Out of the shadows

The boating industry has one less secret today.

For the past 12 years, a small group of dealers has been meeting behind closed doors, communicating via a password-protected Web site and conducting business together through confidential agreements with industry suppliers.
The competitive pricing, networking and best practice sharing that have resulted helped members of the Boat Dealers’ Alliance maintain and even increase top positions in their respective territories.

“Staying as competitive as possible was the initial lure,” says Mike Hebert, long-time BDA member, the group’s president and owner of Texas Marine. “There is safety in numbers and in volume.”
Over time, BDA members found the ideas, best practices and business strategies they shared with each other had a value equal to, if not greater than, the purchasing programs.

But those benefits are no longer enough for the group’s members and suppliers in today’s competitive marketplace – one in which they’re going up against the likes of MarineMax, Bass Pro Shops, Cabelas and Gander Mountain. So, last year, BDA began taking steps to transform the organization into much more than a dealer buying group.

First, the group hired Bob vanVollenhoven, whose career includes long-term stints at Brunswick, Mercury and Yamaha, as its full-time executive director. Then, it began consulting with Wendt Productions on a marketing strategy. And finally, BDA asked Boating Industry magazine to help the group remove its secretive cloak, revealing its members’ identities and collective plans for the future for the first time in an effort to take the
organization to a new level. To achieve that, BDA is aiming for significant growth in both membership and supplier partnerships.

In the end, the group’s members and suppliers expect to gain a new edge over the competition by giving their customers something more. That “something” is intended to be the best of both worlds: the personalized service, nimble management and product diversity of a local owner-operated dealership with the customer programs, events, packages, pricing, service network and marketing prowess of a national chain.
“The owners are long-term dealers in their markets,” says vanVollenhoven. “Some are third generation, and their decisions aren’t driven by Wall Street. Their focus is truly satisfying customers. They’re tied to their local community.”
BDA has named this initiative “Boater’s Edge” – a co-branding strategy in which each independent dealer member’s customers become the group’s customers with access to all that they collectively offer, without losing the value of a business with a long-term presence in the local community and an owner on site.

“I want to make it very clear to the customer that we’re distinguishing ourselves from the rest of the competition,” says Brian Olson of Boats Inc., a founding BDA member and its former executive director. “I hope that the name Boater’s Edge is synonymous with quality of service, the gold standard in the industry.”

Hide and seek
Visitors to BDA members’ dealerships will see their dual commitment — to the group and to their individual business — at their storefronts, where signage will display both the dealer’s brand and the Boater’s Edge brand.

What may not be so clear are the identities of the supplier partners that are co-architects of BDA’s plan. While the relationships between the group and its suppliers have become much closer over time, their names have been closely protected since the group’s inception in 1996 and will continue to be for the time being. What is known is that they provide BDA members with products and services such as outboard and sterndrive engines, financing and extended warranties.

In the beginning, these relationships were based simply on purchase agreements. Together, members of the group negotiated to receive the suppliers’ best prices — those they gave their highest-volume clients — often over a multi-year period. While this didn’t affect the group’s individual dealer agreements — most of which remained year-to-year – it clearly provided them an advantage.

“If nothing else, the relationship was guaranteed,” explains Olson, “which was a big deal because that didn’t exist with our dealer agreements.”

In return, the suppliers were able to increase their share among some of the industry’s top independent dealers — dealers that have continued to improve and grow by using the advantages of BDA membership to become more profitable and invest more money into their businesses’ future.

Over time, BDA and its suppliers have realized they have many common goals. All want to improve and grow by providing a better boating experience to their customers. And none believe an industry dominated by a handful of large retailers is healthy.

Some manufacturers are concerned that conglomerates like Brunswick and MarineMax will roll-up all the “A” dealers, leaving the independent boat builders with “B” and “C” dealers competing for a shrinking piece of the pie, says Hebert. Other suppliers — especially those that do business with some of the industry’s largest players — want to avoid putting all their eggs in one or two baskets.

Recognizing these shared interests, the dealers and suppliers have begun strategizing together. In fact, as BDA’s membership has evolved significantly over the years, many of the new members have come at the recommendation of its suppliers.

“We’ve had vendors recommend dealers to us that they’d like to have as customers that they haven’t been able to recruit themselves,” explains Hebert.
While BDA was launched with 14 members, 20 dealers belong to it today, seven of which are from that original group. The seven that are no longer members had different reasons for leaving the group, says Olson. One sold his businesses, another retired, one passed away, and another became an exclusive dealer for a Brunswick brand, for example.

Those that are left, combined with those brought into the fold, make for a powerful group. At least 18 of the 20 are currently certified, and one is in the process. Half are Top 100 Dealers, and the group expects that number to grow.

“Working with our vendor partners and within the membership, we’ve been fortunate to attract dealers with best practices,” says vanVollenhoven. “That joint synergy with our vendors has been the right formula for growth.”

While its members today do business at 38 locations, the group’s five-year plan includes, expanding to between 75 and 100 locations, he adds.

“What Boater’s Edge can do is strengthen their national presence,” vanVollenhoven adds, “give them another platform to show the industry and the consumer that this is where you want to do your business.”

BDA wants to expand its supplier base as well. Its members carry more than 70 boat brands, but it has only partnered with a handful of them, for example. If it makes good on its plans, the appeal of the new, larger group will likely grow amongst many types of manufacturers and service providers.
“There are a lot of manufacturers,” Hebert explains, “that have come to us and said, ‘We’re looking for a direction in how we’re going to stay competitive in this market and continue to grow our market share. We’re concerned we may not have a good distribution network with the conglomerates putting the independent business people out of business.’”

Connect to consumers
BDA’s members believe in the power of the Internet, and for that reason, the Boater’s Edge brand will be marketed most heavily online. Its Web site, www.boatersedge.com, is expected to go live this month, and all advertising — most of which will be digital — will drive consumers there.

“Most consumers are using the Internet as their primary source of information,” says vanVollenhoven. “That’s where most of our budgeted marketing dollars will go.”

In the beginning, the site will offer two main features: information about the group and a pre-owned boat database through which visitors can search the entire group’s inventory. It’s clear from the database’s position atop BDA’s priority list that the group is a strong believer in the opportunity it represents.

Long-term plans for the site are much more aggressive, however. BDA wants to develop an “online marina” in which boaters could socialize with each other, sharing tips, advice and even videos, according to Alan Wendt, CEO of Wendt Productions. The site will also become a repository for 90-second to 3-minute Webisodes on how-to topics such as taking care of boat canvas and basic engine maintenance.

“When you let customers have a voice, you can join the conversation,” Wendt says, “and you get a much quicker sense of what you’re doing right and what you’re doing wrong in a dealership.”

It will likely be a year before the social network portion of the site is up and running. And while the individual dealerships will begin sharing the Boater’s Edge concept with their customers right away, it will get further exposure at fall and winter boat shows, at which members expect to display signage.

“There won’t be bands playing and big ads,” Wendt explains. “That’s not what this group is all about. They are very deliberate and careful. If there’s one thing I learned from MarineMax, it was that you can’t rush. It’ll take five years to establish this brand among consumers.”

Learn from the best
Boater’s Edge is a similar model to that of Ace Hardware, the group suggests.

“Ace affiliates have all the advantages of Ace products and price points, but are run by the same people [who have always run the hardware store] in the same town,” says Olson. “That’s how we’re seeing ourselves positioned, as opposed to a Home Depot where every one is the same and they’re all run the same.”

But while MarineMax might be the closest thing to the marine industry’s Home Depot — and certainly is considered one of BDA’s main competitors — the group isn’t shy about learning from its example. In fact, by marketing Boater’s Edge as a national network of dealerships capable of supporting customers from coast-to-coast, they hope to be more competitive with the likes
of MarineMax.

BDA members’ customers will benefit from that national presence when they travel with their boats or if they relocate, as they’ll be given the same priority in other members’ service departments as if they had bought their boat there.

The group also hopes to offer joint customer boating trips and rendezvous, another area in which MarineMax has experienced success. But they’re crystal clear on the fact that they don’t want to follow in their competitor’s footsteps when it comes to MarineMax’s public status.

“Our members want to stay owners,” stresses Hebert. “They’re not looking for an exit strategy. They have a long-term commitment to their organization, their community and the industry.”
BDA members believe they have certain advantages over MarineMax and other large retailers with a presence in the marine market. Not only are members spared the burden of satisfying shareholders, they aren’t hampered by policy and budgetary restraints. That means that when a customer walks in the door with a repair or warranty problem, the independent dealership is more likely to take care of the long-term relationship by making it right, regardless of the cost, suggests Olson.

The diversity of product offerings provided by the group is another strength, according to BDA.
“We’re not just tied to one manufacturer,” explains Hebert. “In different parts of the country, there are different boating needs. The advantage of our group is our members’ focus on their local markets. We feel one of the challenges that the bigger conglomerates have come up against is a more limited product offering.”

Finally, there is the timing. While many cite the current make-up of the BDA membership as a key reason the group was able to reach consensus on moving forward with Boater’s Edge, they also believe market conditions make now the right time to launch it.

“There are opportunities when times are tougher,” says Hebert, “when an organization like BDA and the benefits it brings are even more valuable, not only to other dealers that may want to be members but to other manufacturers.”

“Boat builders want quality retailers,” adds vanVollenhoven. “That’s what Boater’s Edge will bring. They want dealers that are professional, understand their markets and are driven by the consumer to provide best practices. A group like BDA, which has already gone through industry certification and already formed best practices – is attractive.”

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