of shoppers end up spending the same or more on the brand they purchased compared with the brand they considered but rejected.”
A vast majority of customers (81%) report having used the Internet to research motorcycles when shopping, 73 percent say they read magazine reviews, and 28 percent say they attended a trade show or motorcycle event, according to the study. Seventy-eight percent of motorcycle buyers indicated they contacted or visited a dealership for information before purchasing.
“More than three-fourths of customers report interacting with a dealership to find more information on a particular motorcycle, so manufacturers have a great opportunity to win or lose customers at this point in the shopping process,” said Fox.
The study, which also examines the impact of gas prices on motorcycle riding habits, finds that 29 percent of motorcycle riders report that they changed their driving habits during late September and early October 2008 when gas prices averaged $3.42 per gallon. Among those riders who changed their habits, 75 percent report using their motorcycle more often for commuting to work or school, and 41 percent say they use their motorcycle more often when driving around town. Additionally, 31 percent report doing less cruising, and 30 percent say they did less extended traveling.
The 2008 Motorcycle Escaped Shopper Study is based on responses from 3,022 new-motorcycle buyers. The study was fielded in September and October 2008.
Link: J.D. Power