Press - Fran O'Hagan

Pied Piper releases first Internet study in five years

In addition to the annual Prospect Satisfaction Index ratings, Pied Piper Management Company, LLC, also released its first Internet Lead Effectiveness (ILE) study since 2008. For that, the company tested 19 different criteria, related to which dealerships responded to online inquires within 24 hours.

“The way we approach this is exercise the same way the customer would approach this,” Pied Piper president Fran O'Hagan said.

Pied Piper staff searched a brand and city in an Internet browser and picked the first one to appear each time. Then they looked at the inventory and followed the online directions for contacting the dealership to ask a specific question about a certain product. Each search was done mid-week, mid-day in local time, and a phone number was provided with each inquiry.

The scores from five years ago improved. In 2008, only 30 percent of dealers responded within 24 hours, whereas in 2013, 72 percent did. The first response to an Internet inquiry was automated 56 percent of the time and personal 16 percent of time.

Harley-DavIdson dealershIps Were top ranked in the newly released 2013 Pied Piper Prospect Satisfaction Index (PSI) US. Motorcycle Industry Benchmarking Study, which measured dealership treatment of motorcycle shoppers. Study ran kings by brand Were determined by the patent-pendmg Pied PIper PSI process, which ties "mystery shopping" measurement and scoring to industry sales success.

For the first time since 2008 , Pied Piper also separately measured how effectively motorcycle dealerships responded to customer inquiries received online through dealership websites.

Harley-Davidson dealerships led all brands in 18 different sales activities, such as encouraging shoppers to sit on the motorcycle, asking for contact information and helping the shopper.

Pied Piper changes scoring system, and H-D stores remain on top

As a group, Harley-Davidson dealers excel at handling prospective customers. For the second year in a row, they topped Pied Piper Management Company, LLC's Prospect Satisfaction Index, with a score of 111. And they did so despite Pied Piper changing the scoring system.

Since the inception of PSI in 2007, Pied Piper has measured 57 variables when grading dealerships. Though the company still measured those variables, it only scored about 40, with a focus more on selling and less on factors such as the facility. As a result, some OEMs moved down on the list, while others moved up. BMW dealers, for example, always rate well on facility scores, but after those categories were removed, the group's overall score dropped.

“The industry average is still 100. The maximum PSI score for 2013 and beyond is 150, and the minimum is 50, so the individual dealer who is getting a PSI score approaching 150 is doing outstanding,” Pied Piper president Fran O'Hagan explained, adding that those dealerships with scores closer to 50 need improvement.

Harley-Davidson dealerships received the highest score in the 2013 Pied Piper Satisfaction Index (PSI) released this week. However, Suzuki dealers ranked No. 1 in the PSI-Internet Lead Effectiveness study.

Look for more on the PSI results in the May 27 issue of Powersports Business. The following is the news release from Pied Piper Management Company, LLC:

Harley-Davidson dealerships were top-ranked in the newly released 2013 Pied Piper Prospect Satisfaction Index (PSI) U.S. Motorcycle Industry Benchmarking Study, which measured dealership treatment of motorcycle shoppers. Study rankings by brand were determined by the patent-pending Pied Piper PSI process, which ties “mystery shopping” measurement and scoring to industry sales success.

For the first time since 2008, Pied Piper also separately measured how effectively motorcycle dealerships responded to customer inquiries received on-line through dealership websites.

MONTEREY, Calif. - Among motorcycle retailers, Harley-Davidson dealers treat shoppers the best — although Suzuki dealers excel when it comes to following up online leads.

These were two of the findings of a pair of new studies: the annual 2013 Pied Piper Prospect Satisfaction Index (PSI) and a separate study by the same firm that, for the first time since 2008, measured how well motorcycle dealerships responded to customer inquiries received online through dealer websites.

Dealer service provider Pied Piper conducted its PSI study between July 2012 and April 2013 using 2,503 hired anonymous mystery shoppers at dealerships representing all major brands, located throughout the U.S. After each visit, the shoppers answered yes-or-no questions.

Using data collected from its clients, Pied Piper claims to have found a link between the mystery shopping scores and dealership sales.

Harley-Davidson dealerships led all brands in 18 different sales activities, such as encouraging shoppers to sit on a motorcycle, asking for contact information and helping the shopper overcome obstacles to the purchase.

Eleven different brands led at least one sales process category, and brand performance varied considerably from brand to brand. For example, Ducati salespeople offered a brochure to about 9 shoppers out of 10, while less than half of Suzuki, Honda or Kawasaki salespeople offered a brochure. BMW, Triumph and Harley-Davidson salespeople were more than twice as likely to offer a demo ride as the salespeople at Ducati, Suzuki, Honda and Yamaha dealerships, the study found. Victory salespeople were most likely to suggest arranging a demo ride in the future.

Harley-Davidson dealers outscored dealers from other brands to take the top spot in the Pied Piper Prospect Satisfaction Index U.S. Motorcycle Industry Study for the second consecutive year.

The annual study measures the effectiveness of motorcycle dealerships, rating them on how they perform in different categories, such as inviting customers to sit on a floor model, offering demo rides and asking for a customer's contact information. The study was conducted from July 2012 to April 2013 with data collected by 2,503 hired “mystery shoppers”.

We've included the full scores below as well as the scores from past years. One caveat however: Pied Piper PSI has rejigged its study questions and adjusted the weighting and scoring for the 2013 study to achieve an average score of 100. This resulted in a significant scoring changes compared to last year's study and a wider range between the highest and the lowest scores.

Harley-Davidson dealers ranking highest score of 111 while KTM dealers ranking last at 73. Last year's study had Harley-Davidson leading the way with 108 while KTM again ranked last but with a score of 92.

Harley-Davidson dealers outperformed all other manufacturers in 18 different activities including encouraging customers to sit on motorcycles, asking for contact information and helping overcome obstacles to a purchase.

Second place in the 2013 Pied Piper study was Ducati with a score of 107. Ducati dealers offered customers a brochure nine out of 10 times to lead all manufacturers. By comparison, less than half of Suzuki, Kawasaki and Honda salespeople offered brochures. Ducati dealers however were less than half as likely to offer a demo ride as BMW, Triumph and Harley-Davidson dealers.

The big news from this year's Long Beach motorcycle show is not what happened, but what might happen. First though, remember the Honda motorcycle ad, “You Meet the Nicest People on a Honda?” Believe it or not, 2013 marks fifty years since that ad helped mainstream America notice — and buy — motorcycles in the 1960s.

Back to the Long Beach show … At last year's show, Honda released the CBR250, a sub-$4,000 model aimed at driving new buyers into dealerships. At this year's show, Honda introduced a lineup of three 500cc motorcycles, starting under $6,000. Like the CBR250, these new 500s will appeal to new riders, but the solid designs look much better than we might expect of “beginner bikes.” It is not just Honda either. Kawasaki's new Ninja 300 is a similarly attractive product with a price that will not scare away new riders.

Think about these products … Five or six years ago — during the time of $10,000 600cc sport bikes — manufacturers and dealers would have paid little attention to a $6,000 500cc motorcycle. After all, the profit margin to the manufacturer for these “beginner bikes” pales in comparison to that of a $10,000 motorcycle, and the same is true for dealers. Last week while visiting a Honda dealership, I heard complaints about the low gross available on the new CRF250L. “Hardly worth the effort to sell it.”

But let's think back to 1963, and what might happen today. We can complain about selling less expensive motorcycles, or we can turn 2013 into 1963 all over again. The gross from today's CB500 or Ninja 300 sales may be lower than we like, but those customers are likely the key to the industry's success. They may not remember that 1960s Honda ad, but these new customers will go on to buy multiple bikes and accessories over the years and will also attract their friends—a whole new generation of riders—into your showroom.

Matt Appleman runs a very small custom bicycle shop in Minneapolis, specializing in hand-built carbon-fiber bicycle frames. Matt's business may be small, but he has adopted an important sales tool — anticipation — that you can apply at your dealership too.

Matt describes how he builds bicycles like this: “Upon approval of the design, the fun starts for me, and the anticipation begins for you! As the frame is being built, I'll keep you up to date with pictures of the framebuilding process …” There's that word, anticipation. He goes on to describe how in time the bike will be delivered to the new owner. You can bet also that when he sets a delivery date in the future he will stick to that schedule — under promising and over delivering.

Back to our question … How can we harness “anticipation,” and for that matter, Matt's successful process, at a motorcycle dealership?

First, recognize that a customer having to wait for delivery — for sales, service or parts — does not have to be a negative experience for the customer. In fact, ironicaly, waiting for something can make a customer enjoy it even more.

But a customer having to wait can also be a disaster. What's the difference?

Three important steps:

1. Set time expectations up front. Always under promise and over deliver.

2. Take the time to keep your customer updated while they are waiting. Give them interesting facts while they wait. Or even better, with today's easy-to-use smartphones, snap a photo of progress and email it to them.

3. Deliver on time. The only way anticipation continues to be a positive is if in the end the delivery is on time.

Your best customers are the ones who are loyal, repeat buyers. Grow more of them by throwing in a little anticipation.

It's one of the most bitter battles in the American automotive marketplace, and it pits two of Germany's luxury automakers in a grab for the brass ring. But this year, Mercedes-Benz is betting it can topple rival BMW to become the best-selling luxury automotive brand in the world's largest high-end market.

The maker has been staging a series of meetings with dealers across the country aimed at improving customer handling. Dealers, in turn, have spent about $1.5 billion to upgrade more than 90 percent of U.S. showrooms. The results appear to be paying off.

“Mercedes sets the benchmark,” said Fran O'Hagan, whose Pied Piper Prospective survey uses thousands of so-called “mystery shoppers” to measure how manufacturers are handling the sales and service process. Mercedes bested such stalwart competitors as BMW, Lexus and Audi in results released earlier this month.

And that's apparently helped it gain a leg up on BMW. It held a 2,000-unit lead over the Bavarian automaker for the first half of 2012 after narrowly losing the U.S. luxury sales crown in 2011. Anything can happen, especially if rivals BMW or Lexus ramp up incentives spending, Mercedes officials admit. But it's clear they are ready to pull out the big guns to grab the ring this time.

Mercedes-Benz dealers are most likely to deliver customers the sort of shopping experience they want – and then close the deal, according to a new study.

Asian luxury dealers were close behind, along with Jaguar and Cadillac, according to the latest Pied Piper Prospect Satisfaction Index which uses so-called “mystery shoppers” to measure the way potential car buyers are treated.

The study looks at 60 different sales activities, from the simple act of greeting a customer when they walk into the showroom to providing a test drive. Surprisingly, salespeople proved reluctant to take one of the most important steps of all, actually asking a prospect if they're ready to close the deal.

“The world has changed dramatically with the advent of the Internet,” said Pied Piper research chief Fran O'Hagan. Twenty years ago, the dealer was the gatekeeper, controlling every aspect of the car buying process. Today, however, “A customer can go to the showroom knowing as much as you want. So, the role of the salesperson has changed.”

And so has the balance of power. The best dealerships recognize and adapt to this shift, he explained, noting that the pace of change is so rapid – and the best brands have adapted so quickly – that a company that scored third in the Pied Piper study in 2008 would rank near the bottom in 2012 with the same score.