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Best Ideas Contest gets thumbs-up from IBD Summit attendees

Published January 20, 2017

TEMPE, Ariz. (BRAIN) — It was billed as the Best Ideas Contest. Five dealers offered attendees at the annual IBD Summit their best ideas to improve their operations and profitability. And the winner as selected by the audience in a secret ballot was . . .

Hill Abell. He shared financial data from his stores, Bicycle Sport Shop in Austin, Texas, on the success of his Trade In/Trade Up program. A quick synopsis: Last year his staff sold $345,000 in used bikes at an average margin of 40 percent.

The best part, however, was converting those trading in their old bikes into new-bike buyers. That resulted in $800,000 in new bike and accessory sales as customers traded in and then traded up.

Abell said the key to his program is a 70-point checklist that his service managers use when meeting with customers bringing in their old bikes. The process, which takes about 15 minutes, helps customers understand the true value of their bikes. Staff also pays attention to prices on eBay, Craigslist, the Bicycle Blue Book and other sources.

As Abell pointed out, customers often place more value on their bikes than they are actually worth. “This system helps prove the value of their bike,” he said. It’s a process that his customers value,Abell added.

Alex Obriecht, owner of Race Pace Bicycles in Baltimore, earned the No. 2 spot with his program to put his service center and mechanics front and center in his stores.

When customers walk into a bicycle store, everything in the front of the store — mostly accessories and other items — can be bought anywhere at any time. But Obriecht said he wants his mechanics to be front and center and to develop a relationship with his customers. “Do not hide your bike mechanics,” he said.

And doing so, he added, dropped topline dollars into the cash register. With $2.4 million in revenue, Obriecht said his mechanics were responsible for $415,000 in add-on sales and an additional $290,000 in bicycle sales. His service department alone was responsible for about 35 percent of his gross sales.

Three other dealers offered their tips as well. Kent Cranford of Motion Makers Bicycle Shop in Asheville and Sylva, North Carolina, urged dealers to pay attention to managing the dozens of passwords that now proliferate at most stores as vendors require passwords to enter their systems. By having a password manager, Cranford can control what sites his staff can access and it helps speed customer transactions.

Dan Thornton, owner of Free-Flite Bicycles in Atlanta, said that over the years he has donated upwards of $50,000 to several advocacy groups, particularly SORBA, an affiliate of IMBA. But Thornton likes to give directly to groups rather than have his donations diluted since IMBA, for example, spreads its money across a spectrum of its affiliates.

But Thornton said that last year he wanted to “leverage” his dollars to bring in more money from the community. For those who are fans of PBS, think of Thornton’s program as a challenge grant.

Last year he put up $3,000 for each of the two organizations he supports. The groups then took that money and leveraged additional donations that brought in almost $20,000, including $1,500 from a competitor in the market.

And finally, Dave Hanson, owner of Jax Bicycle Centers in Orange County, California, urged dealers to “compound” interest in themselves by developing unique programs that would set their shop apart from competitors. At Jax, Hanson offers a list of features that benefit consumers such as a Lifetime No Flats policy, price guarantees, ride clubs and other perks.

These programs, he said, help increase profitability and customer retention — all of which helps compound revenue at his stores. 

Topics associated with this article: IBD Summit

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