The third is that the group ended a three-year relationship with Mitsubishi in 2009. It had added that franchise to its Bury Honda site in 2006, just months before Cambridge Honda came up for sale, and initially it worked. But the construction companies and farmers who had been good customers for the L200 pick-up stopped buying after the credit crunch of 2008 and Banks, used to the reliability of Honda and Suzuki models, wasn’t happy with Mitsubishi’s product quality or profitability.
“It’s very easy to run a motorcycle business if you’re good at selling cars. It’s about customer expectations – they’re lower with motorcycle customers. We treat them as the same customer, whether it’s a car, motorbike, or service or repair, and they’re not normally used to that.
“In this industry you’ve got to have good people, good systems and look after your customers. It’s as simple as that. Our core team has been stable although we move people between the branches sometimes, otherwise they get stagnant. We pay good money, and there are incentives set on the things they can change themselves.”
Today the two-wheelers account for about 300 units of John Banks Group’s 2,000 new vehicle sales annually. Honda cars are its largest source of business, at about 1,200 units from its Bury, Ipswich and Cambridge dealerships. Suzuki, which it has represented since 1997 with sites in Bury and Ipswich, accounts for 500 units. It also sells about one used car for every one new across the group.
“Why we put bikes in, when we restructured our business in 2009, and what we want in order to go forward with the business, is to bring in new customers. We’ve a live, cleansed database of about 11,500 customers and we need to build on that,” Banks said.
Those customers are a diverse bunch due to the territories the group operates in. Ipswich has an above average proportion of unemployed and low-paid workers in rented houses, while Cambridge has an above average level of highly skilled, highly paid workers with their own homes. Blanket marketing tactics don’t work across all three.
Nevertheless, thanks to its long relationship with Honda and an emphasis on satisfying customers, John Banks Group has a local market share of 12-13% compared with Honda’s national share of 2.6%. With motorcycles, it has a 24% share.
Both Honda and Suzuki have endured a few difficult years recently, with delayed new model introductions and the strength of the yen impacting on the franchises and market opportunities. Banks said he’s pleased that Suzuki is fighting back into the market now the yen has weakened.