This is a reprint of an article I wrote for the March 2021 issue of Powersports Business.
I started working in a motorcycle dealership in the fall of 1992. Since then, I have worked in a handful of other dealerships. Except for one stint in Houston, Tuesday-through-Saturday has been the schedule I have adapted my life around.
I am often asked why most motorcycle dealers are closed on Sunday and Monday. My answer has been that many dealerships were founded by motorcycle racers; these entrepreneurs like to race on Sunday and recover on Monday. The rest of the work week pays for the weekend hobby. There are other industries that align with this 5-day work week; barber shops come to mind.
In my current role as a 20 Group facilitator for Spader Business Management, I work with dealers across North America. Rarely does a meeting goes by where we do not spend some time discussing the optimal work week. The 5-day dealers wonder about 6- or 7-day options, and the 6- and 7-day guys wonder if they can go back to 5. The grass is always greener.
Over the years, I have come to look at this topic from three distinct angles:
Dealership Profitability
My work in the industry has given me plenty of data to analyze. From year to year, there is a lot of volatility in the powersports industry, so it is not always easy to say that one specific action led to a particular outcome. However, we have seen enough dealers transition between these types of schedules to learn a few things. Looking at dealership profitability, there is no clear increase in net profits when a dealership extends the number of days they are open. In fact, as a percentage, some dealers go backwards.
The 5-day schedule has developed around the traditional 40-hour work week. Dealers that extend the work week either need to add additional staff (which can lead to being overstaffed during the slower times) or allow employees to work more than 40 hours (which with overtime rules can be prohibitively expensive). While many dealerships see a small increase in business, a portion of this comes from customers who would have visited the dealership during the 5-day work week, so not all gains are incremental.
Customer Experience
The debate about an extended operating schedule often centers around the customer experience and making it easy to buy. I do not dispute that retail is evolving, and in many cases faster than the dealers in our industry.
When a customer needs to buy a new battery, or to have a flat tire replaced, those things are extremely important to the consumer. People hate to wait, especially when it’s inconvenient or costs them money. However, in the average dealership, approximately 80% of revenues are generated by the sales department. Many of these major unit purchases involve multiple contacts between the customer and the dealership, often playing out over weeks or months. Opening an extra day or two will drive some additional parts/accessories and service sales, but unit sales will not increase at the same level.
Before you consider expanding the schedule, think about your personal experiences. I find it extremely frustrating when I head into a dealership to talk to a certain salesperson, only to find that person is not working on that day. If you buy as much stuff as I do, I am sure you have had it happen to you as well.
For most dealers we work with, communication is not a core strength. Details of the customer relationship often aren’t logged in the CRM; in fact, in many cases the customer’s name is not even logged into the CRM. What are the odds someone logged that the customer was going to get a free windshield and a free first service? When a customer comes in and we’re not all on the same page, everyone is frustrated, not just the customer. Expanded schedules in dealerships that are not process-oriented will often result in reduced margins – and a terrible customer experience. How many 5-Star reviews does it take on Google to offset that 1-Star review?
Staff Experience
The piece that many dealers overlook is the experience of the employees. A 5-day work week means that everyone gets two days off in a row. 6 days is the hardest schedule because only a small percentage of the team gets two days off in a row. 7 days is the second-best option after 5, because you can consistently give everyone two days off in a row, although they will not always be the days that each employee wants. The sleep-deprived salesperson working the floor on Sunday morning will not be earning CSI awards from any of their customers.
Anecdotal evidence points to employees in 5-day dealerships being more satisfied with their work schedules, and these dealerships usually have less turnover. In a market where employees have a choice, the top candidates will seek out the 5-day a week dealership.
I have seen lots of dealerships change up their schedule. At Spader, we promote the 5-day work week, and we have seen more dealers go from 6+ days per week back to 5 days. The first year is always tough because it takes a while to re-train the customers. My advice to these new 5-day work-week dealers is to advertise the change well in advance. Then, when it happens, stay away from the dealership on Mondays. Go enjoy your new-found freedom. In all my years, only once has a dealer told me that they regret going to a 5-day week.
If you are stuck on expanding your schedule, there are some alternate solutions. Many customers just want someone to talk to. Consider hiring a couple of employees to respond to emails and/or phone calls during the hours you are closed. Queue up the business for when the doors reopen. Or hire an outside agency to take these calls (it is what your doctor does on his weekends).
At Spader, we often talk about Success and Fulfillment. Success is related to running a dealership that is profitable. Fulfillment is the personal side of the business. Fulfillment entails a lot of components, but having a top team, being a steward of your brands, developing future leaders, and enjoying your time away from the dealership are all things that money cannot buy. You could run yourself into the ground making a few extra bucks, but if you do not have the time to spend all that money, who cares?
Here is the full issue from March if you’d like to read more about what’s going on in the powersports industry.
PSB_March_2021_Compressed