A Saturday at Harley-Davidson of St. Augustine

by

Dealernews Top 100 Dealer Builds Traffic Several Ways

ST. AUGUSTINE, Fl. (Jan. 16, 2010)—Owner Clark Vitulli opens his small Harley-Davidson store here before 8 am this cool, drizzly Saturday morning, making last minute preparations for a couple of special events and the shooting of several TV commercials.

Sales of all makes of new and used motorcycles were down more than 40 percent in Florida last year, but Vitulli’s operation bettered that sad figure; his sales were off by less than 30 percent. The operation generated revenues of nearly $10 million last year. One reason for his success is that he worked hard on promoting the store and giving prospects many opportunities to visit his 16,000 sq. ft. facility. It has a 9,000 sq. ft showroom and a 7,000 sq. ft. service department with 10 service bays that is completely air conditioned with an AC duct in each bay. There are 20 full-time and part-time employees.

There’s a picnic area and a band shell for live music every weekend. There’s also a shuttle bus running to the huge outlet mall nearby.

Clark Vitulli

Today, the store is promoting a 9 am blood drive, followed by the monthly meeting of the store’s HOG group. After the meeting, the film crew will move in to shoot footage for a series of 30-second TV commercials featuring customer testimonials. The shoot will last a couple of hours. After that, traffic should slow down this afternoon.

While it seems a bit crazy here, it’s a typical Saturday for the store.

The dealership also operates a tiny retail satellite operation (Harley calls it an Alternate Retail Outlet – ARO) a few miles away in St. Augustine’s Old Town, the center of this delightful historic tourist attraction. St. Augustine is the oldest city in the United States, older than Jamestown by 42 years, in fact. It was founded in 1565, 55 years before the Pilgrims landed at Plymouth Rock. Vitulli and his business partner, Allen Good, opened the small 1,500 sq. ft. store to sell apparel and accessories in December, 2009. It’s in the high rent district of splashy retail shops on St. George Street, the main tourist venue, but with the high pedestrian traffic, it generates sales of about $200/sq ft and helps drive riders to the main store located on the edge of town, just off I-95.

Vitulli and Good bought the run-down Harley dealership, located on 1.6 acres, in 2007. They had worked together at America’s PowerSports (APS), a national dealer group put together by Vitulli before deciding to try their hand at owning their own dealership.

Vitulli had visited more than 200 dealerships across the country as he looked for acquisition targets, so he knew how to evaluate a store’s potential. He was familiar with the Florida area, having grown up in Palm Beach, attending college at the University of Florida and working the area as a rep for Chrysler.

The pair spent considerable time and money refurbishing the store, and, among other things, creating an attractive mezzanine-level customer lounge, complete with Internet hook-up and a Wall of Honor promoting achievements of the store and its customers.

With last year’s economic downturn, Vitulli and Good, like most dealers, were forced to make unpleasant staffing decisions. Four managers, sales, parts, service and, motorclothes, departed in the last six months, some left on their own for other opportunities, some were cut to reduce costs. Vitulli’s operations manager, Shannon Ashley-Heltzel, has taken on the added responsibilities of sales manager, and Vitulli spends much of his day on the floor dealing with customers and prospects. He and Shannon direct marketing activities and oversee operations.

His biggest problem: Wasting time on prospects, who don’t qualify for financing. He estimates it can take nearly two hours from the first customer contact through the last step in F&I to process a sale. But on one recent Saturday, only one of eight potential customers qualified for the needed financing on a new bike. That’s nearly two days of lost time.

As they worked to balance staffing against revenue, Vitulli and Good adapted an idea they had seen at another dealership and developed a type of job sharing effort between the Parts and the Service departments. Vitulli dubs the program PALS, for Parts And Labor Specialist. It combines functions of the Parts sales person and the Service Writer.

Customers can be handled by one PALS representative for both their parts and service needs, providing a convenient, seamless experience. The approach also allows Vitulli to shift resources between the two departments as needed. “Often one service writer isn’t enough,” says Vitulli, “but frequently two is too many.” In that case, he can shift one of these cross-trained pros to the Parts desk to assist in overload situations. It’s kind of a job-sharing approach between Parts and Service. “It works for us,” says Vitulli because it cuts costs, increases flexibility and provides better customer service that results in higher revenues in both departments.

The Bloodmobile arrives shortly before 9 AM and parks at the front corner of the parking lot. It’s part of the store’s community involvement effort, and it also attracts attention to the store. There’s a food stand in the lot a few feet away from the front door, and a vendor is pushing out breakfast burritos for the staff and customers. “They’re the best,” several people tell me, but I’ve loaded up on free waffles at the hotel breakfast bar earlier, so I have to pass on this culinary delight. Maybe next time.

Vitulli greets me at the front door, wanting to know why I brought the rain with me. I arrived from Minnesota only days earlier. “This isn’t good,” he says. “People won’t ride in the rain. With cars, it’s different. People just drive in; no problem.” He’s a former auto, RV and marine executive, who built successful careers at Chrysler, Mazda, Mark III and Outboard Marine before moving into motorcycles.

It’s 9:15 now, and people are drifting in, heading for the big table at the back of the store, loaded with coffee and free donuts. Vitulli paces the floor after gulping down his burrito, talking with employees and looking at the weather.

At 10 o’clock the monthly meeting of the store’s HOG chapter is scheduled to begin. Nearly 100 chairs are set up in the middle of the show floor for the meeting. Staff did the meeting prep last night, moving bikes off the floor and lining up the chairs. There are about 240 members in the chapter, up from 83 active members when the Vitulli-Good team took over.

They built up the numbers by working closely with the HOG club, personally attending Harley’s HOG officers training program alongside the dealership’s HOG officers, hosting regular weekly events at the dealership to encourage HOG sign-ups, placing the benefits of HOG membership on their web site, assisting in creating interesting bike rides, supporting the club with fund-raising activities, sometimes riding along with the HOG club on weekly rides and generally making HOG membership a fun, active experience.  It’s clear that the dealership and this HOG group are partners.

Riders are grabbing food and coffee and talking bikes and riding. More than 100 HOG members show up for the meeting; all the chairs are taken, and it’s standing room only.  It’s nearly 10 o’clock now, and the store is jammed; it’s difficult to walk in here. They’re a mixed group, young and old, men and women. It doesn’t seem to match the aging Harley customer profile, although Vitulli says his average customer is 48 years old.  There’s a carnival atmosphere with balloons and popcorn and it should provide some really good footage for the TV crew when it arrives.

The meeting starts with a Pledge of Allegiance followed by a moment of silence for our armed forces. There’s a reminder about the blood mobile outside and a call to donate. The club is devoted to local veterans and supports several veterans groups and individuals. “I feel good because we helped some veterans,” says Joe Driscoll, chapter president. “We helped veterans; they need help and nobody else is helping them,” he says. The rest is typical club stuff—committee reports and discussions of upcoming rides.

Clark makes a few brief comments about the dealership and the industry. He also talks about new, favorable city rules for bikers as well as a special weekend event— St. Aug Fest— co-sponsored by the dealership during upcoming Bike Week next month. It’s typical of the dealership’s pro-active community involvement efforts.  He encourages club members to stay and talk with the film crew, telling them why Harley and the store’s people meet their riding needs. The meeting wraps up after about an hour. Normally, there would be a club ride, but today’s weather is too ugly.

As the HOG meeting ends, the film crew working for Comcast cable arrives and begins shooting the scene for upcoming commercials. The “B” roll material will be used to provide the atmosphere in the five or six 30-second spots that the store will run on Comcast cable throughout this year. Vitulli also will buy a bit of time on the local network news broadcast, but not much. “A store like ours doesn’t have the budget for network news,” says Vitulli. Media costs eat up about two-thirds of the store’s annual marketing budget, even though only a limited number of spots will be run.

The crew will return during the week to shoot more testimonials with satisfied customers for the TV spots. “It’s the best form of advertising,” says Vitulli. The audio from the interviews will be used to make a series of 60-second radio spots that will run concurrently with the TV spots. “Customers see the TV,” says Vitulli, “and then the radio spots reinforce the message.”

The store’s marketing program lists several digital initiatives and weekly e-newsletters, dubbed “Road Dirt,” including a well-rounded website that averages more than 45,000 visits each month and its own Facebook page. The successful program has won the store several prestigious awards, and it has been named a Dealernews Magazine Top 100 dealer for the last two years.

It’s late morning now and time for me to pack up. I’m heading down I-95 to Destination Daytona, the big Bruce Rossmeyer development that is home to the world’s largest Harley-Davidson store, a two-story, 109,000 sq. ft. monster. The development is anchored on the end opposite Rossmeyer’s store by the large retail operation of J&P Cycle, an Iowa-based direct mail company. The development also features a collection of retailers and restaurants, including a Houligans, an outlet store, and a number of residential condominiums.

After a quick trip through Rossmeyer’s project, I head to Orlando for two days of meetings with a 20 Group of dealers led by Bill Shenk. I’m anxious to hear what these top performers are saying about business conditions in their market areas. JD

Contact me with story ideas and tips at 952/893-6876 or joe@powersportsupdate.com.

Advertisements

Tags: , , , , , , , , , , , , , , , , , , ,

3 Responses to “A Saturday at Harley-Davidson of St. Augustine”

  1. jeremyburk Says:

    It’s always cool to hear the inside story on successful bike shops, I am always trying to treat the next customer a little better than the last.

  2. Delusional Says:

    This is a unbelievable. Starting with line one. Clark Vitulli does not know what his store looks like before 8am because he daily arrives between 10 and 11 am. He should be thankful for his employees that open the store everyday, because he, Allen and Shannon never arrive before 10am. Paragraph two; air conditioned shop? Only after they had owned it 2 years un-air conditioned and complained it was too expensive to get air conditioned. Shuttle bus to the outlet mall. As long as you shuttle your own 2 feet. Need I say more? this article is a sham and far from the truth. Shame on Dealernews for only listening to Mr. Vitulli and not the truth.

  3. Joe Delmont Says:

    This story, as the headline states, is the report of one Saturday’s activities at the St. Augustine Harley-Davidson store. No more, no less. Don’t read more into it than I what I wrote. It wasn’t intended to be a detailed analysis of the historical operations of the store under the new ownership.

    Joe Delmont Dealernews Magazine 7525 Mitchell Road, Suite 203 Minneapolis, Minn. 55344 952/893-6876 (direct) 612/845-8091 (cell) Skype: 651/314-7875

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s


%d bloggers like this: