The Market Was Down 21%. Spirit Motorcycles Didn’t Just Survive—They Got Stronger.
In San Jose, California, dealerships were hit hard last year. The regional market dropped 21% in major unit sales, and for many, that meant scrambling to stay afloat. But at Spirit Motorcycles, something different happened.
Despite experiencing a $1.8M revenue decline (15% YOY), the dealership increased its net profit by $20,000 (3% YOY). While others were watching margins shrink, Spirit was getting healthier, more efficient, and more profitable.
How?
They shifted their focus away from just selling more units and zeroed in on the customer ownership experience. They worked with Ownex to undergo a DELV (Dealership Enthusiast Lifecycle Value) analysis, a data-driven approach to uncovering inefficiencies, optimizing operations, and re-engaging their existing customer base.
"The market was going down. If we didn’t make a change, we would’ve gone down with it," said Martin, owner of Spirit Motorcycles. "The Ownex DELV analysis helped us reframe how we looked at our dealership. We weren’t just fixing problems—we were building a better, more profitable business for the long run."
The Turning Point: Focusing on the Right Customers
Before the DELV analysis, Spirit’s team—like many dealerships—was caught in the constant chase for new unit sales. But the study uncovered something game-changing: customer retention was the real profit driver.
Here’s what they found:
Loyal customers spent more money, more often. Spirit’s most engaged customers visited service 2.5x more frequently than the average.
Small ELV changes = big financial impact. A 1% increase in Enthusiast Lifecycle Value [ELV] ($4,143 to $4,184) led to a 9% increase in gross profit margin.
Service efficiency was the key to profitability. By optimizing service workflows, technician proficiency jumped from 42% to 68% in the first 3 months and are now operating consistently above 75%.
"We took a hard look at how we were operating," Martin said. "We had to get real about what was working and what wasn’t. The DELV study helped us pinpoint exactly where we were leaving money on the table."
From Chaos to Control: The Changes That Made the Difference
Armed with clear insights, Spirit Motorcycles made bold moves:
Reorganized the service department—Cut underperforming techs, optimized scheduling, and switched to a flat-rate pay plan, leading to a 91% increase in tech efficiency within the first month.
Reduced inventory exposure—Cut unit inventory by 30% and lowered flooring costs by over $330K, making the store financially leaner and stronger.
Prioritized service retention—Shifted focus to proactively keeping customers engaged in post-sale service, improving the dealership’s customer satisfaction index (CSI) dramatically.
Reworked staff compensation—Moved from a revenue-based to a profit-driven commission model, aligning incentives with dealership success.
"I’ve never seen a store fix things this fast," said Max from Ownex, who led the DELV study. "They took the recommendations and ran with them. A year later, they have lower revenue but higher profit. That’s what a healthy dealership looks like."
Why This Matters for Every Dealer
Spirit Motorcycles’ success isn’t an isolated case—it’s proof that focusing on ownership experience, rather than chasing short-term sales, is the future of dealership profitability.
Many dealers today are facing shrinking margins, slowing unit sales, and rising costs. The old playbook of stocking more inventory and hoping for sales doesn’t work anymore. The real key is engaging the customers you already have and making every transaction count.
"Healthy dealerships create happy employees, happy employees create better customer experiences, and better customer experiences create higher profits," Max explained. "This is the ecosystem dealers need to be building."
Want to Know Where Your Hidden Profit Is?
Spirit Motorcycles proved that even in a tough market, a smart operational strategy beats revenue growth alone. So ask yourself these important questions:
Are you leaving money on the table?
Is your service department operating at full efficiency?
Do you know what’s driving your best customers back?
Find out where your dealership stands by taking the free Ownex Dealer Assessment at Ownex.io. Get your score, identify key opportunities, and start optimizing your dealership for long-term profitability today.
