Tag Archive | "Powersports"

Anatomy of a Powersports Agent


There was a time when many a general agent, flush with business in a booming economy, tried expanding into the powersports market. It would seem to be a natural transition. Both businesses sell vehicles, both sell financing, and both have the potential to sell “product.” With such similarities, why have so many automotive general agents failed at making the transition to powersports?

Perhaps a second look at what it takes to be a successful powersports agent can be even more important when the economy is at the bottom. If we can break the code now and develop a solid foundation in powersports when times are tough, what will it mean for our agency when things start rocking again?

First, let’s define powersports. Powersports consists of motorcycles, all-terrain vehicles, personal watercraft, snow machines, and portable generators. There are sub categories within each, like scooters under motorcycles. An ATV could be a 4-wheeler or the newer category of side-by-side buggies popular on farms and for hunting. Personal watercraft run the gamut from jet skis, which must be balanced like a motorcycle, to personal watercraft like Wave Runners that don’t tip over when you sit on them, to small twin-engine jet boats that can pull a water skier.

It is difficult to pigeonhole the demographics of a powersports buyer. As can be seen from the description above, just for the motorcycle category, age can run from a 7-year-old youth buying their first mini dirt bike for a little over one thousand dollars, all the way up to a retired person wanting to buy a fully equipped touring motorcycle costing tens of thousands of dollars.

One very unique aspect of the powersports buyer is that in almost every case, the vehicle is a “want” and not a “need.” Nobody needs a 150 horsepower personal watercraft than can do 75 mph, but I know a bunch of people who want one, myself included! This is drastically different than the primary purpose of buying a car: personal transportation to get to work and run errands.

Understanding the type of person that is the typical powersports dealer and the type of people that manage motorcycle dealerships is the first step in breaking the code. They are usually not buttoned-up suit and tie kind of people like many agents. They are enthusiasts first and foremost. There is a good chance when you visit a store and things are slow that the crew will be out back racing 4-wheelers rather than waiting around for the lay down bus like you are apt to find at a car dealership.

Showing up at a powersports dealership on your way from one auto dealership to another because it is on the way is how most agents think of expanding into powersports. The aforementioned suit and tie and the Rolex might not appeal to the powersports GM who has the job because he loves motorcycles. How many GM’s do you know in car dealerships who have the job because they love cars? Think about that.

A better option may be to first identify the powersports dealerships in your area of operation. Then, pick one day per week and dedicate it to powersports. Starting with your wardrobe, skip the tie and try to be more casual. It’s OK to roll up your sleeves and show those tattoos – in fact, it may even help! If you own a motorcycle, it wouldn’t hurt to ride it to the store occasionally so they know you ride and you’re not just a poser. You will be seen as a fellow enthusiast.

Being considered a part of the motorcycle community, rather than a “car guy” trying to fit the automotive square peg into the powersports round hole, will go a long way towards acceptance by the powersports operators. If you give the impression that the powersports business is just like the auto business except 10 years behind (even if it is from an F&I perspective), you will probably fail.

Another recipe for failure would be to not recognize the fundamental differences of the powersports dealership and how it operates. Applying the proven automotive solutions that we are familiar with may not be the best approach. Here are a few examples of the differences and suggestions that may help the prospective powersports agent crack the code:

  • A lot of powersports customers pay cash for their toys. In the absence of a financial arrangement, traditional paper F&I products like GAP are not eligible. Your agency must find non-traditional products you can offer the dealer, products that may not have gained traction in auto dealerships for any number of reasons. One example is a GPS theft recovery device coupled with a paper product guaranteeing a payout if the vehicle is stolen and not recovered. A theft recovery product to the cash or finance buyer is elegant for a number of reasons: it is a “hard add” and powersports dealerships are accustomed to offering and installing hard adds at the point of sale (exhaust systems, saddle and tank bags, helmets, etc…); the guarantee is much like an etch product and is familiar to general agents – teaching an F&I manager how to succeed with this type of product is right in our wheelhouse; by bundling the two, you would be providing a neat solution for the powersports buyer that typically does not carry full coverage insurance.
    Instead of a total loss and no insurance to apply for a claim, we’re getting the customer’s property back because the vehicle can be located and recovered by the authorities. If the vehicle is not recovered, the customer has a nice down payment for a replacement.
  • Factory finance programs are often revolving accounts with teaser rates, not installment loans. For this reason, full coverage insurance is not required to take delivery and loans are approved for a dollar amount based on customer qualifications, not an advance based on invoice. The approvals range from the expected short calls for first-time buyers to significantly more than what is needed to buy the vehicle for a buyer with established credit. For the first-time buyer, opportunity exists for the development agent to train dealership personnel on how to switch to a lower priced new vehicle or a used vehicle and still make a sale. For the well qualified buyer, your goal should be to teach the sales staff to blend both hard and soft adds and offer them to every buyer.
  • Many powersports dealerships do not have a dedicated F&I department or personnel, and some dealers fear that offering finance products can somehow jeopardize a sale. We know that F&I development can easily add at least $300 per vehicle (especially if we are starting from $0), so it is our job to convince the powersports dealer that an F&I department, properly trained, will not only solidify his deals but contribute significantly to his bottom line. If for some reason the idea of an F&I department or dedicated F&I personnel is still met with resistance, why not train the sales personnel or sales managers to offer products in conjunction with financing? In other words, be aware that working within the powersports sales process rather than insisting on installing a clone of what works in the auto business might be just the ticket to gain the dealer’s confidence. Once the dealer sees that your processes do not cost sales and actually enhance his business, he will be more likely to consider wholesale changes.

Right now, powersports dealerships are struggling in a down economy and buyers are carefully weighing the “want” or “need” proposition. Visit some powersports dealerships and you will find that right now is a great time to talk to the operators about increasing profitability and sales. You will find them receptive to your ideas, as long as you keep in mind the subtle differences that exist and try not to fit a square automotive peg into a round powersports hole.

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Should Your Agency Diversify into the Powersports Niche?


Whenever a new product is introduced to an independent agent, they ask themselves, “Should I take this product to my dealers?” An example of such a decision occurred when the “Combination Package” was introduced by several ancillary product companies recently. The combination package is a mixture of Tire and Wheel, Dent and Ding, Windshield Repair, and Key Fob Replacement. Sometimes these new product offerings become a staple in the F&I office, like the Tire and Wheel product has; other times they just fade away only to be replaced by the next new product.

An agency may take the new opportunity to their dealer for a variety of reasons:

  • The dealer expects them to bring exciting new profit ideas.
  • To diversify product/income opportunities for the dealership & agency.

An agents decision to promote the new product is really a decision to “break the paradigm” of the status quo and change the way the agency does business. This can sometimes be subtle but many times it requires a significant shift in agency practices. Introducing a new product may dilute existing product offerings or cause the agency bad will with the dealer if it isn’t successful or the company doesn’t follow through with such promises as paying claims efficiently.

Breaking the paradigm is necessary for the proactive independent agent if they want to lead people in a new direction but is something few can do because as much as we say we want change, it is natural to resist it.
In addition to breaking the paradigm by bringing a new product to a dealer, an agent may also diversify into another related business. The skills that an independent agent has in consulting the dealership with their F&I Department for Automotive dealers can be effectively transferred to the F&I Department for the Power Sports dealership but his/her approach needs to be different.

How does an Independent Agent break the paradigm and diversify into PowerSports?

Just as there are many similarities between Automobile and Powersports dealerships, there are also many differences. Their similarities provide for the appearance that an independent agent can easily transition from automobile F&I into Powersports F&I. This appearance has led several agents to try their hand at Powersports, all to often returning to their comfort zone because they were unsuccessful. If you take the exact same approach that you do in Automotive and try to duplicate it in Powersports, you’re almost certain to fail. To provide you success with Powersports dealers I suggest you take the “Best Practices” that have made you successful in the Automotive sector and tailor them to the Powersports sector.

I have heard many people in the both industries say the Powersport’s industry is 10 years behind the automotive industry when it comes to Sales and F&I but that’s not really the case. They are just very different industries. One difference is that the PowerSports industry is filled with enthusiasts who are both selling and purchasing the product. Another difference is it is more difficult to get the customer financed because there are less lending options available. Powersports customers are also more likely to pay cash for their purchase.
In the end, both industries need a front-end sales and an F&I sales process which results in providing the customer various options and products to choose from.

Which dealers should you focus on?

Under most circumstances, when calling on an automotive dealer, you know if you sign the business you’re going to get paid. This does not necessarily hold true when you sign a Powersports dealer. When calling on Powersports dealerships you must qualify the dealer just to evaluate their income potential. These are the dealers that have the potential to be the most profitable accounts. They are low maintenance and often aren’t being serviced by their existing agents. These dealers most likely aren’t realizing their true income potential.

  • Focus on Medium to Large Dealers: Medium to large dealerships typically sell more units and often employ an F&I Manager which usually translates into more product sales. How do you know which dealers these are? You could scan the dealership to see how many units are on the lot and in the showroom but this may not reveal the entire story. Powerports Business Magazine is a great resource for this kind of information. They produce a market data book annually that lists most dealerships annual revenue and publishes whether or not they have an F&I Department.
  • Focus on Dealers that have an F&I Manager: We have learned that automotive dealerships having a dedicated F&I Department translate to the highest profitability. Powersports dealers aren’t any different. If an F&I Manager is employed, it is usually worth your while to pursue the account. Unfortunately, many powersports dealers haven’t made the transition to a dedicated F&I Manager. So, the only way you’ll know is to go in and talk to the people who work there. You may just find that dealer who isn’t reaching their true potential.
  • Focus on Dealers that will install process tools like Menu and Reporting software which will increase the chances they sell F&I products. If a dealer is willing to install an F&I selling system that promotes product sales, you can be moderately successful even if only the salesforce is selling the F&I products. I suggest you offer a turnkey system to the dealership that includes an electronic menu system to ensure products are offered 100% of the time and a reporting system to hold them accountable to the set goals and desired results. If the dealer isn’t willing to install a system to ensure the dealerships success, then they most likely won’t hold employees accountable for presenting the necessary products to ensure dealer and agency profitability.

What is your unique sales proposition?

Brand your agency as one that specializes in Powersports F&I consulting
You shouldn’t just act like you’re in the Powersports business, you should look like it. Start by having a Powersports specific area at your website. Describe your agency as one that services motorcycle dealers with:

  • A Mission Statement that is specific as to what you do.
  • An Intuitive Navigation System that makes it very easy to get there by simply pointing and clicking to where you want to go.
  • A great visual experience coming into the Powersports area of your website.
  • A description of your services which differentiate you from your competitors.
  • Logins to your Technology tools (i.e. Menu, Reporting, Desking, On -Line Training).

You need to create a business card with a logo and headline specific for Powersports dealers. When you present or leave your card behind, you will have an edge if it spells Power sports. You should be versed in the industry just as you are in automotive. That means keeping up on the latest Powersports news, especially as it relates to F&I. For example, the lenders in this niche are different than in Automotive. You should know who those lenders are as well as their lending practices.

Align your agency with the right vendors
The right vendor may or may not be the same as those you use for your Automotive Aftermarket products. Be sure and chose a company that understands the Powersports business, not just someone offering a product line.

Position yourself as a reinsurance expert
Many agents have become very successful in the automotive niche by positioning themselves as the reinsurance expert alternative. You can use this same strategy for Powersports. You’ll find that many times the dealer has never been given an option to start a reinsurance position with their existing provider. Providing reinsurance to the dealer not only gives them an excellent profit opportunity, it allows you a potentially long lasting partnership with the dealer.

Use Technology to enhance your offering
In order to set yourself and the dealership up for success, you need to insist from the start which policies and procedures will get you there. One such policy is to require that the F&I Department use an electronic menu and report as part of your unique sales proposition. It will separate you from your competitors and install the tools necessary for the dealer to be profitable. The electronic menu should be designed specifically for Powersports. It should not be a menu that was designed for the automotive F&I department. A Menu designed for Powersports means it has the flexibility to handle things like promotional options, fewer package options, and when necessary, breaking out accessories and applying taxes, or capping payments when the lender restricts the payment or amount financed. I suggest you offer it for free to the dealer as long as they achieve a minimum level of production. You can always prorate the fee to them based upon them achieving lower levels of production. This way you don’t end up losing money or not making a reasonable profit with the account.

Sell them on using a Menu
Automotive agents who have experienced the evolution of menu selling know that it hasn’t just served as a compliance tool, it has enhanced F&I income since its inception. Most auto dealers see the value of using an electronic menu and are probably already using one. This is not the case with the Powersport’s dealer. Only about 10-20% of Powersports dealers use an electronic menu much like it was in Automotive five years ago. This makes your first order of business to sell the dealer on why an electronic menu will make them profitable. The use of a menu should be a requirement to do business with you, and part of your unique sales proposition.

Should you break the paradigm?

I am not suggesting that all agents should “break the paradigm” and diversify into the Powersports area, anymore than every new product that comes out should be placed in your briefcase. Simply signing a few dealers and transferring the same message that you use in Automotive is likely to cost you time and money.

What I am suggesting is you recognize the differences between the two businesses and focus your skills on their similarities. Instead of visiting the dealership each week to train the F&I staff, use online training and monthly meetings to leverage your position with the dealer.

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Powersports a New Addition to Agent Entrepreneur


Just in time for the summer months VMS Publishing has added a Powersports Channel to its wheelhouse of channels in our Agent Entrepreneur magazine. Our purpose for creating the Powersports channel is to provide valuable information for agents in the powersports F&I industry, and for those agents considering expanding into the powersports F&I industry, that will help them reach their goals and be successful in their market.

The Powersports channel is similar to the Agent Entrepreneur magazine in both purpose and content and is therefore like a magazine within a magazine. We will be covering many of the same topics that we cover for agents in the automotive F&I industry, the difference being its focus will be on powersports.

Many of the articles to come will cover newsworthy items that will help keep you informed as to what is current in the powersports industry, as well as tools to help powersports agents and those thinking of entering that market obtain and keep that competitive edge necessary to reach his/her goals.

As I mentioned the channel itself is much like Agent Entrepreneur Magazine. The articles we have in the pipeline cover topics about the Industry, F&I, Sales & Strategy, Compliance, Technology, and even some Training Tips and Techniques.

Take a look at the article from Powersports F&I expert Ron Martin that is published in the powersports channel this month. He not only address whether an agent should consider entering the powersports F&I arena, he also discusses several differences between the two industries as well as provides some insightful ideas on what to look for if an agent is actually considering crossing over into this market.

I hope you enjoy the article. I am looking forward to providing some great content and useful information that will help you grow your business and be the best agent you can be!

Should anyone have any ideas for topics that you would like to see us cover, please feel free to send them to me by clicking on the “contact the author” link in my biography at the end of this post. We would love to hear from you.

Posted in IndustryComments (0)

Should Your Agency Diversify into the Powersports Niche?


Whenever a new product is introduced to an independent agent, they ask themselves, “Should I take this product to my dealers?” An example of such a decision occurred when the “Combination Package” was introduced by several ancillary product companies recently. The combination package is a mixture of Tire and Wheel, Dent and Ding, Windshield Repair, and Key Fob Replacement. Sometimes these new product offerings become a staple in the F&I office, like the Tire and Wheel product has; other times they just fade away only to be replaced by the next new product.

An agency may take the new opportunity to their dealer for a variety of reasons:

  • The dealer expects them to bring exciting new profit ideas.
  • To diversify product/income opportunities for the dealership & agency.

An agents decision to promote the new product is really a decision to “break the paradigm” of the status quo and change the way the agency does business. This can sometimes be subtle but many times it requires a significant shift in agency practices. Introducing a new product may dilute existing product offerings or cause the agency bad will with the dealer if it isn’t successful or the company doesn’t follow through with such promises as paying claims efficiently.

Breaking the paradigm is necessary for the proactive independent agent if they want to lead people in a new direction but is something few can do because as much as we say we want change, it is natural to resist it.
In addition to breaking the paradigm by bringing a new product to a dealer, an agent may also diversify into another related business. The skills that an independent agent has in consulting the dealership with their F&I Department for Automotive dealers can be effectively transferred to the F&I Department for the Power Sports dealership but his/her approach needs to be different.

How does an Independent Agent break the paradigm and diversify into PowerSports?

Just as there are many similarities between Automobile and Powersports dealerships, there are also many differences. Their similarities provide for the appearance that an independent agent can easily transition from automobile F&I into Powersports F&I. This appearance has led several agents to try their hand at Powersports, all to often returning to their comfort zone because they were unsuccessful. If you take the exact same approach that you do in Automotive and try to duplicate it in Powersports, you’re almost certain to fail. To provide you success with Powersports dealers I suggest you take the “Best Practices” that have made you successful in the Automotive sector and tailor them to the Powersports sector.

I have heard many people in the both industries say the Powersport’s industry is 10 years behind the automotive industry when it comes to Sales and F&I but that’s not really the case. They are just very different industries. One difference is that the PowerSports industry is filled with enthusiasts who are both selling and purchasing the product. Another difference is it is more difficult to get the customer financed because there are less lending options available. Powersports customers are also more likely to pay cash for their purchase.
In the end, both industries need a front-end sales and an F&I sales process which results in providing the customer various options and products to choose from.

Which dealers should you focus on?

Under most circumstances, when calling on an automotive dealer, you know if you sign the business you’re going to get paid. This does not necessarily hold true when you sign a Powersports dealer. When calling on Powersports dealerships you must qualify the dealer just to evaluate their income potential. These are the dealers that have the potential to be the most profitable accounts. They are low maintenance and often aren’t being serviced by their existing agents. These dealers most likely aren’t realizing their true income potential.

  • Focus on Medium to Large Dealers: Medium to large dealerships typically sell more units and often employ an F&I Manager which usually translates into more product sales. How do you know which dealers these are? You could scan the dealership to see how many units are on the lot and in the showroom but this may not reveal the entire story. Powerports Business Magazine is a great resource for this kind of information. They produce a market data book annually that lists most dealerships annual revenue and publishes whether or not they have an F&I Department.
  • Focus on Dealers that have an F&I Manager: We have learned that automotive dealerships having a dedicated F&I Department translate to the highest profitability. Powersports dealers aren’t any different. If an F&I Manager is employed, it is usually worth your while to pursue the account. Unfortunately, many powersports dealers haven’t made the transition to a dedicated F&I Manager. So, the only way you’ll know is to go in and talk to the people who work there. You may just find that dealer who isn’t reaching their true potential.
  • Focus on Dealers that will install process tools like Menu and Reporting software which will increase the chances they sell F&I products. If a dealer is willing to install an F&I selling system that promotes product sales, you can be moderately successful even if only the salesforce is selling the F&I products. I suggest you offer a turnkey system to the dealership that includes an electronic menu system to ensure products are offered 100% of the time and a reporting system to hold them accountable to the set goals and desired results. If the dealer isn’t willing to install a system to ensure the dealerships success, then they most likely won’t hold employees accountable for presenting the necessary products to ensure dealer and agency profitability.

What is your unique sales proposition?

Brand your agency as one that specializes in Powersports F&I consulting
You shouldn’t just act like you’re in the Powersports business, you should look like it. Start by having a Powersports specific area at your website. Describe your agency as one that services motorcycle dealers with:

  • A Mission Statement that is specific as to what you do.
  • An Intuitive Navigation System that makes it very easy to get there by simply pointing and clicking to where you want to go.
  • A great visual experience coming into the Powersports area of your website.
  • A description of your services which differentiate you from your competitors.
  • Logins to your Technology tools (i.e. Menu, Reporting, Desking, On -Line Training).

You need to create a business card with a logo and headline specific for Powersports dealers. When you present or leave your card behind, you will have an edge if it spells Power sports. You should be versed in the industry just as you are in automotive. That means keeping up on the latest Powersports news, especially as it relates to F&I. For example, the lenders in this niche are different than in Automotive. You should know who those lenders are as well as their lending practices.

Align your agency with the right vendors
The right vendor may or may not be the same as those you use for your Automotive Aftermarket products. Be sure and chose a company that understands the Powersports business, not just someone offering a product line.

Position yourself as a reinsurance expert
Many agents have become very successful in the automotive niche by positioning themselves as the reinsurance expert alternative. You can use this same strategy for Powersports. You’ll find that many times the dealer has never been given an option to start a reinsurance position with their existing provider. Providing reinsurance to the dealer not only gives them an excellent profit opportunity, it allows you a potentially long lasting partnership with the dealer.

Use Technology to enhance your offering
In order to set yourself and the dealership up for success, you need to insist from the start which policies and procedures will get you there. One such policy is to require that the F&I Department use an electronic menu and report as part of your unique sales proposition. It will separate you from your competitors and install the tools necessary for the dealer to be profitable. The electronic menu should be designed specifically for Powersports. It should not be a menu that was designed for the automotive F&I department. A Menu designed for Powersports means it has the flexibility to handle things like promotional options, fewer package options, and when necessary, breaking out accessories and applying taxes, or capping payments when the lender restricts the payment or amount financed. I suggest you offer it for free to the dealer as long as they achieve a minimum level of production. You can always prorate the fee to them based upon them achieving lower levels of production. This way you don’t end up losing money or not making a reasonable profit with the account.

Sell them on using a Menu
Automotive agents who have experienced the evolution of menu selling know that it hasn’t just served as a compliance tool, it has enhanced F&I income since its inception. Most auto dealers see the value of using an electronic menu and are probably already using one. This is not the case with the Powersport’s dealer. Only about 10-20% of Powersports dealers use an electronic menu much like it was in Automotive five years ago. This makes your first order of business to sell the dealer on why an electronic menu will make them profitable. The use of a menu should be a requirement to do business with you, and part of your unique sales proposition.

Should you break the paradigm?

I am not suggesting that all agents should “break the paradigm” and diversify into the Powersports area, anymore than every new product that comes out should be placed in your briefcase. Simply signing a few dealers and transferring the same message that you use in Automotive is likely to cost you time and money.

What I am suggesting is you recognize the differences between the two businesses and focus your skills on their similarities. Instead of visiting the dealership each week to train the F&I staff, use online training and monthly meetings to leverage your position with the dealer.

Posted in PowerSportsComments (0)

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