Piercing the fog

The issue of affordability is far from center stage in the boating industry.

Its complexities have kept most boating businesses from creating and implementing effective solutions.

Because affordability is based on what each consumer believes makes financial sense for their family, each person defines it differently and it’s subject to change. That means the industry can influence consumers’ perceptions of boating’s affordability using the power of marketing. Those whose perceptions of boating’s affordability have come from watching Lifestyles of the Rich and Famous, for instance, may be influenced by images of families enjoying boating through kayaking, inflatable boats, aluminum fishing boats or entry-level runabouts.

It also means that affordability is not simply about the expense of a product or activity, though both play a role in the equation. The value the consumer places on the activity influences the priority level at which boating is placed within his or her budget. Even people with seven figure incomes have to make decisions about what makes financial sense for them, and if boating takes too much time or costs too much, given the enjoyment it offers, it may be abandoned for other activities that are perceived as more affordable.

As Brunswick Corp. President Dusty McCoy points out in an article in next month’s edition of Boating Industry, affordability is connected to many other industry challenges, like water access and the pre-owned boat market.

None of these factors make getting your arms around the affordability issue simple or easy. And until you can define and measure a problem, it’s hard to make it a priority.

The following boating businesses have done just that, however, developing strategies to market boating’s affordability to their customers. Their examples each point a way forward for the rest of the industry.

The product
Stratos Boats has launched a marketing campaign for its 176XT, a new boat model for 2007, positioning it as the bass fishing segment’s first fiberglass boat priced in the same range as a comparable aluminum boat.

A promotion for the boat on its Web site states: “Why settle for aluminum? Tired of the unstable decks, cramped spaces, lack of dry storage and noisy nature of aluminum boats? Experience an incredible transformation in the all-new Stratos 176XT! Longer, wider and touting more interior storage and fishable deck space, the 176XT easily eclipses the best-selling aluminum models. Coupled with an unbelievably low price tag, the 176XT features an elevated level of fishability, features and total performance. So why settle? It’s not about price
anymore.”

Last summer, Ranger Boats’ sales and marketing team took on those functions for its sister Genmar company, Stratos Boats, in an attempt to market the brand to new customers, who eventually might trade-up to become Ranger customers. While the market segment is much different, its strategy is not that unlike US Marine’s with its Bayliner 175, launched in 2002.

“… it wasn’t just us missing the consumer, we felt like it was our dealer,” explains Keith Daffron, Ranger vice president of sales and marketing. “We think we have many Ranger dealers that had gotten so focused on selling Ranger boats that started in the low $20,000s and worked their way up to the mid $50,000s that we were leaving the [entry-level] consumer out. Now, I think Ranger can say, ‘Yeah, we do cut our teeth on selling $45,000 and $55,000 boats, but at the end of the day, we’re offering our dealers and their consumers a chance to buy a small fiberglass fishing boat to get people excited about the business for $12,995, and it’s selling gangbusters. It’s getting in new customers that we’ve never had before.’”

Daffron admits the company is sacrificing margin to sell the new boat model at such a low price, but he says it decided “we would be better off to sell these 700 or 800 boats this year at a narrow margin and introduce more people to the sport than to not do it.”

Part of Stratos’ success with the 176XT has been its marketing of the model. Not only has it responded to consumers’ rising expectations by stressing the value of the product, stating that consumers now don’t have to “settle” for aluminum, it has partnered with Cabela’s to reach a different customer.

The Stratos 176XT is included in Cabela’s master catalog and is being sold in many of the chain’s retail locations, where it’s reaching nonboaters.

“It’s somebody who walks into Cabela’s to buy a hunting related item who says, ‘There’s a boat for $13,000. I didn’t know you could buy a boat for $13,000.’ You start the process that way,” Daffron says. “A boat that we sold zero of last year could very easily become 1/3 of Stratos’ production this year. And Stratos is a large company when it comes to fiberglass production. So I’ve got to believe we’re introducing new people to our sport with this product. I’m convinced of it.”

The expectation
The trend toward larger and more expensive boats is at least partly in response to increases in customers’ expectations, expectations that may be working against the consumer and ultimately the industry.

“Little fishing boats are being left by the wayside,” explains Luke Kujawa, president and COO of Crystal-Pierz Marine, Crystal, Minn. “Everyone wants bigger and better. But it’s a catch-22. The customers want it, but then they can’t afford it so they don’t buy it.”

Kujawa says some of his best boating memories involve fishing with his grandfather as a kid from a small bench-seat fishing boat – the kind of boat for which demand has since slackened.

Just look at the “Good Run” Discover Boating video on YouTube. Kujawa points out that the commercial starts out with the old man as a child fishing with his father from just the kind of boat he fished from as a child. But by the end of the film, he’s taking his grandson out on a cabin cruiser, giving him an entirely different boating experience that creates a different set of expectations.

Kujawa is working to get kids once again interested in a boating experience like he had at their age by hosting fishing clinics and seminars.

The time
In deciding how to spend their recreational dollars, consumers often compare the value of the activity to the time, money and hassle involved in it.

With kids’ lives cluttered with more activities than ever, a family’s time has become increasingly precious, putting pressure on the industry to make boating easier and more hassle free.

“Everyone seems to have less time,” explains Chuck W. Guthrie, co-owner of Lynnhaven Marine in Virginia Beach, Va. “That’s why we do everything we can to make their boats accessible with dry storage, try to find things for them to do, try to get them to put more time into boating because boating is a lot of fun. Somebody that doesn’t put enough time into it thinks it’s too expensive to have a boat.”

Part of the solution comes down to how you market the experience to your customers.

“If you’ve got a boat and you use it two out of every four weekends all summer long, that’s pretty easy to justify,” says Kujawa of Crystal-Pierz Marine. “But if I look at my summer, already I don’t have two out of four weekends available. We have to make people realize how easy it can be to take a little boat to a local lake in an evening. You don’t have to live on the lake or take a weekend to enjoy boating. You can spend half days or early mornings like you would a round of golf. I think the perception is that boating takes so much time that we won’t be able to get our value out of it.”

At MasterCraft, employees are encouraged to use their summer lunch breaks to take a quick run through the slalom course beside their lakefront facility. On-water dealers could offer something similar for their customers, putting a twist on the Power Lunch concept. Whether customers catch a quick bite while they cast out their lines, after they take a loop around the lake on their skis or as they test drive a new model, it’s just one more way to show them how easy and accessible the boating lifestyle can be.

The passion
MasterCraft is sponsoring the Texas Ski Ranch in New Braunfels, Texas, because it believes in its creative approach to selling the boating experience to new customers. (See MasterCraft feature on page 24 for more info.)

The ranch is a retail and entertainment center families can visit to participate in action sports like wakeboarding, rock climbing, skateboarding and motocross, shop for related sporting goods – and boats — and eat at the center’s restaurant.

The center provides an affordable opportunity for visitors to develop a passion for wakeboarding and waterskiing — and the MasterCraft brand. Once that passion blooms, the value placed on the experience increases – as does the amount a participant is willing to spend on it. Because affordability is based on perception, value does play a central role in its equation.

MasterCraft believes the center will lead to more boat sales over the long haul.

The price
Lynnhaven Marine posts green stickers listing each boat’s monthly payment on those models that can be seen from cars passing by their road-side facility. The dealership started using the green stickers “to show people that maybe boating is not as expensive as they think,” Guthrie says.

“We did a study one time and come to find out a lot of our consumers thought we were the expensive dealer in town,” he explains. “While there’s a Sea Ray dealer and a Grady-White dealer in town, because we have a new, nice facility that we keep very clean, people thought we were expensive.”

The lifestyle
To sell the boating lifestyle, Hoffmaster’s Marina in Woodbridge, Va., compares it to something most people are familiar with: car ownership.

Not only does the dealership compare the costs – gas usage is about the same per year, insurance is less and maintenance is a little bit more – it also has a policy in which salespeople distribute a sample maintenance worksheet to every new customer. It lists each kind of maintenance, how often the dealership recommends it be performed and how much it will cost for each type of boat it sells. “It simplifies the process for the customer. And it shows them how honest and upfront we are.”, explains the dealership’s president, Joe Hoffmaster. “We’ve sold us some boats that way.”