I’m having a really hard time with snowmobiles. Do you have any ideas for increasing profitability in the snowmobile business?
The answer this month comes from Best Operators Club member Jared Burt, owner and general manager of Rexburg Motorsports located in Rexburg, Idaho. Jared’s dealership carries all four major snowmobile lines and is located in an area with intense competition (close to Yellowstone Park). While sled sales are at the mercy of Mother Nature, you can still increase the profitability per unit sold.
Jared, you recently described a process for increasing add-on sales with snowmobiles. In fact, it was a best idea you submitted at a recent Best Operators Club meeting. It is tied to the manufacturers’ pre-season programs, right?
Yes, it is. All of the manufacturers have pre-season buying programs for snowmobiles. These programs come out in the early spring. They provide special purchase incentives for snowmobile customers.
Give us some more detail on the how the sled manufacturers’ pre-season programs work.
In the spring, the customers can select their sled for delivery the next fall. They must put down a non-refundable deposit, typically $300 to $500, on the model of their choice. In return, they receive special benefits like extended warranties and/or discounts on clothing and accessories or other incentives.
How effective has your program been? What are the benefits?
Since we initiated the program last year, we have increased our average gross profit per snowmobile by $400! The increase in customer satisfaction has also gotten us more referrals. It has attracted some new customers as well. It has been a win for all parties.
So how do you use these programs to increase your profits per sled?
Soon after the customer makes a deposit, we mail out an accessory catalog for the brand they selected. Then we mail a packet to every customer who takes advantage of the pre-season program. This packet contains four key elements:
- A personalized letter from the salesperson discussing the delivery process, pointing out the accessory catalog and describing the contents of the packet. This letter also contains a full-length picture of the salesperson, which helps reaffirm their relationship.
- A Rexburg Motorsports brochure.
- A cardboard page with a photo of the sled they selected. The photo is marked for cutout and comes with a cutout stand. It seems corny, but customers really enjoy this. We find they put this cutout on their desk at work or at home. It helps maintain their enthusiasm.
- Snow Choice options forms.
What are Snow Choice options forms?
We created the Snow Choice forms to help them make some decisions and commitments on what they want to add to the sled or their riding gear. There are five cards in the packet. Each card features a checklist for their selection.
Card one Riding Essentials: On it we list important model-specific items. We group these into three price-range packages. For example, Package A contains a spare belt, two spark plugs, and four quarts of oil. Package B has a belt, four plugs, two gallons of oil, a premium cover and a skidplate. Package C is the same except for 10 plugs, four gallons of oil and a gas can.
Card two Set Up Options: This card features a basic-level or premium set up. The premium set up asks specific questions about riding experience, riding style, etc., so we can properly tune the suspension and track set up for the individual. It also includes a full tank of gas or a $25 gas card.
Card three Customization: The customization card has a checklist for performance or appearance options they would be interested in along with check boxes for their budget level.
Card four Riding Gear Packages: This card offers a handy checklist for packages they want more information on (basic, mountain, back-country, etc.). It also has a checklist for gear brand preferences.
Card five Financing & Protection Packages: We include financing and payment solutions and vehicle protection options including pre-paid maintenance.
What happens next?
Once the customer returns the cards, our sales staff makes follow-up calls to discuss their selections from the cards. The salespeople have scripts and word-tracks that they use to encourage appointments.
What happens on the appointments?
This is where we finalize the customer’s selections, get their measurements for clothing and determine their color choices. These appointments are really important to increasing sales and customer satisfaction.
In addition, we have made a number of sales of motorcycles and ATVs to customers coming in for their Snow Choice appointments during the summer.
What if you don’t get an appointment?
If they can’t or don’t wish to come in, our sales staff does what they can to get the details necessary for the pre-orders on their selections and the snowmobile set up.
What other benefits have you noticed?
This program really speeds up the fall delivery process. We often have a lot of sleds to deliver in a short period. Having the customer make these choices early allows us to have everything in stock when they come in. It also helps us have the sleds set up properly for the individual.
What about applying this concept to other products?
There is no reason a similar program can’t be used for motorcycles or ATVs, if they are announced before they become available. You can develop your own early purchase incentives, and follow-up with a similar program to increase your add-on sales.