Certifiably sane

Eight years ago, Chrysler Corp’s. dealer network was a lot like many boat builders’.

It included out-of-date facilities, low CSI scores, an old-world image and unmotivated dealers, says Robert M. Williams, DaimlerChrysler’s director of retail strategies and dealer relations. Many of Chrysler’s dealers had been with the company for years, and most were fiercely independent.

Then, Chrysler made a change. It turned to its best dealers for help, and together, they assembled a list of simple, but important, criteria for what is now Chrysler’s Five Star Dealer Program.

“Five Star was what the best dealers were already doing,” Williams explains. “We didn’t invent it. They did. We just packaged up what they did and rolled it out to the other dealers.”

Today, 57 percent of the company’s dealers, selling 78 percent of its volume, meet these criteria. And as a result of the program, Chrysler saw the highest increases in customer satisfaction among its peers in the automotive industry for four years in a row.

The U.S. boating industry would like to see similar improvements in consumers’ satisfaction with the dealer experience. In fact, the effectiveness of the Grow Boating Initiative – and perhaps even the industry’s future – depend on it, according to Larry Russo, chairman of the Grow Boating Initiative’s Dealer Standards and Quality Task Force.

“It will be hard for dealers to invest large sums of personal capital in their businesses if this program fails,” he says. “I will lose trust in this industry if it fails. We’ll be doomed.”

What IS certification?
The concept behind the dealer certification program is simple: To develop a set of standards that, if met, will provide the framework for dealers to achieve better customer satisfaction.

The National Marine Manufacturers Association enacted a similar program for boat builders last year and has mandated certification as a prerequisite to membership. The ultimate goal behind this push for certification is to drive customers to certified dealers to buy certified boats, says NMMA President Thom Dammrich.

“For dealers, certification is improvement at your job site every day,” sums up Russo. “Paint your building. Put up a new fence. Pave your parking lot. Do the things necessary in retail that today’s consumer has a reasonable expectation for.”

In total, Russo imagines the program, like Brunswick Corp.’s Master Dealer program, will have four areas of criteria: human resources, operations and facilities, sales and service. The exact criteria and the method of policing the program still needed to be worked out as Boating Industry went to press.

The task force has, however, created two documents: a Customer Bill of Rights and an outline of the minimum requirements of the certification program.

“I certainly think that a big percentage of existing dealers are satisfying and, in most cases, exceeding what our minimum standards are,” says MarineMax’s Jeff Scherer, a member of the task force. “They are achievable by anyone in the business.”

The task force has also decided that the program will be administered by an objective third party, rather than individual manufacturers, the NMMA or the Marine Retailers Association of America.

“When suggestions for improvement are introduced by a consultant to achieve certification,” Russo explains, “the dealer is motivated to improve and perform, and it doesn’t impact the day-to-day builder-dealer relationship.”

The task force originally considered five candidates to administer the program: Sandy Corp., which administers the Sea Ray and Boston Whaler Master Dealer programs, as well as the US Marine Pro Dealer program; J.D. Power & Associates, which consults with dealers from many industries, including automotive; Five Star Solutions, the executives of which created a certification program for Chrysler; Avala, which currently administers NMMA’s CSI program; and Maritz, which has created a dealer certification program for Cadillac.

“We went to proven leaders, looked at what they accomplished and crafted a plan for the marine industry that will work,” Russo says.

In early February, the task force unanimously voted to move ahead with Five Star Solutions.

According to Russo, working with the newly launched company brings several advantages – its executives have experience working with Chrysler Corp.’s dealers, who have much in common with boat dealers; it’s willing to customize its program for individual dealers; it has experience soliciting dealer input; and it’s passionate about improving the retail experience.

Another significant factor that came into play was the ability to use the Five Star brand.

“When you think of an experience being five star, you associate it with excellence,” explains Russo. “We thought taking this Five Star moniker to the marine industry would give us immediate brand identity. The other companies couldn’t deliver that.”

Finally, while some may see Five Star Solution’s lack of direct marine industry experience as a draw-back, the task force recognized the benefits.

“We were concerned that the other candidates – all four that submitted requests for proposals – have contracts in the marine industry,” Russo says. “It was one of the sensitive considerations that we not create any conflict of interest … that would somehow impede the progress of dealer certification.”

But not everyone in the industry agrees that a national dealer certification program will work or is even a good idea.

The unconvinced
One dubious party is Dusty McCoy, president of the Brunswick Boat Group.

McCoy suggests that under his definition of dealer certification, an industry-wide program wouldn’t be effective.

“The dealer certification program is a detailed set of activities that the manufacturer and dealer have agreed to,” he says. “It establishes processes that the dealer will run in his or her businesses and that we will run. The value is that both the dealer and manufacturer understand precisely how each will deal with all of the issues that come up in our industry between a manufacturer and dealer.”

He believes certification should be tied to specific types of dealerships, handling specific types of brands, and therefore should be the responsibility of the individual boat builders, not the industry at large.

Brunswick’s lack of support for a national program shouldn’t be a hitch in the industry’s plan to move ahead, according to Russo.

“There will be lots of naysayers and non-participants in the program,” he says. “That shouldn’t stop us from the mission of self-improvement in the marine industry. It has to happen for survival, and it has to happen to reward the retailers and manufacturers who care about growth, opportunity and prosperity.”

It’s hard to argue that Brunswick doesn’t care about growth, opportunity and prosperity. But it is no surprise that McCoy advocates the development of individualized programs by each boat builder and perhaps even for each boat brand. Several of Brunswick’s brands have already undertaken such programs.

Sea Ray was the first brand to create such a program — the Master Dealer program. It was then modified for use by Boston Whaler. Over the past two years, the US Marine companies have created their own similar program, called Pro Dealer.

These are expensive programs by marine standards, according to Ed Boncek, director of dealer management systems for Sea Ray.

If they were to do it on their own, many marine manufacturers would be unable to create such in-depth programs. This would leave large inequalities between dealers certified through different programs. Additionally, trying to meet more than one set of certification criteria would be frustrating, at best, for those dealers that handle multiple brands. This doesn’t concern Brunswick, however, as it has pledged to increase the number of exclusive dealers in its network.

But the future success of a national dealer certification program may rely on whether the task force is able to get boat builder support.

“We need to have approval and buy-in from the OEMs and ultimately have them push it out to their dealership base,” says Scherer. “They have the relationships and they can incentivize their dealers.”

A lack of support from the industry’s largest boat builder is likely to render a national program less effective and could possibly stall it altogether. A lack of support from Brunswick has, in fact, been cited as the primary reason behind the failure of a previous effort to grow boating. With the certification program still in the development phase, however, it is much too early to determine the level of support it will eventually attract.

The motivation equation
The success of dealer certification hinges in part on whether those dealers most in need of improvement will jump on board.

“The marine industry needs to understand that there will be leaders, then a second wave,” says Boncek. “Generating third and fourth waves will become more difficult. It will be a challenge to truly raise the level of experience of the shoppers. It requires a critical mass to truly make a difference from the customer’s point of view.”

Russo admits that he doesn’t know if a national program will attract the majority of dealers.

“To get the attention and commitment of half of them would be very rewarding,” he says. “The other half, in time, will have to step up or step aside.”

Russo says that the “A” level dealers are most likely to sign up first. The majority of dealers are not “A” level, however. Therefore, the third party chosen to administer the program needs a strategy for targeting dealers at every level.

Chrysler’s Five-Star program was developed for the automaker’s 4,000-dealer network, which includes businesses of all sizes and levels of sophistication. In contrast, Sandy Corp. has experience working with the marine industry’s best dealers, according to Russo.

“Master Dealer is a top-of-the-line, Cadillac-type program,” explains Boncek. “It’s very expensive and dependent on on-site visits, extensive coaching and counseling. Our program is very complex, detailed and thorough, far more so than an industry-wide program should be.”

As a result, task force members looked particularly closely at the Five Star program, feeling it most closely reflects the industry’s marine dealers. Williams says it took Chrysler a year and a half to get about 60 percent of the automaker’s volume involved in Five Star. Over the past six and a half years, the manufacturer has added dealers representing an additional 18 percent of its volume.

At Chrysler, the biggest stores jumped on board first. Williams doesn’t expect the bottom 10 or 15 percent at the other end of the spectrum to get involved any time soon.

Today, in the marine industry, manufacturers and dealer organizations like MRAA often find it challenging to attract even a quarter of their dealers to participate in improvement programs. The challenge for the task force and for the program administrator will be finding a way to incentivize a large percentage of dealers, which have historically been slow to embrace change.

Russo believes a certification program should be multi-tiered with built-in rewards at each level. As a Boston Whaler Master Dealer, he has had experience with such a program and believes it to be very effective.

He, like most industry parties, agrees that dealers entering the certification program should have to make a financial investment. But he believes that they should receive incentives and refunds to offset that initial investment once they achieve certification.

At Chrysler, dealers pay for most of the Five Star program themselves, including training and facility improvements. The auto manufacturer’s main offering to certified dealers is the advertising that it uses to promote its Five Star dealers. The traffic that the advertising drives to the dealerships is the central incentive of the program.

The true carrot of the certification program for most boat dealers will be the leads generated by the Grow Boating marketing campaign and the additional business they create, according to Phil Keeter, MRAA president.

That’s the main benefit the RV industry is receiving from its national campaign, he points out. An RV dealer in Keeter’s hometown sold 51 units in 2004 based on leads from the Go RVing campaign.

The creation of a lead generation system doesn’t seem to be a Grow Boating priority right now, though. It may be a year or longer after the launch of the Grow Boating marketing campaign before any such program is put in place. And even then, it is hard to gauge whether the number of leads would be significant.

New vs. old
No matter who you talk to, Grow Boating leaders are adamant that the new dealer certification program will not be like the old Marine Industry Certification program, “where you had a piece of wood on your wall to say you are a certified marine retailer.”

“That wasn’t certification,” says Russo. “You simply signed your name to agree to hold up a set of values.”

Sea Ray’s Boncek, who helped develop the MIC program, agrees that a different approach is necessary. While industry leaders worked hard to create it, it was too complex.

On top of that, the MIC program didn’t offer any incentives except the promise that the dealer would be a better businessperson by the time they were certified, according to Keeter. There was no marketing campaign to drive business to certified dealers.

This time, the dealer certification program has the potential to revolutionize the industry. While it may help flatten the bumps in many dealer/manufacturer relationships — “You will find a bonding in our industry like never before,” predicts Russo — the biggest benefit may be found in significant results. If dealers buy into the program, Boncek says, the marine industry could quickly and significantly raise its level of sophistication, an area where it has long been considered behind the curve.

Williams certainly believes the boating industry can achieve the results it seeks.

“The boating industry can do this,” he says. “It just takes leadership, commitment and a will to improve. Five Star is not a new idea or a magic pill. It’s just about excellent execution of ideas that are already out there.”

Chrysler FIVE Star Dealer Program criteria

1. A facility that is competitive for the market
2. A facility that is neat and clean
3. Minimum levels of sales and technical training
4. An annual 8-page employee survey
5. Mapping of sales, service and parts processes
6. Follow-up with all sales and service customers
after a transaction
7. Minimum CSI score

Simply the best

The simplicity with which Five Star Solutions was able to convey its objectives for dealer certification won it the contract.

It came down to one slide.

“When that slide came up, we all looked at it, absorbed it in about 15 seconds, and said, ‘Bingo! They get it.’”

So said Larry Russo, chairmen of the Grow Boating Initiative’s Dealer Quality and Standards Task Force, describing the moment when the task force knew which company it would choose to administer its Dealer Certification program.

“I turned to Thom Dammrich, smiled broadly, and looked at the other committee people. We were all beaming. It was hard to hold back our enthusiasm,” he adds.

The winner was Five Star Solutions, a brand new company established by the people who created Chrysler’s Corp.’s Five Star dealer certification program.

Five Star was the last of three finalists to make presentations to the task force during a meeting in Atlanta in early February.

Each company had created what Russo called, “very high-level professional presentations.” And ultimately, any of the three could have done a good job for the marine industry, he explains.

But at 40 slides per PowerPoint presentation, the task force was getting bleary-eyed by the time they sat down to the third slide show. What cut through the blur was a single image – a footprint of what Five Star wanted to accomplish for the marine dealer.

“We knew that we could take this one frame, I could show it to you, I could show it to a dealer or a boat builder, and say this is what we are all about,” he says. “And they would get it in 15 seconds.”

That one aspect of Five Star’s presentation allowed the task force to overcome its other concerns – they are a start-up, they don’t have any capital yet and they don’t have any consultants.

Ultimately, the task force was hiring a brain trust that it felt would give them a closer working relationship and a more flexible product to take to dealers across the United States, one that could be customized for differences in region, size and culture, Russo explains.

Now, the real work must begin. Five Star Solutions must develop a program that can be reviewed by the task force and a group of pilot dealers, drawn in to co-architect the process. Then, the program will be implemented with a group of pilot dealers to further fine tune it, before it will be rolled out to the industry – hopefully in the third or fourth quarter.

“After waiting 50 years, we don’t have to hurry, but we have to get it done,” sums up Russo.