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Business Management

Nothing Wrong With A Little Egg On Your Face

You’ve gotta make some mistakes to make it —just ask Rod!

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In the movie The Spirit, the villain played by Samuel Jackson hollers that he wants no egg on his face! I’ve never met anyone who does want egg on their face, yet I’ve also never seen anyone achieve greatness at any level, in any sport, business or other endeavor without inevitably at some point facing some sort of embarrassment, humiliation or downright failure. I don’t know who said it first, but I genuinely believe we do learn more from our failures than our successes. However, you can’t fail if you don’t first try.

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Last month I talked about being resourceful. Gaining knowledge is important but there is only one way to convert that knowledge into skill, and that requires taking action. Nothing happens until something moves!

“I’ve been in this business for well over 30 years, Rod, and I’ve made some voluntary changes to our business strategies during that time, but this year in particular we’ve been required to change,” confided a dealer. Many of the strategies he mentioned to me were very astute and could only be learned through the action and wisdom gained over so many years in the business.

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However, many of the recent aggressive changes he’s made have been in response to his resourcefulness. He reads books, trade magazines and is involved in 20-groups where he networks with other like-minded dealers. He then commits his implementation to writing, takes massive action, and isn’t afraid of a little egg on his face. Here are just a few of the changes he’s made this year that I took note of in our call.

He has completely transformed his marketing plan to incorporate more direct-response-quantifiable advertising. After realizing nearly 80 percent of his leads were coming from the Internet, he brought in a full-time Internet manager. He now has a live eBay store, mail order business, lead generation and lead management system, as well as a clear online marketing strategy for both new and pre-owned bikes.

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He found that the used bike market had changed and the demand for used vehicles was up significantly. He then began going to the auction and purchasing bikes, and has seen significant improvements in his pre-owned numbers.

He’s taken major steps to reduce his new unit inventory with spiffs, dealer trades and salesperson contests. He then negotiated a deal with a large insurance company to have exclusive rights to wreck jobs in his entire major metro market. This has created a major shot in the arm for his parts and service business.

He replaced a long-time parts manager who wasn’t willing to embrace the changes he was implementing with a new enthusiastic sales and technology oriented individual. I could go on and on, but during this call there were three qualities I noticed in this dealer that I’ve identified as commonalities among most successful dealers:

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1. He gains knowledge through his resourcefulness
2. He takes action
3. He isn’t afraid to make a mistake

Let’s explore this knowledge-versus-skill subject a little further. There are two different learning methods, passive and active, and both are very beneficial. However, both have pros and cons, and one without the other can be unfavorable.

Passive learning methods such as reading are great because of the wealth of quality information available, however these methods have a far lower retention level than active learning. While active learning has much greater retention than passive learning, it also has much greater consequences. Here’s where it gets tricky: The knowledge required to take the appropriate action is in most cases gained through passive learning. Retaining 50 percent of the right way of doing something is better than retaining 100 percent of the wrong way.

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For example, a finance manager who attends a professional one-day training class (passive learning) only retains 50 percent of what he learns could still easily earn $300 per unit sold in F&I.

On the other side of town, the finance manager receives no training at all and eventually after facing rejection too many times, decides it’s not worth the pain gives up and doesn’t even offer F&I products any more. Sure he took action, but because it was the wrong type of action, he could never recover and therefore cost himself and the dealer big money.

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The sad truth is most dealers aren’t resourceful and therefore continue to do business the same way they always have. There are some dealers who will tell me they don’t need training and education to improve their business for the better because they’ve been in business for 15 years. Although they’ve taken action and worked very hard year in and year out, due to a lack of resourcefulness, they really just have one year experience they’re repeated 15 times.

Some resourceful dealers with lots of knowledge and good ideas have let the current market conditions cause them to be overly cautious, timid and flat out unwilling to take any action at all. This is an equally sad situation.

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On more than one occasion I’ve let the ready, fire, aim approach splatter egg on my face, but I’m just gonna pull a tear off and keep on going!

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