Tow Heads

Dec 3, 2009

Restylers and other towing products installers regularly rely on enthusiasts to buy their products. Lately, though, these customers are few and far between. When they don’t buy your products, you have to find the sales somewhere.

Despite the market’s malaise, there are still customers for towing products. You just have to know where to look, and you have to be willing to do the legwork to find and pitch these customers to get the sales. So where to start?

If you sell trailer hitches and towing accessories from your retail store, and install them in your service bays, you already have the tools, personnel and ability in place to seek out non-traditional, non-retail customers in alternative markets, and capture these sales.

If that’s the case, who are these customers, and how do you market to them?

New customers, you say?

They’re closer and easier to reach than you might think. Here are just a few examples of the types of customers you might not be selling to now, but could be with just a little extra effort: landscaping contractors, municipalities, school districts, police and fire departments, state agencies, new- and used-car dealerships, marine dealers, powersports (motorcycle, snowmobile, ATV, personal watercraft) dealerships, resorts (hotels, conference centers, ski areas, etc.) and service businesses (snowplow contractors, trucking companies, trash removal services, etc.).

All of these customers have two things in common: They’re all wholesale customers, and they all need towing equipment. Chances are you’re already getting some of this business, but if you’re not actively soliciting it with a clear-cut mission and program, you’re not getting anywhere near the volume you could (and should) be.

Though there’s certainly additional sales volume and profits to be gained, obtaining these customers and making the sales may require an adjustment of your expectations. For starters, you’ll likely have to adjust your profit margin expectations downward. Selling to wholesale customers typically brings about half to three-quarters the margin that retail selling brings. That’s OK, though; the loss in profit margin will be offset by the increase in steady cash flow, as well as the broadening and diversification of your customer base. In short, these sales tend to smooth out the cash flow bumps of the slower seasons, and keep the shop busy with installation and repair labor in the down time.

To mitigate the effect of any lower profit margin, try negotiating a better deal with your suppliers. Placing larger orders, stocking a bit more or committing to fewer suppliers (thus raising your purchase volume) will bring about a better acquisition cost, thus pushing profit margins a bit higher. Discussing a wholesale business plan with your suppliers, ensuring that they understand your shift from pure retailer to quasi-wholesaler, should help to convince them that you need a sharper deal.

Adjust your marketing efforts

You’ll also need to be more creative and aggressive in your marketing and selling efforts. Here’s where you can – and need –  to get very innovative. Creating a flier/mailer for car dealerships, for example, is not as easy as it sounds.

First, study the local dealerships and note which ones are single-brand vs. multi-line. Then, create customized fliers for each dealership, highlighting the hitches, T-connectors and other items that are specific to that brand. If you’re offering installation, be sure to note that in the flier. And don’t be shy about promoting the professionalism the dealer can count on when he uses your installation services. Don’t just list the hitches and wiring products for each dealer’s brand, though; car dealers also will sell accessories for you, if they know you have them and are offering a competitive price. On your flier, list several popular types of accessories (brake controllers, cargo carriers, bike racks, hitch balls and ball mounts, hitch locks, front-mounted hitches, etc.).

Make these available options for dealers, and you will see sales grow.

For marine and powersports dealers, promote your installation service and how much you have in stock, ready to install. When marine dealers sell a boat package, they need to know that they can send their customer to you for a towing package on the spot and that the customer will be taken care of quickly. The trick is to ensure that they understand that the hitch and towing package will be ready as quickly as possible so they don’t have to worry about the customer’s inability to tow his new boat, potentially nixing the sale.

The heavy pullers

For landscapers and other service contractors, as well as municipalities, state agencies and police/fire departments, obtain mailing lists from SIC code listings, Yellow Pages, the Internet and state agencies, and create an attractive mailer that clearly advertises your ability to serve these customers with the towing products they need and use most.

This crowd typically uses the heaviest-duty Class IV or V hitches and the “work truck” accessories that go with them, for example pintle hooks and mounts, D-rings, pintle/ball combo hooks, seven-way connectors and adapters and brake controllers. Focus on these parts, and you’ll attract customers from these market segments.

To garner business from local and state agencies, schools and police/fire departments, the old saying “It’s not what you know, it’s who you know” holds true. Chances are that as a local business, you already play a part in your town and county. Make sure you’re in close contact with the police and fire chiefs, the state police barracks, the local school administrators, and the local and state politicians.

These contacts will prove invaluable for you when it comes time for these customers to order and outfit their new vehicles. Staying in touch with them, putting your business face in front of them, will pay dividends later when contracts for vehicle accessories are awarded.

Go for the ‘go-to’ quotient

Be prepared to do what it takes to “get in” with the types of customers described here. That may mean, for example, that when a local car dealer calls with an installation request or delivery, that you stop what you’re doing to take care of their needs immediately. Impress with quick response and excellent service, and you’ll become the “go-to” when they need help.

Follow-up is a huge component of obtaining and maintaining sales. With car dealerships, it pays to make monthly sales calls (even weekly or bi-weekly, depending on the market) to drop off fliers or to buy the sales and service teams coffee and donuts. It pays to make appointments with the sales and service manager for product training.

Typically, car dealerships have weekly sales and training meetings, and getting in as a vendor/trainer on these events will pay huge dividends for you later. Salespeople usually “hop” from one dealership to another, so it’s important that you keep up with this activity or you’ll lose your contacts at various dealerships.

Bring in the hitch manufacturer’s factory rep and/or trainer to make an even better impression, and ensure that the dealership’s sales staff is educated on towing and can make factual and accurate quotes and statements when selling towing packages to retail consumers. In the end, solid relationships with dealerships will ensure that you have steady business, even when retail sales are sluggish.

Follow up is also key for landscapers, contractors and other trades operations. For example, most areas typically host landscapers’ shows and events, where local vendors display products that these customers use every day. Sign up and display at these shows and you’ll quickly become a presence in this segment. Stock the items they use (e.g., heavy-duty towing goods) and keep them in good supply; you’ll have a good customer base that comes to you first because you have the goods they need.

For marine and powersports dealerships, consider hosting “towing safety” seminars on off-season evenings to bring in their customers for an educational experience on towing. Advertise it well beforehand, work hand-in-hand with the dealership, and provide refreshments and door prizes; the results will stimulate sales and bring customers to your business as well as promote sales at the participating dealer. You’ll both win.

About that new customer base

Following these suggestions takes time, effort and a little ingenuity. The results won’t come right away, but in time your business will grow, and grow substantially, by aggressively addressing these customers segment by segment instead of waiting and hoping that they’ll come through your door.

Yes, you’ll invest more up front, and net a bit less per item on the wholesale side, but in the long run your business will grow both the top and bottom lines by reaching out and grabbing customers before your competitors do.