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Re: Cervelo - actual facts [Floyd5k] [ In reply to ]
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Floyd5k wrote:

Being a customer doesn't give you or me the right to ask all sorts of intrusive questions. Get over that sense of entitlement.


Well said.......[/quote]
I'd like to hear that from a small Cervelo LBS. If all parties think the promotion is a good deal, then count me in. Not my experience thus far.

And for the record, while I may not be "entitled" to know if I am screwing an LBS by participating in the promotion, I won't do it if I think that is case. I asked my questions to find out if the LBS would be hurt by the deal. Nothing more, nothing less.
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Re: Cervelo - actual facts [cincytri] [ In reply to ]
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I don't think that you will ever get the answer that you are looking for. It's a no win situation for Cervelo to come here and get into a he said/she said thing with you or a LBS. It would never end. They would answer a question, 100 people would follow up with more questions, and the cycle would never end. Somebody like you would then come in an criticize them for not answering all of the questions or all of the questions in the manner that you think should be answered. Cervelo should not spend their time doing such trivial things. If a LBS really has issues with Cervelo, they have the mechanisms to handle that instead of bad mouthing Cervelo to a bystander customer. It's like bad mouthing the mother of your children during a divorce. No one really wins and the children (customers) are left with even more issues and questions than before.


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Re: Cervelo - actual facts [zoom] [ In reply to ]
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zoom wrote:
I don't think that you will ever get the answer that you are looking for. It's a no win situation for Cervelo to come here and get into a he said/she said thing with you or a LBS. It would never end. They would answer a question, 100 people would follow up with more questions, and the cycle would never end. Somebody like you would then come in an criticize them for not answering all of the questions or all of the questions in the manner that you think should be answered. Cervelo should not spend their time doing such trivial things. If a LBS really has issues with Cervelo, they have the mechanisms to handle that instead of bad mouthing Cervelo to a bystander customer. It's like bad mouthing the mother of your children during a divorce. No one really wins and the children (customers) are left with even more issues and questions than before.

You are probably right. I will likely never know the how's and why's of this promotion. However, I don't think that being upfront and forthright would be bad for Cervelo. Unless, of course, the details are as bad as what is reported.

And you are right, my questions and concerns are trivial in the big picture for Cervelo. However, I never felt that way with Moots. I have a couple of their bikes- go figure!!
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Re: Cervelo - actual facts [cincytri] [ In reply to ]
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its not that your concerns are trivial man, this is just the wrong forum, wrong person to ask.

you contact cervelo directly, by phone, on their forum, by email.

mother of science people just love to manufacture conflict



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Re: Cervelo - actual facts [jackmott] [ In reply to ]
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jackmott wrote:
its not that your concerns are trivial man, this is just the wrong forum, wrong person to ask.

you contact cervelo directly, by phone, on their forum, by email.

mother of science people just love to manufacture conflict

Pump your breaks there jackmott. Gerard came on here to "set the record straight" with actual facts. Shop owners and employees have posted their opposition to this deal on this forum. I'm simply asking for an explanation, on the same forum, on a couple of details that were not included in posts by Gerard, shops and customers. Seems to me that a variety of involved persons chose this forum to discuss Cervelo, including a co-founder.

I didn't manufacture this "conflict" (if there even is one). To the contrary, I am asking for the details to hopefully put it to bed.
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Re: Cervelo - actual facts [jackmott] [ In reply to ]
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jackmott wrote:

mother of science people just love to manufacture conflict

And beat a dead horse... To death...again!



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Re: Cervelo - actual facts [cincytri] [ In reply to ]
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cincytri wrote:
jackmott wrote:
its not that your concerns are trivial man, this is just the wrong forum, wrong person to ask.

you contact cervelo directly, by phone, on their forum, by email.

mother of science people just love to manufacture conflict


Pump your breaks there jackmott. Gerard came on here to "set the record straight" with actual facts. Shop owners and employees have posted their opposition to this deal on this forum. I'm simply asking for an explanation, on the same forum, on a couple of details that were not included in posts by Gerard, shops and customers. Seems to me that a variety of involved persons chose this forum to discuss Cervelo, including a co-founder.

I didn't manufacture this "conflict" (if there even is one). To the contrary, I am asking for the details to hopefully put it to bed.

He came here to "set the record straight" re: PON. He then specifically said he did not know the details of the sale since he was no longer involved with the day-to-day operations. So don't distort why he posted.....it had nothing to do with the promotion.

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Re: Cervelo - actual facts [cincytri] [ In reply to ]
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"He provided a couple of details regarding the frameset compensation and how he'd be losing money on the deal. We've heard from several ST'ers that their shop would not be a part of the promotion because it is bad for business."

i know that some of cervelo's dealers think the promotion is a bad deal for them. i also think these are likely the marginal dealers. the idea is to get rid of the old inventory, and get ready for the new. cervelo needs to make room for S5s, P5s, etc., and it can't do that if there's too much inventory on shelves. note that the larger, stronger dealers are happy to share their inventories right on this forum, because they understand this.

the frameset these dealers are getting as consideration does not have to be sold at MSRP. it's going to be sold as a built bike, spec'd however the dealer wants to spec it. if you slap campy chorus on it you can sell the entire unit for whatever you want, because there's no price analog on cervelo's own page. that's the beauty of having consideration come in the form of a frame rather than a complete bike. these frames should not be hard to liquidate.

what's tough for the retailer is this: the compensation is deferred rather than immediate, and getting the margin requires three sales instead of one. in this sense, yes, it's rough for the dealer.

but any inventory clearance is rough for the dealer. your LBS should be able to punch out what his blended margins per bike line for the year. by blended i mean he might make X points on a bike line when he sells at MSRP, then something less than X on inventory closeout, and the blend is what matters to him. historically, cervelo has provided these dealers a whopping blended gross margin, and it's also provided a whopping sum as the average revenue per transaction. cervelo, as a brand, has been golden for retailers for the past half-decade and more.

so, when a retailer starts to grouse about cervelo or, for that matter, trek, specialized, orbea, cannondale, giant, felt, these are premium brands that form the backbone of a retailer's business. if i were phil and gerard, i would take note and remember any retailer who publicly groused about this program. but that's because i'm a little more vindictive than these two guys, and that's probably a part of why their bike business grew to be much larger than mine did when i ran it.

i think a part of why cervelo grew so fast so quickly is because of the even-keeled nature of these guys. if you consider bikes sold above $2,500, cervelo is not far behind trek and specialized in total revenue, and there are very few bike companies bigger than cervelo worldwide. yet the co-owner comes on this forum board and greets his customers. i don't notice anybody with the last name of colnago, or andy rihs from BMC, coming on any of these forum boards to talk about their brands when questions were asked.

not that they need to. it's just one reason why cervelo has the brand cache it has. i think it's worth noting that there are bike (and helmet, and shoe, and wheel, and wetsuit and apparel) dogs who do not consider themselves royalty, regardless of how big their companies get, and who are willing to meet and greet their customers and answer their hard questions face to face.

i once heard one wise businessman say to another: "if you think your business has grown too big for you to communicate directly with your customers, don't worry. it'll soon be the right size."



Dan Empfield
aka Slowman
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Re: Cervelo - actual facts [cincytri] [ In reply to ]
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cincytri wrote:
I think it is fair to say at this point that the customer is squarely in the middle of this deal. Customers, it seems, have to make a choice between doing the right thing for their own pocketbooks or what is right for the small LBS who sells Cervelo.

Not really. You can apply that same logic and ask how much Cervelo sells their frames to the dealers for. After all, you don't want to put pressure on a small dealer by buying a frame for which he isn't getting adequate return.

Actually, I see the point you are trying to make. However, I disagree that customer involvement is needed. I daresay that bike dealers can work out any issues they have with Cervelo on this directly with Cervelo, without the peanut gallery getting involved. If the deal is indeed bad for dealers in general, I am sure Cervelo will face the repercussions later. Either way, this matter remains between them and the dealers.

If you really want to know, ask your dealer. If they have a reason to share the details with you, they will. Cervelo absolutely doesn't.

And btw, sorry if my earlier post came across as aggressive - I wasn't having a go at you, merely trying to make a point forcefully.


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Re: Cervelo - actual facts [cincytri] [ In reply to ]
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I'm not a dealer but this isn't that hard to figure out:

C runs a promotion for $1000 off for consumers to buy product.
If customer buys $10,000 retail bike @ $1000 off, dealers margin is not impacted too bad.
If customer buys $2500 retail bike @ $1000, dealer probably loses money on the sale.
C compensates dealer with a frame to make up the shortfall.
Dealer doesn't make back margin hit until he sells frame.

Some dealers are happy, some are not.
Make sense?
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Re: Cervelo - actual facts [Slowman] [ In reply to ]
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As usual , Dan nails it.

Having worked in this business for a long time myself, I can assure you that not everything you do pleases everybody. No matter what sort of promotion you run, there will be people ( retailers in this case) who don't buy into that. It's rare to get 100% buy-in on anything these days. Consequently, there will be nay-sayers and non-supporters out there.


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Re: Cervelo - actual facts [Slowman] [ In reply to ]
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"the frameset these dealers are getting as consideration does not have to be sold at MSRP"

This settles the matter for me. An LBS should be able to float a couple of hundred bucks for a few months and make a nice profit later on with the sale of the R5VWD frameset/bike given the ability to sell it at their discretion. Sounds like a total win for everyone involved. Customers benefit at the point of sale, Cervelo moves inventory to get their new line out, and LBS make a living. Exactly as it should be. Thanks for putting this to rest.
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Re: Cervelo - actual facts [Power13] [ In reply to ]
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Right. None of the Cervelo buzz as of late had anything to do with the promotion. Gerard addressed what he wanted to address and that is his right. Slowman, who is not a co-founder of Cervelo, filled in the rest. As it turns out, the "rest" looks pretty good for Cervelo IMHO. Like I said, it is a win-win-win. Why Cervelo wouldn't want to be the messenger on that fact is a question better left to the experts.
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Re: Cervelo - actual facts [Ex-cyclist] [ In reply to ]
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"And beat a dead horse... To death...again!!"

Yeah, not really. The horse died when Slowman put it down. Until then, I might have been guilty of beating a horse, just not a dead one.
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Re: Cervelo - actual facts [guadzilla] [ In reply to ]
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"Not really. You can apply that same logic and ask how much Cervelo sells their frames to the dealers for. After all, you don't want to put pressure on a small dealer by buying a frame for which he isn't getting adequate return."

I wouldn't do that- that would be, IMHO, tasteless. I wouldn't have even cared about the whole thing if I hadn't heard it from a dealer's mouth and from others on ST. At any rate, Slowman cleared it up- favorably for Cervelo I might add.
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Re: Cervelo - actual facts [gerard] [ In reply to ]
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gerard wrote:
Not trying to dismiss the competition, obviously Cervelo has some powerful competitors and bike design across the board has tremendously developed in the last decade. I just wanted to indicate that bigger is not always better, especially if it means you can't focus on just one thing but have a lot of pots on the stove.

Gerard, you know better that the larger companies have specific divisions/groups of people that cater to that specific pot on the stove. Just because you are a big company doesn't mean you can't focus on one thing and be very competitive or an industry leader...give me a break. I would definitely disagree with that statement because you have more competition now then ever before. The competition is good and hopefully it just keeps pushing the envelope so everyone gets to see more and more trick bikes hitting the market.

I wish your company would have at least shown a picture of the P5 the past few months, so I could have made a decision to purchase a Cervelo P5. However, since there were too many unknowns about the bike and 2012 is already here, I went with a Project One - Trek Speed Concept (who has too many pots on the stove to make a good product, right). Obviously my timing to buy a bike really doesn't matter, but when you are late to the market when all the new bikes are already out....I'm sure it will impact your sales some. Releasing a picture of the bike, etc. would have helped create more excitement or buzz. However, you aren't in the marketing department so I guess you don't know anything about this type of stuff.
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Re: Cervelo - actual facts [motoxxx] [ In reply to ]
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motoxxx wrote:
gerard wrote:
Not trying to dismiss the competition, obviously Cervelo has some powerful competitors and bike design across the board has tremendously developed in the last decade. I just wanted to indicate that bigger is not always better, especially if it means you can't focus on just one thing but have a lot of pots on the stove.

Gerard, you know better that the larger companies have specific divisions/groups of people that cater to that specific pot on the stove. Just because you are a big company doesn't mean you can't focus on one thing and be very competitive or an industry leader...give me a break. I would definitely disagree with that statement because you have more competition now then ever before. The competition is good and hopefully it just keeps pushing the envelope so everyone gets to see more and more trick bikes hitting the market.

I wish your company would have at least shown a picture of the P5 the past few months, so I could have made a decision to purchase a Cervelo P5. However, since there were too many unknowns about the bike and 2012 is already here, I went with a Project One - Trek Speed Concept (who has too many pots on the stove to make a good product, right). Obviously my timing to buy a bike really doesn't matter, but when you are late to the market when all the new bikes are already out....I'm sure it will impact your sales some. Releasing a picture of the bike, etc. would have helped create more excitement or buzz. However, you aren't in the marketing department so I guess you don't know anything about this type of stuff.

Really?! I seem to recall a small company by the name of Apple that employs the same marketing strategy and they've had a slight modicum of success. Just because it isn't good for you doesn't mean it's not a good business strategy.
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Re: Cervelo - actual facts [cincytri] [ In reply to ]
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Well I have a question for you. Do you follow these principles in all your bsiness dealings? If you want to buy a Ford, and the dealership is unhappy with Ford, do you not buy the car. If sports company decides to carry a brand of gps and is not as happy with that distributer, do you refuse to buy? .......I am not judging your buying decisions, just curious if you follow out what you are proposing on bikes are you consistant acroos the board.......If so ......Props to you........My guess is you buy products all the time where there is disagreement between the distributer and retailer
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Re: Cervelo - actual facts [Slowman] [ In reply to ]
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Slowman wrote:
"He provided a couple of details regarding the frameset compensation and how he'd be losing money on the deal. We've heard from several ST'ers that their shop would not be a part of the promotion because it is bad for business."

i know that some of cervelo's dealers think the promotion is a bad deal for them. i also think these are likely the marginal dealers. the idea is to get rid of the old inventory, and get ready for the new. cervelo needs to make room for S5s, P5s, etc., and it can't do that if there's too much inventory on shelves. note that the larger, stronger dealers are happy to share their inventories right on this forum, because they understand this.


Great post, Dan. And great thread.

I just wanted to add that this deal might not just be bad for the margin dealer. It might also be bad for any shop that specializes in triathlon, for example. Losing a P3 and gaining a R5 might be a difficult thing to swallow.

Granted, this probably doesn't apply to most shops, but I know one for which this does apply. Just wanted to offer another point of view...



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Last edited by: AndyF: Dec 31, 11 12:23
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Re: Cervelo - actual facts [Kenney] [ In reply to ]
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Kenney wrote:
Well I have a question for you. Do you follow these principles in all your bsiness dealings? If you want to buy a Ford, and the dealership is unhappy with Ford, do you not buy the car. If sports company decides to carry a brand of gps and is not as happy with that distributer, do you refuse to buy? .......I am not judging your buying decisions, just curious if you follow out what you are proposing on bikes are you consistant acroos the board.......If so ......Props to you........My guess is you buy products all the time where there is disagreement between the distributer and retailer


Two part answer:

1. I don't have the same type of relationship with a car dealer as I do with my LBS. I never ride after work with a car dealer or hang out in a dealership. Not really the same or fair comparison. I will say that if I go to a Ford dealer and they are down on Ford, I move along to either another dealer or another brand. Nothing much good can come of a transaction there. Depends on how much I want a Ford and how close I am to the Ford dealer. I get what you saying and your point is valid. I definitely care more about bike shops than I do about most other businesses. I am sure that I am hypocritical in some of my personal business whether I recognize it or not. If that is what you are suggesting about me, then I guess you got me.

2. Having said the above, I certainly don't make it a practice to participate in the demise of small businesses- bike shops included. This is a rather unique situation given that the dealers are the ones saying the promotion is bad for their stores. Kindof a case of first impression for me honestly. I'm not really a deal seeker either. If a deal is offered, then I'm all ears.

Anyway, the point is probably moot at this point. Given the permission to sell the R5VWD frame at below MRSP, I honestly don't know why the LBS's are down on this promotion.
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Re: Cervelo - actual facts [cincytri] [ In reply to ]
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Thanks for the answer........................................
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Re: Cervelo - actual facts [motoxxx] [ In reply to ]
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1) I stated that being a large company CAN lead to unfocused efforts, not that it always will. But the example you give of Trek perfectly proves my point. Their Speed Concept is a great effort, not miles ahead of the rest of the world as they claim but slightly behind the best bikes on the market according to TOUR. At any rate, a good product. Then go back in time and see when the previous good TT bike (technically and commercially) was launched. You'd have to go pretty far back, because the focus wasn't on that niche in the years in-between.
2) Of course a large company can have different pots on the stove and focus on all of them, in theory that is possible. Especially if they run them all as separate divisions. Unfortunately, that's not what usually happens. In the end, it's often one board that signs off on projects. Take the basic idea on whether or not to spend money on developing a new project. It's not that project's division that decides that, it's usually the overall company's board. Which means that if they are really hurting in one area of their business, the focus is on that and is diverted from other areas.
3) Bike companies aren't as big as you make them out to be, there is no TT/Triathlon division at any large company that can function as an independent mini-company taking on Cervelo. There are the same or more engineers at Cervelo as there are in the big bike companies, and the latter have to be spread over many more projects so they get shifted around from one project to the next. Sometimes that's in triathlon, often it is not. Compared to engineers who are always focused on the same type of project, that warrants the analogy of the pots on the stove.
4) The big companies are relatively so understaffed with engineers that for example the lay-up optimization work that Cervelo does in-house, Specialized cannot do themselves. They have to go outside to McLaren to get engineers to do it for them - ironically with the same software tools that Cervelo has in-house. Don't take my word for it, just read Specialized's marketing materials.

Regarding the idea of showing new products in advance, We usually don't do that and I'm completely comfortable with that. It does sometimes work out negatively in individual cases such as your own, but overall it is the best strategy for us.

As for being late to the market, I think that's all relative. Having the newest bike is not that interesting, we know a certain company will always win that race because they bring out a new but essentially identical bike almost twice a year. The key is not to have the newest but to have the best bike, and independent tests show that Cervelo still wears that crown despite the advent of "newer" bikes. I personally believe more in introducing bikes when they are ready and when they offer a significant advantage over what is currently available, not when "the market" demands them regardless of whether a real improvement is offered. The latter may work in the short run, but eventually consumers figure out that these new bikes aren't better and it will turn against those companies.

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Re: Cervelo - actual facts [gerard] [ In reply to ]
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"The key is not to have the newest but to have the best bike, "

yup.

customerjon @gmail.com is where information happens.
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Re: Cervelo - actual facts [Mr. Tibbs] [ In reply to ]
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Which in my view also applies to the consumer. It's better to be obsessed about having the best ride (as in going out riding) than about having the newest ride.

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Gerard Vroomen
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