Aaron Zeigler becomes powerhouse in powersports

on Sep6

KALAMAZOO, Mich. — In the summer of 2015, car dealer Aaron Zeigler grew frustrated with the lousy service he received at a western Michigan powersports dealership where he was trying to buy a snowmobile.

The experience inspired one of the latest revenue streams for the always opportunistic Zeigler.

“I was talking to one of my guys and I said, ‘I ought to go buy the place.’ He said, ‘My wife’s the controller; they’d probably sell it. They’re struggling.’ So he set up a meeting and I bought it,” recalled Zeigler, 44, president of Zeigler Auto Group and Zeigler Motorsports here.

That fall, Zeigler closed on his purchase of M&M Motorsports in Kalamazoo, a college town about a two-hour drive west of Detroit. The renamed Zeigler Motorsports soon was selling 100 vehicles a month, up from 40 before. The sales growth inspired Zeigler to build a store on 70 acres where a General Motors stamping plant operated until 1999.

Zeigler Motorsports stands on 70 acres where a General Motors stamping plant operated until 1999. Photo credit: TOM WOROBEC

Besides the store, he built four off-road trails and a 200-seat restaurant and bar. He borrowed best practices from his car dealerships to boost sales to about 200 vehicles a month now.

Zeigler Motorsports shares many synergies with Zeigler Auto Group. Each boosts the other’s sales and helps save costs. Zeigler also has created new revenue streams such as an online parts business and a training company.

“It’s taken a life of its own, certainly, but you keep coming up with new ideas and you want to try them and keep pushing it,” Zeigler told Automotive News. “We wanted to do something really different, kind of epic.”

Zeigler Auto Group ranks No. 64 on Automotive News’ list of the top 150 dealership groups based in the U.S., with retail sales of 14,378 new vehicles in 2016.

This year, the combined revenue of Zeigler Auto Group and Zeigler Motorsports will total nearly $1.1 billion, with $40 million of that from the sale of powersports vehicles and parts, Zeigler said.

Zeigler’s empire






Business Expected annual revenue
Zeigler Auto Group (23 rooftops in 4 states) $1.06 billion
Zeigler Motorsports, Cycle Parts Nation $40 million
Elevate Leadership and Team Building Academy Multimillion dollars
Restaurant, bar $1.2 million

 

When Zeigler started running the auto group in 2003, it had five dealerships. Today, there are 23 stores in Michigan, Illinois, Indiana and New York.

Zeigler grew up in Michigan and enjoyed snowmobiling and driving all-terrain vehicles during his youth. Later, “I raced Jet Skis on the pro circuit for about six years,” he said.

When he wasn’t playing, he washed cars at his father’s dealerships as a teen. Harold Zeigler started the company in 1975 with a Ford store in Lowell, Mich. The younger Zeigler, after graduating from Michigan State University in 1995 and then from NADA Academy, became a used-car manager, general sales manager, general manager and eventually president of the company.

Of the dealerships he added, only two were remodeled. Zeigler built new stores for the others.

The design of Zeigler Motorsports is inspired by outdoor recreation retailer Cabela’s. Photo credit: TOM WOROBEC

“Typically, when we buy an automotive dealership, the first thing we do is build a new facility,” he said.

Tracks and streams

He decided to do the same when he entered the powersports business, believing that a “cool facility” would draw in powersports fans from other states and Canada. So 18 months after he bought the business, Zeigler built an 85,000-square-foot Zeigler Motorsports store in an “A-plus” location off busy Interstate 94. He opened it in March. His strategy is working, he said, because the store has drawn people from throughout the U.S. and as far away as Vancouver, British Columbia.

Walking into the Zeigler Motorsports Superstore is an eye-popping experience. More than a dozen brands of motorcycles, snowmobiles, two- or four-person all-terrain vehicles known as side-by-sides, watercraft and powersports attire fill the store. A simulated mountain, 30 feet tall, looms over a cascading waterfall. Motorcycles dangle from the ceiling amid towering birch trees. Off to one side of the showroom sits the Sprinkle Road Tap House restaurant and bar. Every Tuesday night is Bike Night there; its tables spill out into the showroom as a band plays where a sales desk sits during business hours.

Zeigler drew his inspiration from outdoor recreation retailer Cabela’s.

“They had mountains coming out of the wall and waterfalls. Even if you’re not into hunting, you go there and you want to start hunting. It puts you into that mindset,” Zeigler said.

To put his customers into a powersports mindset, he built four outdoor off-road and motocross tracks that cover 4.5 miles. The concept came from his car dealerships. With trails on acreage just yards from the dealership’s door, Zeigler’s customers get something most powersports dealers do not offer: a test drive.

Customers also can buy a $25 annual trail membership and use the tracks for $20 a visit, then relax with a beer and a burger at his restaurant, he said.

With miles of trails just yards from the store, Zeigler Motorsports customers get something most powersports dealers do not offer: a test drive. Photo credit: TOM WOROBEC

“I wanted to create a destination for motorsports enthusiasts where they could come, buy and play in the same location,” Zeigler said.

Offering such convenience adds to sales. Last month, a man’s motorcycle broke down on one of the trails. Said Zeigler, “He brought it in, traded it and bought a new one and went right back out riding in the same session.”

Then there are the added revenue streams and cost savings as powersports and automotive help each other, especially in sales.

“One of my used-car managers said we’ve sold an extra nine or 10 used cars this year because people have motorcycles to trade in and before we didn’t have a place to get figures on them and do a trade,” Zeigler said. “Now we take them all in on trade in the motorsports dealership and they are able to buy from our new-car stores.”

Likewise, some powersports customers will travel a few miles to one of Zeigler’s stores selling trucks to buy a pickup to haul their new snowmobile, he said.

The customer crossover has made it easier to apply best practices from automotive to powersports. For example, Zeigler transferred a finance and insurance manager from a car dealership to powersports to introduce menu selling of F&I products at the store. Menu selling has resulted in a 70 percent increase in powersports F&I per vehicle revenue, he said.

Saying the powersports customer experience remains “15 to 20 years behind” that of the automotive experience, Zeigler applies automotive best practices in any way he can.

Above, Aaron Zeigler says crossing between the automotive and powersports worlds has helped him improve in both businesses. Top right, Zeigler Motorsports has 20 service bays with 11 technicians. Right, a wall shows the evolution of Zeigler’s operations. Photo credit: TOM WOROBEC AND JAMIE LAREAU

“When I used to go to buy motorsports [gear], I’d walk into a dealership and I wouldn’t get waited on,” Zeigler said. “In our car dealerships, we have greeters. So here we have a greeter and if you’re looking for sales or parts, she’ll connect you with that person.”

Service and parts

There are synergies in service, too. Zeigler Motorsports has modeled its service lane after those in Zeigler’s car dealerships. It has 20 service bays with 11 technicians. Zeigler saved about 25 percent on the cost of lifts by ordering extras for the powersports store when he ordered new lifts for a dealership he was building in Chicago.

Behind the service area is the used-vehicle showroom. Zeigler has enough Harley-Davidson motorcycles there, all taken as trade-ins, that he has opted out of owning a store selling new Harleys.

Behind the used showroom is on-site storage. Customers can store powersports vehicles, cars, RVs and even horse trailers monthly or by the year. The service is so popular that he is building an additional 14,000-square-foot storage building. Storage fees are based on square feet.

Finally, there is his parts business: Cycle Parts Nation. When the original version was run by M&M, it sold about $400,000 a month in parts, he said. Today, it stocks $2.5 million worth of parts and sells $1 million a month.

It operates as a distribution center with six loading docks for trucks to make same-day or next-day delivery of parts “shipped all over the world,” Zeigler said.

Here again, Zeigler applied his automotive dealership acumen. He reorganized the parts website to be more customer friendly, doubled the advertising spending to $80,000 a month and hired an online parts sales expert to run it.

Zeigler’s crossover between powersports and automotive worlds extends to employees, all of whom wear the same uniforms and logos, regardless of what part of the business they’re in. He says one reason to expand was to keep talent by offering his staff continued growth opportunities with his operations.

He has even blended his powersports store with his automotive trainers to launch a business that sells training to outside industries.

Next to it, in Zeigler’s business development center, six employees make service appointments for powersports customers, even offering free pickup and delivery service for customers up to three hours away.

Aaron Zeigler’s new sources of revenue include, from left, a restaurant and bar that are off to one side of the Zeigler Motorsports showroom; Elevate Leadership and Team Building Academy, a training center; and Cycle Parts Nation, a parts and distribution business. Photo credit: TOM WOROBEC

“Every business we get into, we learn different things and can apply those to going forward,” Zeigler said.

An entrepreneurial spirit inspires Zeigler, but a survival instinct drives him. “You look at all the retailers who are going out of business right now. What is going to keep a retailer like us in business?” Zeigler said. “It really comes down to having a unique, world-class customer experience. It starts with facility and then goes into the people that you have. Customers have that incredible experience and they’re going to want to repeat it again and tell other people about it.”



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