ll Steve Edwards wanted was a boat seat.
In the world of boats, one wouldn’t expect a seat to be difficult to come by. One wouldn’t think it would take two months for a boat manufacturer to deliver it. Edwards surely wasn’t happy that it did.
Edwards, though, isn’t your typical consumer. He knows first-hand that the dealer he ordered it through did his best to get the seat in a timely fashion. In fact, until just a few years ago, Edwards was that dealer. He sold boats made by the same manufacturer; he ordered replacement parts through the same unsatisfactory system. Unfortunately, though, Edwards knows that the typical consumer isn’t as understanding.
That’s why Edwards and Jerry’s Sport Service dropped that manufacturer’s line a few years ago.
You see, Edwards has been in business as a marine dealer for 28 years. He knows the consequences of making customers wait for two months, especially in the short boating season that they find in the upper Midwest.
“I used to experience it,” he explains. “But I don’t anymore because I changed from that company. I used to be their second-largest dealer in the country. I had met a dealer from the Northeast who was also their dealer, and he said basically the same thing to me. He asked me how I get parts from these guys. ‘All they want to do is sell you boats,’ he said. ‘There’s no service after the sale.’”
It seems as though, while this may be a small snapshot in the big boating picture, many dealers feel the same way that Edwards does.
Dealers’ opinions of working with their manufacturer partners are clearly
demonstrated in J.D. Power and Associates’ inaugural marine dealer attitude study, which shows “strained relations between marine dealers and boat and engine manufacturers.”
And while in-depth studies regarding these relationships may have been undertaken in the past, not until this year have dealers been surveyed by an objective third party.
The truth and nothing but the truth
If nothing more than just the interest from opposing parties, J.D. Power had quite a bit going for itself as it began this study.
The National Marine Manufacturers Association had processed its own survey results in the past; the Marine Retailers Association of America had done its own, as well. Even executed honestly and by the books, though, either survey could have been accused of being skewed, leaving the other side skeptical. The NMMA and other industry organizations backed this study wholeheartedly.
The need for the survey was recognized, and the manufacturer response has been positive. In fact, a group of the manufacturers approached J.D. Power last year and brought up the need to “make things better with our dealers,” according to Eric Sorensen, director of the marine practice at J.D. Power and Associates. Mix in the fact that there were some general correlations between the manufacturers who did well in J.D. Powers’ consumer study and those who did well in the dealer study, and one can witness the trickledown effect relationships have. To be sure, J.D. Power’s own understanding of dealer-manufacturer relationships also played a part in choosing to complete this survey.
“We got into the marine industry about two and a half years ago,” says Sorensen, “and … we quickly heard about the disagreements and disputes between dealers and manufacturers. There was a lot of consistency about what the dealers were dissatisified with; and there was a lot of consistency from the manufacturers’ perspective on where the dealers could do a better job.”
With that in mind, J.D. Power decided that the only way to find out the truth was to go to the source. Having already surveyed consumers on their satisfaction with the boating industry, J.D. Power and Associates went to the retailers to summon answers regarding their manufacturer relationships. Through an extensive Internet survey, more than 6,000 marine dealers were asked to assist J.D. Power in rating their satisfaction with and the importance they put on specific manufacturer attributes.
The results are in
If there were to be an executive summary of J.D. Power’s findings, it might be found in the leading sentence of the company’s press release: “Most marine dealers are not satisfied with their working relationships with boat and engine manufacturers.”
It’s true. The results show that marine dealers have ranked their respective manufacturers lower, comparatively, than other industries. It’s also true, however, that the study received less than a 10-percent response rate, as a total of 568 dealers provided their opinions.
Going into the study, Sorensen says that J.D. Power recognized that dealers were concerned that the manufacturers weren’t listening to them and that this study would offer the opportunity for them to air their discontent.
“One of the things that surprised us was how few dealers took advantage of the chance to voice their opinions on these issues,” he said. “We have to say that we were disappointed that we saw a certain amount of apathy on the part of the dealers who chose not to respond. Fortunately, we sent out so many that we were able to get a really robust sample and get some really good feedback from the industry. We managed to get a wealth of information, and it’s produced a great opportunity for these boat and engine manufacturers to start dealing with the issues.”
Dealers rated boat manufacturers on 45 attributes of dealer satisfaction and engine manufacturers on 42 attributes. Engine makers received a 5.75, with 10 being outstanding and 1 being unacceptable. Boat makers received a 5.52. Dealers also scored finance providers (6.41) and insurance providers (5.64). J.D. Power and Associates considers anything lower than 7 as a low score, compared to consumer studies where 7 or less translates into low customer loyalty and advocacy scores.
Those scores didn’t surprise Edwards.
“In this industry, that’s about right where I would think it would be,” he said. “That’s terrible when the No. 1, highest-rated are the lending institutions. That’s where everyone else should be. But the dealers who did the survey, they chose them because they’re the easiest ones to do business with.”
Sorensen agrees there’s room for manufacturer improvement, but he also sees the results from a different perspective.
“This study in no way implies that it’s all on the manufacturer’s head to fix these issues, to fix these problems,” Sorensen says. “The dealers are all in the same boat with a fairly consistent message. They’ve been telling us pretty much the same thing, that the relationship has to improve.
“The dealers are saying that they want more care and they want more follow-up, and they want to be more open in terms of communication with the manufacturers.”
Communication, it turns out, ranked highest in relative importance when it came to dealers’ relationships with both the engine and boat manufacturers. The next two attributes on the list could also be categorized under a broader “communication” listing: Manufacturer responsiveness to dealer needs and manufacturer management’s openness to dealer input.
Though those categories were ranked highest in importance, none of them broke the 7.0 mark on the Overall Satisfaction break-down (see charts, pages 46-47). In fact, out of the top 12 attributes dealer’s pinpointed for engine manufacturers, openness to dealer input ranked last and responsiveness to dealers needs was second to last.
Sorensen points out, however, that a real theme that developed in these results was directly related to service.
“As we found out in our consumer study,” he explains, “the service end of the deal is not getting the emphasis it should.”
Four of the top eight “drivers of satisfaction,” as Sorensen refers to them, are related directly to service. Overall satisfaction with manufacturer service representative, honesty and integrity of that service representative, and technical support for the dealers service department all ranked similarly in terms of importance to the dealers, and fulfillment of service commitments ranked slightly higher. Those categories did, however, rank slightly lower compared to other manufacturer attributes on the satisfaction list.
For every case like Edwards’ there are others that demonstrate just the opposite. In fact, there are a few manufacturers who received very high scores from their dealers, and even Edwards himself will rave on and on about his new manufacturer.
“I’m with Genmar right now,” he says. “I switched over to Lund, and I don’t have one bit of problem with them at all. I order parts, and I have them within a week to 10 days.”
Edwards credits Genmar CEO Irwin Jacobs’ philosophy that he says promotes better relationships between the consumer and the dealer, the dealer and the manufacturer, and therefore the consumer and the manufacturer.
“It’s like Irwin says,” Edwards explains, “It doesn’t do any good to sell a guy a boat and he has a part break and it takes six months to get a part so he can go boating.”
“He wants everyone to be happy from the consumer on to the dealer. He has set the tone, and if all the boat companies and the engine manufacturers would operate that way … instead of [scores of] 5 and 6, we’d be up between 7 and 9. And that’s where this industry should be.”
But many manufacturers are not generating very high scores from their dealers, and this study, while surveying the dealers, was really done to help the manufacturers mend those relationships. According to Sorensen, the results of the study allow the manufacturers to step back and evaluate where they can change their behavior and figure out how they can also incentivize dealers to change their behaviors.
“This study speaks for the dealers and not the manufacturers,” he says. “What do the manufacturers take away from this? Well, here’s a laundry list of what to work on. Some of these things are really easy to address. It doesn’t take a million-dollar investment to fix up these problems. It just takes a re-focusing of resources. It takes better training. It takes, sometimes, some attitude adjustments. It’s possible that there are corporate values and cultures that need to be redirected.
“But we give them specific information regarding where the low-hanging fruit is.”
That low-hanging fruit is where the manufacturers should turn their attention, says Sorensen. He cites examples of where the dealers who responded to the survey say that manufacturers lacked effort: 1 in 4 manufacturers didn’t take the time to visit them last year. Another 1 in 4 only visited them once.
“So I think we see a case where the dealers feel like they’re being left out in the cold,” Sorenson continues.
Off and running
To help change that mentality, J.D. Power and Associates has compiled those statistics and others into a comprehensive, 60-plus-page report and is trying to get it in the hands of the manufacturers.
As we went to press, J.D. Power had just met with a group of about 20 manufacturer representatives and proposed a three-part dealer training process that would include a three-part series covering customer service, sales, and service in its first year.
It might seem odd that J.D. Powers’ solution to dealers’ dissatisfaction with boat builders is to train the dealers. According to the study, though, nearly two-thirds of dealers surveyed believe an industry-wide dealer training and certification program is a good idea that can have a positive impact on cusomer satisfaction.
“Giving dealers the proper tools and training will help them provide the retail customer with a more satisfying boat ownership experience,” Sorensen said. “this is especially true in providing the sales and service training and tools that dealers need to succeed in an increasingly demanding consumer marketplace.”
The need for the survey is recognized, and the manufacturer response has been a positive one. In fact, a group of the manufacturers approached J.D. Power last year and brought up the need to “make things better with our dealers,” according to Eric Sorensen. Mix in the fact that there were some general correlations between the manufacturers who did well in J.D. Powers’ consumer study and those who did well in the dealer study, and one can witness the trickledown effect relationships have.
If all goes as planned, the manufacturers, who would fund the training effort and would make the program available to its dealers. Through a system that will reward participating dealers, J.D. Power would train dealers in an effort to improve relationships.
The greatest reward, however, just might be what everyone is striving for in the end: happy customers.
“We found early on in this business that the manufacturers and the dealers, they’re not just selling a boat and motor,” Sorensen says. “They’re selling a lifestyle and a boating experience, and a very big part of that equation … has to do with the sales and service experience. Especially the service end of the experience, seems to be where the industry is falling on its sword.
“And it has to improve at that level or regardless of how good the product, the experience will only get to be so good. And the reason that that’s important to the industry … is we can connect the dots between that and brand loyalty … and also dealer loyalty. If these consumers are dissatisfied and are being let down … then their first boat is going to be their last boat in a lot of cases.”
On the bright side
Eric Sorensen at J.D. Power and Associates was quick to point out that not all manufacturers received bad scores from their dealers. In fact, there were quite a few dealers who rated their manufacturer counterparts quite well.
Sorensen mentioned Grady White, Malibu, Sweetwater, Sea Ray, Cobalt, Correct Craft, and G3, while also noting that there was some correlation between the dealer study and J.D. Power’s consumer study in regard to good scores.
“Grady White, Cobalt, Sea Ray, and Correct Craft were all award winners in our consumer study,” he says.
On the engine side, PCM, a division of Pleasurecraft Engine Group, Suzuki, Honda, Yamaha, and Volvo were rated high in overall satisfaction.
Sorensen said the study also noted some “great improvements” for some of the manufacturers. For instance, 47 percent of Boston Whaler and Crownline dealers say that their relationships with their manufacturers have improved.
Likewise, “it seems to us that the Bombardier purchase from OMC has made a difference because … the highest percentage of dealers reporting that their relationship with their manufacturer has improved were Evinrude and Johnson dealers.
Yamaha Boosts Investment In Dealer Training
Those dealers who participated in J.D. Power and Associates’ Dealer Attitude Study should be patting themselves on the back. The results of that and several other studies on customer and dealer satisfaction over the past few years have prompted Yamaha Marine Group’s plans to bump up its investment in dealer training to seven figures. Yamaha, according to Group President Phil Dyskow, plans on adding new programs, expanding others and making many less expensive or even free for participants.
While he says most marine companies measure customer satisfaction and some of them distribute the results, few actually empower their employees to act on them because of the costs involved. However, Dyskow explains that the growth in revenue Yamaha has experienced in the U.S. over the past year has given it the luxury of looking to the future and investing in improvements.
Among Yamaha’s goals for its new investment is to improve its Customer Satisfaction Index (CSI) rating, help its dealers improve their profitability, and ultimately to make the customer and the dealer happier, says David Grigsby, Yamaha Outboard product and training manager.
“We’re suddenly finding that we have all this data we’ve never had before,” Grigsby explained, referencing the CSI data provided by the NMMA and J.D. Power and Associates, as well as J.D. Power’s Dealer Attitude Study.
Grigsby says the marine industry relies on keeping customers involved, and due in part to its low CSI, the industry has been hurting.
Adding CSI training
One way in which Yamaha has invested in its dealer training is by adding customer satisfaction training to its existing programs.
For example, this will be the third year Yamaha has offered Performance 500, what Grigsby calls Yamaha’s “base program;” however, it’s been upgraded to have considerable more CSI content this year. The five-day program is aimed at dealership owners, managers and sales managers, and will be offered in Boston, Las Vegas and New Orleans.
Advanced Performance 501, in its second year, is a three-day program that takes place at the same time and place as Performance 500. Yamaha is aiming to get about 100 dealers to attend Performance 500 and 75 to attend 501 this year.
Another course that will be infused with CSI content this year is Yamaha University. In the past, the class concentrated strictly on product training and took about half a day, but now Grigsby says Yamaha is asking students to shift from a focus on selling against the competition to being more informative to the customer.
The new Yamaha University will take a full day and include a professional sales workshop to provide students with sales weapons, such as how to drum up business when there isn’t any, how to follow up with customers, and how to use the Internet and yellow pages to their benefit.
Last year, Yamaha offered 61 small Yamaha University classes. This year, Grigsby says 21 of the 65 classes being offered will include the new sales training program. The outboard engine manufacturer’s goal is to attract 2,000 participants to this year’s Yamaha University, half of which Grigsby hopes will attend one of the full-day classes. Both have been and continue to be free to participants.
Part of Yamaha’s new vision for its dealer training program involves strong takeaway value For example, those who attend Yamaha University will receive their own DVD product guide to bring home with them.
Cutting the expense
One way Yamaha is luring dealers to the training sessions is by lowering the price. “We think we can sell more product as a result,” explains Dyskow.
Performance 500 is priced at $2,294, including hotel room, food and seminars, and Performance 501 is $1,564. In the past, Yamaha would co-op 50 percent of the price and charge the dealerships’ parts departments for the other half.
Now, Yamaha’s key dealers can co-op 70 percent of the price for the two courses. In addition, Yamaha has been working with its boat company partners to co-op a percentage of the price. So far, 14 boat builders have agreed to participate, another potential cost savings for participants.
A new service training program
Yamaha also is adding a new three-day service managers workshop this year that will be offered at seven U.S. locations. The first day of the program will be completely dedicated to CSI. The course, titled “Fix it right the first time,” will be taught by Valerie Ziebron, who comes from Daimler Chrysler.
During the second and third days, dealers are “Yamatized,” says Grigsby. They will learn how to fill a warranty claim, how to fix Yamaha product, and how to work with Yamaha to get paid. And, it’s all free.
Dyskow points out that a focus on fixing it right the first time will help dealerships make more money through their service department.
“We’re investing in our CSI with dollars, not words,” he says. “We put our money where our mouth is.
— Liz Walz