How to save industry-wide boat sales

mikehoffmanjpg1By Mike Hoffman, owner, Marine Center of Indiana I used to be in the medical business, and back then, I told people that "I sell something that none of my clients really want, but they all need." Now I own a dealership and I enjoy telling people that, "We sell something that everybody wants, but nobody needs." So as I begin this rant, please, let's not forget that a boat is nothing more than a toy. We, as one industry, cannot control the economy. We cannot control the banks. We cannot control who gets to or wants to buy a boat. But we can control the way we operate our businesses, and through that, we can certainly deliver to each and every precious customer the experience that they deserve through boating.

With boat sales at their lowest point in decades, and the quality of our customers having to be higher (due to tighter credit and fewer people working) we need, now more than ever, to do the best we possibly can to ensure that these customers tell their friends that the best two days of a boater's life are every Saturday and Sunday, not the day you buy and the day you sell your boat. And the problem with today's circumstances, as I see it is that we are, at lightning speed, destroying all customer satisfaction along with the enjoyment of boat ownership.

Let me give you an example. I had a customer come in to purchase a 21-foot boat. The customer tells the salesperson, "If you can get me that boat on your floor with a bimini top on it, I will write you a check for it." We took him to the finance office, and he decided to finance the payments through us, which increased our profit on the deal.

In normal times, we would call the manufacturer and have the top within two weeks, and the deal would be done. In this scenario, however, we called the manufacturer before realizing that we were calling during the company's furlough week. So we waited a week before we followed up to make sure they received our order. The following Thursday, now two weeks after the order, we finally received a call back from the manufacturer. Why that long after the order? Because the manufacturer now has so few people in its parts department that it takes them that long to get caught up. We then find out that the top will have to be ordered.

Then the problem really begins because the boat manufacturer doesn't actually make the bimini top for the boat I have sold. They source it out to another company. And guess what? Now it's that company's furlough week. They get back the following week, now four weeks since I ordered the part, and start going through their orders, only to realize that they don't have the stainless-steel frame in stock for the bimini top. And now the company that makes the frame is on their furlough period.

Two weeks later, now six weeks since the part was ordered, we can now get the top, but no one followed through from the frame manufacturer to the boat manufacturer, to find out that they don't have the canvas to put on the frame. And, oh by the way, there are only two parts people for all of that manufacturer's dealers, worldwide, so we can't get a call back or even an e-mail to tell us any information about when we can get the bimini top for the customer.

But, one week later, now five weeks since the order, the canvas finally arrives at the bimini top manufacturer, but we as a dealer don't know that because the boat manufacturer is now on their next month's shut down...

Do you understand the point here yet? Didn't anybody think, in this world of just-in-time inventory, to get together to try and coordinate when these businesses should all be closed to try and take care of the customers we have left?

Unfortunately, this isn't an isolated incident. I have multiple examples of these types of things happening. I have a boat in here with upholstery that was damaged in a tornado. It's been here since September, and I still don't have the parts. I have an upset owner of a $600,000 boat because it took the manufacturer three weeks to get him a new compressor system for his air conditioning. I have another boat, purchased for $79,000, and it has been 10 weeks (so far) trying to get this thing resolved. The gauge manufacturer has now sent three sets of gauges. The boat manufacturer sent a new partial wiring harness. The engine manufacturer says it is not a compatible system with the engine. And there have now been four conference calls between all three and my service director and the service tech diligently trying to get the customers new boat on the water. I just refunded a $20,000 down payment on that boat.

It just seems to me that the time has come to stop finding blame with what is wrong with our sales numbers and figure out what we can do to save what we have left. There is really no way we can control or fix a lot of the problems we are facing today. But we can control the way we operate our businesses. And we can control the experience that we're providing our customers. But if we sit back and continue to run our businesses in the manner described above, we will have burned so many potential customers that our sales will continue to plummet well after the economy turns around.

By the way, as I sit here and write this on the Friday of Memorial Day weekend, it has been 9 weeks, and I have yet to receive the bimini top. You can imagine how happy my customer is...

7 comments

  1. Great Blog post. I am going to bookmark and read more often. I love the Blog template

  2. What a frightening and I fear very plausible result of survival over customer service. Just what our industry doesn't need...another step backward.

  3. MIke Hoffmann's blog is something more people in any business need to hear more of. Thanks for your honesty.

    I am in the plastics machinery business and 20 or so years ago I worked for a German company. They shut down tight for three week in the summer and it was impossible to get a fax or wire into them. When they came back from vacation it took weeks to catch up.

    That practice has stopped in Europe as they learned they must COMPETE against people from around the world who provide better services.

    The same holds true in the boat business. Boat dealers COMPETE against every other reason to spend fun time money. Sports cars, airplanes, sporting goods, vacations, etc, etc.

    Every department in any business must compete, not just the salesman trying to secure a sale. Engineering, service, spare parts, production, etc, must understand that they all have serious competition.

  4. This has been going forever in this industry. when people want toys they want them now. what a crazy thing to furlough and shut down parts and service departments in the middle of the season. talk about a nightmare. the other one i love is there is virtually no way to demo a boat to see if i like it or not. there are so many opportunities for a new line of thinking in this industry.

  5. Well, anytime anyone needs new or repaired upholstery, bimini top, custom furniture or canvas to get their boats sold, just let me know.

    I'm sure there are others like me in each of your territories who could have taken care of those problems immediately. Why? Because, like you volume is down everywhere and the little guys will jump through hoops to make you and your customers happy.

    Why wait for the manufacturer to sub something out. You're placing your business in the manufacturer's hands and they are placing it in people you have ZERO relationship with. Build your own local relationships so the little things don't eat you up when you have a problem to solve.

  6. I can believe it when you say you were in the medical business.
    Dale's comment hits the nail on the head. There you are thinking that the only relationship that maters is that of cheaper cost and higher profit, when there were no doubt craftsmen/women in the neighbourhood who could have sorted out your problems and helped keep your customers happy.
    Moral of the story? If you want a boat, buy it from a boatbuilder, not a showroom.

  7. While customer service and responsiveness from dealers are key, selling boats is what will keep the industry afloat and prevent further reductions in staff and parts inventory that lead to many of the problems referenced here. Buyers have to be motivated to purchase a boat, and with the current economic times, price is a huge motivator. Great deals on new boats are available, at ultimateboatsale.com is a good place to find them.

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