Measuring Up
When Rod Malone first learned about Sea Ray’s Master Dealer program nearly 10 years ago, his biggest reaction was relief.
“Finally, here was a roadmap,” he said. “I’d probably made 100 false starts trying to commit our operating procedures to paper, struggling for years to re-invent the wheel, and here were best practices, processes, forms, information … all I had to do was implement them.”
Malone followed the roadmap so well that his three Sail & Ski Centers in central Texas now meet Sea Ray’s rigorous criteria for Ambassador Dealer status.
Given the performance standards already achieved by Sail & Ski, you might think that Malone had nothing to gain from Grow Boating’s Marine Industry Dealer Certification. You’d be wrong. Malone and other Sea Ray dealers who carry dual certification believe the extra effort is well worth their time and financial expenditure.
For one thing, they’ve started to get the promised referrals from the Discover Boating consumer campaign. They’ve also seen good results from MIDC’s employee and facility standards.
And then there is their avid commitment to the industry.
“I think it’s our duty,” said Rod Bensz, co-owner of B&E Marine, a Sea Ray Master Dealer in Michigan City, Ind. “If all of the marine industry gets on board with MIDC, it will grow sales for everybody,”
While both Sea Ray’s Master Dealer process and the MIDC process address the dealership as a whole, they are roadmaps of a different sort. If Sea Ray’s map gives a multitude of required routes with plenty of details about how best to travel them, then MIDC dealers travel with general directions and some highlights they need to take in along the way.
Still, while their natures differ, their destination is the same — to improve the customer’s experience so the dealers can sell more boats. A closer look at the two approaches provides some insight into their parallel journeys.
Generic vs. brand
Despite MIDC critics who believe that dealer certification is by definition about the relationship between the manufacturer and the dealer, dealers are signing up for MIDC faster than anticipated. By mid-April, 229 were either already certified or engaged somewhere in the process, making it likely that Grow Boating will easily attain its goal of 250 for 2006.
It has been 10 years since Sea Ray launched its Master Dealer program. Today 87 percent of Sea Ray dealers are in the program, resulting in the vast majority of Sea Ray boat sales in the U.S. and Canada being made by dealers who are certified as Master Dealers or are actively pursuing that status.
“It takes awhile before you reach critical mass,” said Ed Boncek, director of management systems, Sea Ray. “By this year, probably 90 percent of our boats will be sold by dealers at this level of performance and sophistication, but it took us several million dollars to get here. It is a long-term investment.”
MIDC consists of seven standards areas, each of which contains numerous guidelines. The standards are a consumer bill of rights, human resources/employee relations, training and education, facility/presentation, sales processes, service processes and follow-up processes. To become certified, dealers must score 100 percent during the site audit conducted by Five Star Solutions, the independent third-party company, under contract with Grow Boating, which administers the program.
Sea Ray has five major standards: customer satisfaction/ human resource management, dealership operations and facility, sales process, service process, and parts and accessories process. Guidelines for each standard are detailed and precise, and each is scored on a 10-point scale. To be certified as a Master Dealer, the dealership must receive an overall score of 95 percent or higher.
While neither program is mandatory, Sea Ray obviously has more leverage in encouraging its members to go for certification — and the numbers to back it up. Master Dealers are in the 92 to 95 percentile on Sea Ray’s customer service index, while noncertified Sea Ray dealers are in the 84 to 85 percentile. What’s more, Master Dealers own 2.5 points more market share.
“This has been a pretty consistent number over the years, and it has a huge impact on the company,” Boncek said. “We know that dealers who follow these standards give customers a better ownership experience, have more repeat business and do a better job representing the brand in the marketplace. And although I don’t have access to their financial data, I have to believe that they make more money.”
Because MIDC is an industry program, its success will be defined by the number of dealers certified and the overall health of the industry.
“Because the program is new, there isn’t a benchmark yet to enable us to say that we expect it to do ‘x,’” said Terry Leitz, CSI program director, and a National Marine Manufacturers Association representative on Grow Boating’s board of directors. “But in looking at certification participation in the automobile industry, dealers who went through a dealer certification process are, by any metric, more profitable, their customers were more satisfied with their experiences, and they had more repeat customers to their dealerships.”
In comparing standards to standards, the Master Dealer program is much more in-depth. For instance, whereas MIDC requires that dealers document their employee training, it does not tell them how to do it. Nor does it specify how much training is required. Sea Ray, on the other hand, details the type and level.
Still, MIDC does have a couple of elements not found in the Master Dealer program. The annual employee survey is the largest difference. While Boncek doesn’t foresee adding this piece to Sea Ray’s program, its popularity among dealers might lead to it being added to other manufacturer’s dealer certification programs.
“It’s a great idea,” said Dave Taylor, senior vice president of sales and marketing, US Marine, which offers its dealers a spin-off of Sea Ray’s Master Dealer Program — Pro Dealer. “The whole philosophy of the Pro Dealer program is continuous improvement, and we evolve the program as we learn. So I think it is something that we might adopt.”
In addition to the employee survey, dual certified dealers cited more of an emphasis on employee communication and facility improvements as pluses in MIDC.
“What stood out the most for us was the emphasis on communication,” said Bob McMahan, vice president, Erwin Marine Sales, a Master Dealer in Chattanooga, Tenn. “We are up to about 75 people now, so we aren’t a small company where you talk to everybody every morning. The fact was that we weren’t doing a good job communicating with our line workers, the people out front, about our strategic plans.”
As one step in improving his situation, rather than have each location host its own Christmas party as was the tradition, last December McMahan shut down the entire business, hired temporary help to answer the phones, and hosted a lunch for all his employees. In addition to some fun, it was an opportunity to begin to bring all of the employees up-to-date on the growth of the business.
Bensz found value in the MIDC facility standards as well as employee relations.
“One of the standards is quarterly facility inspections to be done by the staff and then by a customer,” he said. “That has led to lots of little improvements like locks on the bathroom doors, new paint and just general clean up.”
The biggest complaint about dual certification is cost. This concern is mitigated, however, by Grow Boating’s willingness to accept the on-site evaluation and documentation done for a manufacturer’s certification program as long as it is done by an independent third party.
Therefore, a Master Dealer going through the MIDC process is charged for the MIDC orientation workshop and certification but does not have to pay for an on-site evaluation. This also speeds the certification process as the dealer can just submit his existing documentation to Five Star Solutions.
Spreading the benefits
Sea Ray provides big incentives to encourage dealers to become certified — including paying full retail shop labor rates for warranty work — knowing that it will take some time before retailers recover the costs of certification through increased boat sales.
“We recognized that we are asking people to invest in additional service and parts technicians, tools, computers, software for prospecting, trucks to do boat shows…” Boncek said. “Somewhere along the line, it has to be paid for.”
MIDC fees are being paid for, in part, by the Grow Boating campaign. And in many cases, manufacturers are paying a portion of the remaining cost for their own dealers.
Boncek believes that the industry will have to step up to offer dealers even more assistance for MIDC to achieve its potential. Larry Russo, owner of Russo Marine, Medford, Mass., and chair of the Grow Boating Board of Directors, agrees.
“For the manufacturers to pick up 50 percent of the cost of certification is a token,” he said. “What they really need to do is become more creative.”
Russo suggests, for example, they might pay a higher warranty reimbursement rate for the length of the relationship, double advertising funds for a year or cover the cost of in-house training. He’s confident that the manufacturers will rise to the occasion.
“It’s coming,” Russo said.
In the meantime, for those new to the dealer certification process, MIDC seems to be the right balance of standards and flexibility.
“The feedback has been very positive,” Russo said. “The dealers don’t think this is too heavy-handed.”
Joe Lewis, owner of Mt. Dora Boating Center in Mount Dora, Fla., agrees. MIDC was his first experience with dealer certification.
“When we came back from the initial workshop, we knew exactly what we needed to do,” he explained. “Our biggest task was to start to document both the work processes and the job descriptions. After we got that down, the rest of it was pretty easy.”
According to Leitz, for newly certified dealers, overall the biggest gap has been in customer follow up.
“The program requires that they have a formal follow-up program in place for both sales and service,” Leitz explained. “In some cases, they might have had one but it hadn’t been formerly documented, being rather more happenstance or anecdotal. MIDC asks them to formalize it.”
At Mt. Dora Boating Center, follow up now takes center stage during staff meetings. After a new boat delivery, for instance, a post delivery report is followed up in three days with a call to see how the customer is doing. There is also a 14-day follow up, with a survey sent to the customer, and then a 30-day follow-up telephone call. The results are reviewed during staff meetings, when surveys are passing around so that everyone can read the customers’ comments.
“We have a lot of customers who will comment that such-and-such employee did a great job on this or that, and that goes a long way in reinforcing employees’ attitudes that they really can make a difference,” Lewis said.
Ratcheting it up
Although MIDC is not quite a year old, Grow Boating is already contemplating tougher standards.
“We will ratchet it up over time,” Russo said. “If we don’t raise the bar as we go forward, we are not improving the industry.”
Specifically, the board envisions a tiered level of achievement such as Sea Ray’s stepped Gold Dealer, Master Dealer and Ambassador Dealer process.
“We need to do that too, because once you’ve met a certain plateau, you have a desire to take your business to the next level,” Russo said. “So we need to create opportunities down the road, and we will.”
As the Ambassador Dealer program illustrates, dealers are responsive to being challenged. To qualify, a dealer must be a Master Dealer; score 95 percent or higher on the annual evaluation, maintain overall sales and service CSI scores of 9.2 or higher, and meet or exceed Sea Ray’s national average market share. If the dealership has multiple locations, each must meet all criteria.
“In its first year, 2003, we had two dealers qualify,” Boncek said. “In 2004, we had two, one of which was a repeat. And in 2005, we had 22 locations. Once people got excited about it, they reached another level of performance.”
Since Sea Ray introduced dealer certification, sister companies within Brunswick have followed in its footsteps using the Master Dealer program as their model. Boston Whaler has launched a program of the same name, and US Marine launched Pro Dealer, which differs only as determined by its brand.
In the nearly two years since it was introduced, about 20 percent of US Marine’s dealer base has become involved in Pro Dealer at some level.
“Any certification program that is robust, as ours is, takes a commitment from the dealers to fully engage in it, and that takes time,” Taylor said. “But when you really embrace it, it is true process implementation and improvement.”
Going forward, MIDC and the manufacturers’ programs appear to be able to exist side by side, complementing each other in the overall goal of growing the industry. While there will always be dealers who forego any certification, those who get involved are sure to realize the benefits.
Sidebar:
Sales sell the first boat, service all the rest
Long before there were dealer certification programs, there were service certification programs providing brand-specific training for service and parts technicians. Yamaha’s Five Star Certification program, for instance, has been in place for more than 15 years.
In recent years, however, Yamaha and other manufacturers raised the bar on these programs with the same goal as dealer certification, improving the customer’s experience.
The Five Star Certification program consists of a series of training videos that the dealer purchases for a one-time fee. Employees work through the modules at their own pace and then take an online test for certification.
Yamaha added its Master Technician program in 1999 to help its dealers deepen their level of expertise. Comprised of six one-week sessions, the Master Technician is rigorous and hands on.
The manufacturer recommends that participants take no more than two sessions a year, and then put what they’ve learned into practice for awhile before proceeding on to the next session. Once certified, the technician must attend and pass a recertification class every two years.
Dealers are not charged for the session although they must cover their technicians’ expenses.
“When we started the Master Technician program in 1999, we had about 500 students,” said Dave Schumacher, training supervisor, Yamaha. “We now have more than 1,500. So there has been an overwhelming acceptance by the dealer network.”
The Mercury Service Difference is another comprehensive certification program. Technicians work through three levels to attain Premiere Service certification. Certification audits conducted by Mercury field technicians are also stepped. At minimum, a field tech will audit a first-level dealer once a year, an intermediate level dealer every two years, and a premiere level dealer every three years.
“The average is probably about every one-and-a-half years for all dealers at all levels, because the dealers want to achieve the highest level so they can receive the service level benefits,” said Brad Weber, director of field service development and operations, Mercury Marine.
Those benefits include financial rewards from Mercury as well as increased customer loyalty and repeat purchases.
A large component of the Service Difference program is a CSI score. Using what customers might consider a worst-case scenario, having a product serviced while still under warranty, Mercury follows up that experience with a survey that asks them to rate the service they received and how apt they would be to purchase another Mercury Marine product from that dealer.
“Since we implemented that aspect of the program in 2000, we haven’t experienced a dip in either score,” Weber said. “What that tells us is that the dealers really understand the program and are embracing it as it was designed and that, as a result, we are improving the customer experience.”
Premiere Service certification is now integrated into Sea Ray’s Master Dealer program, meaning that Master Dealers must have Premiere level technicians on staff.
