Learning from the best

For the second year, Boating Industry
magazine gathered several of its Top 100 dealers together for a panel discussion at the Marine Retailers Association of America’s annual convention in Las Vegas. Senior Editor Liz Walz moderated the session asking representatives from five Top 100 dealerships — Galati Yacht Sales (No. 1), Seattle Boat Co. (No. 3), Taylor’s Boats, Inc. (No. 6), Hall Marine Group (No. 7) and Marine Connection (No. 14) — to share their thoughts, ideas and tips in a number of areas related to dealership operations. Here is an edited transcript of the discussion. To listen to the entire session online, please visit www.boatingindustry.com.

Richards – I think it just comes back to the basics and the fundamentals. We all know the saying, “You can’t manage what you don’t measure.” And we make sure that on a weekly basis we’re managing our inventory levels. One of the things that we do at the end of every year is we do a complete analysis of our sales. And we have a multiple-year history that goes back looking at what our sales trends are and what product moves and what doesn’t.

And at the end of every year we evaluate every single one of our brands and we analyze that by make and model. We figure out what sold, how it sold, what margins we sold at, what options sold best, what engines sold best, and then we use all that information to project forward on what we’re going to order for the coming year.

We do the exact same thing, we have a sales strategy, for every single model of boat. Is this a value boat, a premium boat, a high-margin boat, a low-margin boat, what color does the boat need to be, what options, what engines, how many of that unit are we going to sell? And again, what is our sales strategy around that? Who is the customer and what’s the purpose, intent and use of this boat?

And we’ve set those goals out, we chart it out according to our seasonal trends and then we watch that on a week-to-week basis. Every week we have manager’s meetings and we analyze that inventory in accordance with our goals and our sales trends to make sure that we’re tracking accurately so that we stay on track with inventory. If we need to adjust something, if we need to have an incentive around a certain boat, we know that on a week-to-week basis. So it’s always measuring it on a weekly basis.

Taylor Richards, owner and president of Taylor’s Boats (based in Draper, Utah) on how his dealership maintains one of the highest turn ratios in the industry.

Bohling – Really [the program] has accomplished two things. First and foremost, it keeps our existing customers coming back, but even more so is that it has provided that much-needed high-quality, fast-turning used boat that’s in our main brand. So it is typically taking in that trade-in, in fast-turning, good quality boats.

There is risk. You print basically a guaranteed trade value at a percentage of what their purchase price was. And we’re willing to do that on any brand of boat from any dealer. So if the dealer next door sold a boat three years before, we want that boat. And we go back to six years, we put this program in place for up to a six-year-old boat, so they’re current, late models, they’re fast-turning models, they’re usually good profit models.

But some of the keys to success are that we promote this just before our boat show and the initial boat-show discount applies. So the consumer still believes they are getting the best buy at the boat show. The customer has the confidence of the value, it simplifies the process, and it makes it easy for us to close on the spot, right there at the boat show. The value of the trade is established, it’s put in the new boat, here’s the boat-show discount, and boom, it happens very quickly.

The key though is that you have to have plenty of over-allowance on the new-boat side. It’s not a 2-for-1 kind of a program. In other words, you’re not selling two boats for the profit of one boat. You need to have enough over-allowance so that you can hit goal margins on both the new and used boats, so that’s the trick to it.

And the other part of it is, the way the process works for us is that you’re required to trade up, so customer can’t come in and buy a 20-foot boat one year, then come in the next year and buy a 20-foot boat again. They need to go up to 22, and oftentimes they go up to 32. Then the program works really well.

Alan Bohling, president of Seattle Boat Company (based in Seattle, Wash.), on the effectiveness and benefits of the company’s Great Exchange Program, which encourages customers to trade-in their used boats for new ones by guaranteeing a trade-in allowance equal to a certain percentage of the original purchase invoice, based on the model year of the boat.

Plymale – The sales focus chart provides us the ability to track our sales staff by location, by brand. What it does is it allows our support staff and our sales management team the ability to place that customer or that lead with the best opportunity at all times. Let’s face it, we don’t want a Regulator primary sales person to work with one of our Viking customers if they’re not equipped to do so. So what we have done with this sales focus matrix is provide our folks the ability to match the customer with the brand at all times.

In addition to that, in order to stay in a “primary,” “secondary” or “able-to-sell” role, [salespeople] are having to go through the annual training courses that are available through our manufacturers, and keep up every year with those training criteria to stay primary or secondary – primary meaning that every lead that comes through that store is funneled through that particular salesperson, giving us the best opportunity to capture that sale.

We use this matrix as an opportunity to track training [and] disperse leads. Education right now is the key to capitalizing out there in a competitive marketplace like we have. Having the locations that we have throughout the Gulf Coast, and as spread out as we are, our sales support staff rely on this matrix in order to make sure that we match that customer with the best opportunity every time, We even staff our boat shows and our other events in accordance to this matrix. It’s a great tool, it’s worked out wonderfully and it’s something that we’re going to continue to grow with as we grow our locations.

Darren Plymale, general manager of Galati Yacht Sales (based in Anna Maria, Fla.) on a measurement tool the company uses called a sales focus chart.

Hall – Sometimes we’d see some of our sales staff struggle or stumble dealing with a customer on the larger boats and we also saw that the sales staff have a genuine desire to learn about this product, and we saw this as an opportunity to train them.

We decided to hold our annual sales conference this last year at one of our coastal locations, in Charleston, S.C., where we sell the bigger products. At this sales conference we covered the differences between selling big boats and small boats and inland vs. coastal boating. We spent a lot of time on the big-boat systems so that when the salesperson is engaged with the customer they will understand the systems and make a better presentation.

We did a lot of hands-on training, where we actually took them out on the larger boats and exposed them to this environment. We covered stuff like navigation, handling, the proper way to tie the boat up, and the differences in the environment of the coastal market. One of the best things we did was took some of our more experienced sales staff and actually let them share and demonstrate some of their best practices and techniques in selling larger boats, actually going through the sales presentation with all the other guys watching so they could see how it is done by the best. That was very powerful.

We had a big increase in our large boats this year in sales. I don’t know if can attribute all of that to the sales conference but it certainly did help. Training, I think, is key for our future success.

Jeff Hall, owner of Hall Marine Group (based in Lake Wylie, S.C.) on the benefits of the training conference the company held last year for its sales staff.

Lasilla – I definitely think it had a very big impact [on the CSI increase] having the boats triple-checked. We start by having the technician that performs the service on the unit, of course, check his work and then there will be two more people who will check. We’ll have our service manager follow up and double check that, and then the boat will be washed, cleaned and detailed, and then we’ll have the third person, our operations manager, check. A lot of times, we’ve discovered gelcoat defects and things like that and we only discover those right when we’re detailing the boat at the eleventh hour, so the final check comes after the boat is all cleaned.

Also, it’s accountability. If you’re the technician and you know that your work’s going to be double-checked, well then you’re pretty darn sure it’s going to be right. It’s lessened our “Be Backs” and its also lessened our “We Owe” forms that we used to have to submit to new boat buyers when we might have overlooked something and now we have to give the guy a “We Owe” and that’s something we have to address in the future. So it’s cut back on that. It’s kind of like a speed trap, if you know there’s a radar gun down the street, you’re going to make sure you’re not speeding.

Mark Lasilla, president and owner of Marine Connection (based in West Palm Beach, Calif.) on his dealership’s quality assurance program, which ensures that all service units are inspected three times by separate individuals, so that all problems are caught before the unit is returned to the customer. It helped the dealership’s CSI score increase by more than 4 points last year.