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Last year Walmart announced it was closing 154 stores in the United States. Macy’s is scheduled to be closing 100 stores early this year. And last July, Sports Authority filed bankruptcy and closed 450 stores. Many blame the ‘Amazon Effect’ for thinning of the retailer’s herd. While The Everything Online Store could be a considerable factor, I feel that it is transaction retailing that is really on the ropes. If this causes you concern, it should. 

Dick’s Sporting Goods, on the other hand, has experienced historic growth over the last 10 years. It’s clear to me that CEO Edward Stack, (son of founder ‘Dick’), is a high performer who understands his customers are his most important asset. When Sports Authority folded, Dick’s was standing on the auction steps and smart enough to scoop up 114 million customer files and 25 million email addresses for a cool $15 million. Why? Because the most likely person to buy sporting goods equipment in the future are those who’ve bought it in the past. The most misunderstood metric in business is the true cost to get a customer, and the waste that goes into mass marketing to those with no interest in the products being sold. 

Here at Powersports Marketing we’ve long preached that your customer data is the number one asset you have, and I’d say that Stack agrees. Yes, it’s worth even more than your brick and mortar. This is why one of the world’s richest men at the time, Andrew Carnegie, once said:

“If you take away all my wealth, my products, my equipment, my staff, in fact, virtually all assets and resources but leave me my customer lists, I will have everything else back in short order”. 

In years past I’ve been a customer of both Dicks Sporting Goods and The Sports Authority and there is no question that Dick’s has invested more in our relationship and in return, has earned more of my business and loyalty. 

Transaction businesses focus on one and done selling and spend all of their time and resources promoting discounts, sales, and going after new customers. Relationship marketers on the other hand, focus on selling to existing customers over and over, generating more and more referrals, and utilize relationship messages rather than discount messages.

To steer clear of disaster and avoid the retail carnage, this New Year I’d like to recommend a few important best practices for your Resolutions. 

Number 1. Resolve to be diligent, hard core, even obsessive about accurately collecting customer information. Some retailers require employees have a 97% collection ratio or you’re asked to find your happiness elsewhere, and for good reason. The more records you collect of real riders in your market area, the more effective your marketing will be and the more your business will be worth in the future. It benefits present bank and future bank. 

Number 2. Resolve to spend your limited marketing budget targeting those who are most likely to buy from you. This is called your buying base and is made up of two groups. Those who ride and have done business with you in the past, and those who ride and live in your market area but have not done business with you. Quit marketing to the masses trying to convert non-riders into riders, it’s a waste of your time and money.  

Number 3. Resolve to implement lead generation marketing. Stop it with the branding, get your name out there advertising. You’re not a big dumb company with millions to blow. If you can’t measure it, you shouldn’t be doing it. If someone tells you the purpose of your advertising is to create TOMA, Top Of Mind Awareness, don’t walk…run. They don’t understand the motorcycle business. Branding will be a happy byproduct of proper direct response marketing. 

Number 4.  Resolve to have integrated marketing messages online and offline across multiple media methods that build affinity and create relationships, NOT promote sales and discounts. The OEM’s and their agencies have this wrong and it drives me crazy. Don’t follow their lead here. I’m not being speculative or assumptive, I have the data from thousands of campaigns to prove it. In fact, pass this article along to your OEM rep. OEM reps, pass this along to your Executive leadership teams, you guys have to learn this stuff. 

Our Predictable Growth formula is simple. Grow your number of customers, and consistently grow their annual customer value through consistent, targeted, relationship-building marketing. By creating a personalized experience with each and every rider in your market area you generate more repeat customers who stay longer and don’t haggle over price and also send you more referral business. 

But who and how is the industry supposed to grow and add new riders? For the last 3 decades, the data has proven that new riders come from the influence of friends and family (not radio commercials!). If we want to see our industry grow and create new riders we have to create better relationships and better experiences for the existing riders. That’s not the popular answer, but it is the right one. 

This business model is completely opposite of transaction selling based on lowest price and is immune to the shrinkage many retailers will experience in the New Year. 

For more information on Predictable Growth and how to create relationship marketing for your Dealership contact us at 877-242-4472. 

Happy 2017!