Ask most boat builders about their dealers, and you’ll hear a similar tune.
They’ll sing their dealers’ praises, boasting of the strength of their partnerships and claiming they couldn’t find success without them. Based on this alone, you’d think the boating industry was one big dealer/manufacturer love fest.
But that’s where the commonality ends. Take a look at the dealer relations practices of one boat builder vs. another, and you’ll often find a big gap — one that suggests very different philosophies and is often accompanied by very different relationships, running the gamut from mutual devotion to indifference and worse. That isn’t to say that boat builders’ policies determine the success or failure of the relationship — it takes two to tango — but at the very least, they set the tone for it.
These relationships have the potential to impact almost every facet of a dealer’s business, from marketing and advertising, service and repair to succession planning and profitability. And with dealers serving as the main point of contact between the industry and its customers, the successes and failures of these relationships are major factors in the industry’s health.
That’s what makes the boat builders highlighted on the following pages so worthy of recognition. They’re leading the industry with their handling of dealer-specific issues that will significantly impact its future.
These companies were not selected based on the opinions of Boating Industry magazine’s editors. Nor were they selected based on some self-promoting nomination that the boat builders sent us. We asked the dealer community to recognize outstanding dealer relations practices among their boat builder partners. Then, we spoke with these boat builders’ executives to discover the thinking behind them. Here’s what we uncovered.
A Family Affair
Glastron Boats invests in its dealers’ education, holding an annual, two-day, national dealer sales and marketing training event, attended by as many as 250 people, including dealership principals and their employees.
A lot of boat builders offer dealer education, but this is not just another product or sales training session: it features Glastron dealers training Glastron dealers, sharing success stories, how-to techniques and new business ideas. While Glastron Vice President/General Manager Bruce Sargent serves as emcee, it’s the dealers who conduct all the presentations.
“Sometimes a manufacturer thinks they know everything about retail,” says Sargent. “I know there are things I don’t know. You have to understand these are people who have elected to carry your product. They want to be your dealer. The stronger they are, the stronger you will be.”
The topics covered at the event run from improvements in boat show marketing and CSI scores to profitability, and Glastron has brought in boat owners and prospective customers to provide additional perspective.
Luke Kujawa, president and COO of Crystal-Pierz Marine, has often been a presenter at the event. He says, “Even when you’re putting it on, you get challenged by other dealers and really have to think through what you’re doing and why you’re doing it. The excitement is tremendous. I leave there with 100 different ideas I want to try — things real live dealers have tried and had success with.”
Not only does this annual event strengthen Glastron’s relationship with its dealers, but it also creates a strong bond between its dealers. Sargent says many have begun sharing salespeople during boat show season, sometimes sending them across the country to help each other out.
“When you invest in employee training, your company becomes stronger,” says Nancy Smith of Colorado Boat Center, based in Loveland, Colo. “Glastron took that theory to a whole new level by investing in its dealers, too. There is no ‘we’ or ‘them’ … it’s the Glastron Family.”
Full-time Regal Boats employee Skip Shepard has one main job: Serving as captain for the boat builder’s “Regal Rewards” program — available to dealers’ customers purchasing yachts of 38 feet in length and above.
This program, created over seven years ago to boost customer satisfaction, allows new boat owners to take advantage of a customized three-day personal orientation with Shepard. In addition, dealers can send prospects to St. Petersburg to demo the two boats Regal has available there.
“It’s quite a commitment from Regal and different than anything we have ever seen,” says Dan Bair of Quality Boats of Clearwater, Fla.
Regal CEO Duane Kuck explains that the more knowledgeable a new boat owner is, the happier they’ll be with the boat ownership experience, which makes dealers’ jobs easier.
“Ultimately, with more satisfied customers, the repeat business and the word-of-mouth advertising is beneficial to all of us, the dealer included,” he says.
Regal also offers dealers “Regal Vision” — a software program that allows dealers to download info, specs and video-taped coverage of each boat model, as well as competitive products, to use in its showroom. While most boat builders offer this type of information, the depth of information provided by Regal — both on its vessels and its competitors’ boats — are what make it stand out. In fact, Regal sends out program updates three or four times a year.
“We use this tool every day,” Bair says.
Added to this, the company launched “Revelations” this year, an extensive interactive online dealer sales training program. The program does not focus on product knowledge. Rather, it educates dealers on the sales process through, among other things, role playing. After a dealer’s salesmen log onto the site and go through the training modules, they take a test, which allows the dealer principal or sales manager to track the results.
“It’s geared toward making the sales process enjoyable and effective for the boat buyer, and ultimately helps the salesman find the right boat for the prospect, who becomes a very satisfied customer,” says Kuck. “We don’t think that staying the same is acceptable for us on the manufacturing side or our dealers. We’ve got to be growing and getting better.”
Finally, Regal made a decision a few years ago to unconditionally pay its dealers’ shop rates for warranty repairs. Kuck says the company decided not to link this payment to CSI scores because it wanted to make sure the customer was being taken care of and the dealer felt he was being properly compensated for the work he was doing.
“We believe that our dealer is our No. 1 customer, and the owner is our joint customer,” Kuck concludes. “We need to give the dealer what he needs and support our dealer so he can take care of the customer. Our support for our dealer has to be exceptional. We don’t always do it, so I’m not here to put ourselves on a pedestal. But we work pretty hard to do it.”
Communication is an important part of any relationship, something Cobalt Boats knows well.
Its password-protected dealer Web site, for example, not only allows the boat builder to share information and tools with its dealers, it allows Cobalt dealers to view each other’s information.
“The Cobalt Communications Network gives me a real-time look at every dealer’s inventory,” explains Joe Hoffmaster of Hoffmaster’s Marina. “This is beneficial for two reasons: I can see which boats are popular in terms of dealer orders and how those boats are being equipped; and if I need a boat and Cobalt has no production slots, I can call another dealer without involving the factory to purchase directly from them.”
Another way it helps facilitate communication with and between its dealers is through its two active Cobalt 20 Groups, which also serve as the boat builder’s Dealer Council. Cobalt typically participates in one of the three to four days of each quarterly 20 Group meeting. During that time, Cobalt uses the dealers’ feedback to evaluate “everything we’re doing,” says Cobalt CEO Paxson St. Clair. “We gather their input as to what they would like to see Cobalt do and what their future needs are.”
In addition to seeking feedback, the company “shares critical business information and future business direction” during these meetings, says Tom G. Whowell, owner of Gordy’s Lakefront Marine, which participates in a Cobalt 20 Group and sits on Cobalt’s Dealer Council. “This process is very helpful for us in that we are allowed to help plan our future with Cobalt.”
Cobalt also emphasizes the value of the 20 Group in helping its dealers raise the bar.
“When we look at where our 20 Group members are today vs. a few years back, it’s a night and day difference,” notes St. Clair. “Each time they get together, they pick up a small nugget of opportunity here or there to improve their dealerships. It makes us think we need to get our act together and make sure we’re performing at the same level — that we’re there with them and not dragging them down.”
In addition to communication with Cobalt executives, Whowell puts a high value on his communications with Clark Boone, Gordy’s Cobalt sales rep.
“Clark is the epitome of what a dealer representative should be to a dealer,” he says. “He helps us overcome numerous obstacles throughout the year; he is active in our business by attending our boat shows and events; he is timely with Cobalt product and inventory information; and his personal and business values are consistent with ours. He is particularly involved in targeting new markets and opening new store locations.”
One thing that distinguishes Cobalt’s three sales reps is that they’re based at company headquarters in Neodesha, Kan., despite a two-hour drive to the closest airport. That makes for a closer relationship between the reps and Cobalt, and therefore strengthens the relationship between the factory and the dealer, says St. Clair.
The other distinguishing factor is length of time these sales reps have spent at Cobalt and the variety of roles they’ve played. Boone, for example, has been with the company since the mid 80s, when he started as a purchasing agent, while the company’s western manager, Alex Barry, has been with the company since the early 70s, spending 10 to 15 of those years as a customer service manager.
Yet another way Cobalt gathers dealer feedback is through dealer satisfaction surveys sent out three times a year to determine how well the company is faring in satisfying the dealer. Cobalt uses the results of these surveys to rate its employees’ performance, which is tied to their bonus programs.
“We measure a dealer’s CSI and how well a dealer does in terms of taking care of their customer,” says St. Clair. “It’s only fair for the dealers to be able to rate us.”
Finally — and simply — Paxson and his father, Cobalt founder Pack St. Clair, have a policy of sharing their cell phone numbers with all their dealers. This is at the core of Cobalt’s philosophy.
“You take care of your dealers and make darn sure if something is wrong, they have direct access to you,” explains Paxson.
When it comes to warranty repairs, Grady-White Boats stands out.
For one, with the exception of the boats’ engines, it doesn’t send its dealers to component manufacturers when something breaks. In fact, the company has been known to overnight a replacement part to the dealer to get the customer up and running as quickly as possible.
“We prefer to manage all warranty concerns through Grady-White to ensure the best problem-solving practices are in place and cost is being measured,” says Kris Carroll, Grady-White president.
This boat builder also pays its dealers’ retail labor rate for warranty repairs if their CSI scores are at least 9.0., which included all but two Grady-White dealers as of mid-January. And in certain circumstances, it has paid travel time for dealers conducting warranty repairs on large boats.
In addition, Grady-White has provided financial assistance to dealers holding open house and VIP events, even sending its executive team hundreds of miles to dealers’ facilities to meet and greet their customers.
“Customer service is their No. 1 priority, and it shows,” comments Dan Bair of Quality Boats of Clearwater (Florida) Inc.
“Our dealers are our business partners and our ‘sales department,’” explains Carroll. “They are a true extension of us, to our customers. The company is sincerely committed to supporting its dealers.
“We learned a long time ago, that even if we produce high-quality products, without excellent dealers to sell and service our boats, we will fail in our mission. We realize our dealers must be profitable in order to delivery superior customer service and maintain their stability.”
Standing by its people
Three years ago, MasterCraft Boats invested in Andy Larson. And ever since, the owner of Midwest MasterCraft, based in Crystal, Minn., has focused on paying the company back.
At the time, Larson was a 10-year dealership employee, serving as sales manager under an absentee owner. When word went out that the dealership was for sale, the 30-something salesman found himself competing with six or seven other businessmen — including several established dealerships — for the MasterCraft line.
Larson had no assets to his name, but he brought an aggressive business plan and the promise of a smooth transition to the table. If MasterCraft gave him the franchise, he could run it out of the same building as the previous owner with the same sales force and the same phone number.
As MasterCraft President John Dorton explains it, it takes a special person to deliver the right message to the company’s customers: A watersports enthusiast who is bright and deeply passionate about the business. When the boat builder sees that spark in someone, they’re willing to go to great lengths to help them reach their potential.
Needless to say, Larson got the line and a lot more. The boat builder bought the former owner’s inventory, selling it to Larson at a discounted rate. And with his floorplan yet to come through, MasterCraft financed the boats for him, simply asking Larson to send the company a check when each boat sold.
“MasterCraft has always been good about doing what’s right, standing by people,” Larson says. “They understand that for them to do well, we have to do well. And they knew if they went above and beyond for me, I could return the favor for them as a strong business partner.”
He has. Not only have wholesale unit sales risen 25 percent, Larson has moved into a new facility, doubled his service business and increased his CSI score by 15 points to over 95 percent. Having met his first two goals — a new facility and a better focus on service — Larson now expects boat sales to grow 10 to 15 percent a year “for quite some time.”
MasterCraft could tell a lot of stories like Larson’s. The company often sits down with its dealers to explore how it can help them build upon their strengths and strengthen areas of weakness, and it offers incentives to help dealers invest their time and money in providing the best retail experience, whether that’s training, a new showroom or better merchandising.
“We now sell boats that cost more than a Lexus,” Dorton says. “Consumers want a similar retail experience.”
A mutual trust
EdgeWater Powerboats believes that mutual trust is the foundation of a strong dealer/manufacturer relationship. And it structures its policies accordingly.
The boatbuilder trusts its dealers on their diagnosis of and time used to conduct warranty repairs, pays their shop rates, and actually cuts them checks for the warranty work completed rather than the typical parts account/credit game played by some builders. They usually ship parts fast and always operate under the guideline of what is best for the customer and fair for the dealer is good for them.
“The bottom line is that although our warranty claim dollars are high relative to smaller dealers,” says Tim Leedham, owner of Bosun’s Marine, Cape Cod, Mass, “our dealer warranty claim rate as a percentage of purchases is one of the lowest in their dealer network, while our customer CSI has been first or second every year since they have measured it for their entire dealer network. They understand that this measurement is the real bottom line.”
EdgeWater Powerboats President Peter Truslow says that not only do these policies promote trust, they save the company time and money.
“We don’t have the time and don’t want to spend the time arguing with our dealers,” he says. “By having these policies, it saves us money, the dealer takes care of the customer, we don’t hear from the bookkeeping department and we don’t get into those quibbles. Plus, the customer gets taken care of faster.”
The other component is that the company picks dealers whose approach to doing business is similar to its own. EdgeWater would rather select a small dealer — with a good record for service — who is enjoyable to do business with than a big dealer who can sell 50 boats a year but is a shark.
“We have actually decided not to do business with a number of high volume successful sales operations because they just didn’t fit our corporate style,” he says.
Doing things better
In an effort to make its dealer relations as smooth as possible, Four Winns has invested in an extensive dealer extranet — and continues to do so.
Among its features is a sales lead management system that sends dealers e-mail notices for each new lead the manufacturer receives the same day it is received. This allows the dealer to assign each lead to an individual salesperson, generate a response letter and add the person to the dealership’s contact log.
“This was a great tool for handling the leads from last year’s Discover Boating campaign,” says Joe Lewis of Mt. Dora Boating Center.
The extranet also features a parts and warranty system that allows dealers to order parts over the Internet 24/7, using a photo of each item to confirm the accuracy of the order, and submit warranty claims online, making payment quick with minimal processing costs.
“From the service end of the business, Four Winns has to be at the top for online claims, very quick payment of claims and online parts ordering with pictures,” says Jason Marina, Mt. Dora Boating Center’s service director.
“We want to get people’s boats fixed and back out in use,” explains Jeff Olson, Four Winns president.
In addition, the extranet includes all of Four Winns’ marketing services offerings, such as POP materials, and the boat builder is working to add more features to it, including the ability to submit and track boat and floor plan financing, according to Olson.
“If we can do things better for our dealers and make them more money, they will sell our boats first,” he says. “Being easy to do business with is one of those intangibles that we want to do well.”
Russo Marine has only been a Sea Ray dealer for 11 months. But it didn’t take long for the boat builder to win the dealer’s respect and loyalty.
“I have come to the conclusion that Brunswick has the best strategies and support systems for what dealers want and need most,” says owner Larry Russo Sr. “We are blown-away with the energy, creativity and expertise at Sea Ray.
“For years, we had to compete with their brand and couldn’t quite understand why they were so dominant in their market segments. In the end, it’s always about the people. They have an experienced, dedicated staff of high-energy folks with a ‘can-do, will-do’ attitude.”
Though Russo shared a long list of examples of dealer relations best practices — including such items as its Master Dealer program, online learning center and boat owner events — a recent conversation he had with a Sea Ray employee sums up his experience.
Russo Marine exhibited 30 Sea Rays at the 2007 New England Boat Show in February, which took place for the first time at the new Boston Exhibition and Convention Center, with ceilings over 90 feet high. He wanted to make a big splash at the show, so he contacted Sea Ray to find out what banners they had available to take advantage of the center’s height. They had just the thing and promised to send it to him — but a few days later it was discovered that the largest banner was in use by another dealer at a show in Cincinnati, one that closed just before organizers of the New England show needed the banner.
Not only did Russo’s exhibit stand to benefit from the banner, he stood to lose a $3,000 deposit if he didn’t deliver the banner to organizers on time. When he shared that news with Nicole A. Bales, an administrative assistant in the office of Rob Noyes, Sea Ray’s vice president of marketing, she made a snap decision.
Bales personally volunteered to drive the five hours to Cincinnati to pick up the banner and overnight it to Russo.
“This is the story of the largest marine corporation on the planet whose employees are willing to make a personal sacrifice to support their dealers,” Russo says. “It’s not ‘I’ll do my best.’ It’s ‘I’ll do it personally.’ In recent years, we have represented several other leading manufacturers. None of these companies, and I mean none, cared about the success of Russo Marine, its employees and its customers the way the Brunswick companies do.”