By James Stanfill
Editor's note: James Stanfill is president of the Professional Bicycle Mechanics Association and founder of A Better Bike Biz.
Last week I delivered a keynote talk at the CABDA Chicago breakfast. I spoke about where we can improve profitability. The response thus far has been very positive. Within the talk I mention the use of the word “free” and how we use it far too freely.
Ages ago, we sold bicycles and those bicycles had sustainable margins. We gave away accessories, we gave away labor, and we included free follow-up service. Today, margins on most new retail goods are shrinking and while we’ve figured out that we can’t give stuff away, we still give away a free tuneup of some type with new bicycle sales.
Once you’ve told someone they can have service for free, you’ve devalued your entire service department. As a customer, why wouldn’t I be alarmed when I come back and someone tells me a tuneup is $50 … when I got the bike, you told me that this stuff is free!
I challenge everyone who takes the time to read this piece to create a coupon or gift card and attach it to a SKU. Give that to your customer with a new bicycle sale. Imagine the scenario where you sell a bicycle and you say to the customer “here is a gift card for your first tuneup.” You’ve immediately given that thing that used to be free a value, this customer can look at your labor board and be happy they are holding something worth $50 in their hands. You’ve created an instant value attached to the service department in your store.
I feel like some folks are going to get up in arms about having to pay for a plastic gift card … Relax, do it however you want. Print business cards that the sales person gives out and initials or whatever — just give the thing you are giving away a value so that later in life this customer understands that the service department in your store isn’t a nonprofit operation hidden in the shadows of your shop.
Why we are on the subject of free, stop discounting things! Service should never be free or discounted. A person can only receive this “thing” by visiting your competitor; they can’t buy service on the internet. Discounting accessories on a bike sale or for whatever reason is just stupid. Sell and promote products in your store that are protected by price enforcements such as MAP. If a customer is price shopping, they will soon discover the widget they want is the same price online as it is in your store, discounting it is only costing you profits.
We as an industry are in a challenging time. Some things have gotten better, others are still getting worse. We see that the auto industry is lurking and playing with e-bike technology and sales. If we don’t straighten our shit out, why would they even bother with us? To them we are chump change. They do not need us for distribution or support; they figured it out long ago, and service is where they profit. We all need to rethink the importance of service in our stores and stop saying service is free. Consumer perception is the critical mass of success, if we can begin now, today, to change the perception of the bicycle shop we will win tomorrow.
You can watch a brief video of the entire slide presentation from CABDA’s breakfast. It is available for viewing by visiting: abetterbikebiz.com/cabda-keynote.
