I hear the same story from nearly every marine dealer I talk to now. It goes something like this: “Nobody is coming to my showroom anymore.” If this is your scenario, maybe it is time to change how you encounter your prospects.
First let’s look at what we can expect looking into the future of the marine industry:
The huge question then is: Are you going to bet your future on the “Maybes” or are you going with the “Maybe Nots?”
All we know for sure right now is that sales will improve sometime in the future. When and to what level is beyond my ability to forecast, and I would also suggest that you not bet your future on the predictions of other so-called experts. If you are forecasting your cash flow based on someone else’s predictions, you have more confidence in them than I do.
I do believe that the marine industry will never be the same as it has been in the past. The profiles of our customers have probably changed forever.
In the 1950’s, I owned a 15-foot fiberglass runabout powered by a 65 HP outboard that probably cost $2,500 — a typical boat for the owner of that era. We have witnessed a dramatic increase of size, horsepower and cost to the point that you have to be a fairly well-to-do individual these days to go boating. In fact, if you are a typical low-to-middle-class individual, I don’t know where you find a 15-foot runabout with a smaller outboard that may be affordable for your budget.
I am fortunate enough to live in Naples, Fla., where everyone has a never-ending supply of money to buy expensive boats. Well, at least that used to be the case. It’s not anymore. Nearly all of these folks now have to conserve, and boat sales reflect that trend. The Grady-White, Pursuit and Cobalt dealers have been impacted as much as those selling less-expensive boats.
Does this mean that we may have to backtrack and start attracting buyers with lower incomes? Very likely. Could they be minorities that we have failed to attract to our showrooms in the past? I suggest this may very well be the case, and just maybe, this industry will have to rethink how it does business in the future.
Back to square one: Can we continue to operate our dealerships the same way we did in the past? Can we risk betting on this recession ending soon and then have a return to pre-recession sales levels? I don’t think so, which means that we will have to take proactive steps to ensure that we will still be here in two, three, or five years.
I suggest that you reorganize your dealership so that it can survive at lower sales levels. This may be difficult for those who have set their stores up on a plateau level that has high fixed costs such as high mortgages, high taxes, and high utilities. You may have to downsize your store by selling your current location and then moving to one that’s more affordable. Does this sound drastic? Sure, but what are your options? Remember that cash is GOLDEN. I suggest that you basically start over again and work on a pro forma that results in sales levels 20-to 40-percent less than they were in the good years. You can always move in the other direction when, and if, sales levels return to their pre-recession levels.
If prospects are not coming through your doors to look at your boats, then you have to take the boats to where they are. We will have to replace those customers who have left our ranks. Where do you find them? I suggest they are still visiting the parking lots of certain retailers and that if you place your boats there with a sign that suggests boating is affordable, you may attract some buyers. If you attract just three or four at each event, is it worth it? YES! The key here is to get your boats in front of as many people as possible at the lowest possible cost. There are as many human beings out there now as there were before.
I also know that your marketing budget has probably shrunk considerably and you have had to cut back on those expensive ads. If this is your situation, I suggest that you head on down to your local bookstore and pick up a copy of Jay Conrad Levinson’s book “Guerilla Marketing,” which talks about effective marketing with little or no cash.
I suggest that you pay close attention to the “Maybes” and “Maybe Nots” that I have listed and be proactive to ensure that you will still be here in the future. Business as usual will no longer work.
Noel Osborne is a seasoned marine industry veteran with more than 35 years of boating experience. He has owned and operated more than 10 dealerships during that time. Noel has been a key contributor to the success of Yamaha Marine University’s Symposium and Performance 500 educational series for the past eight years. He also has helped numerous manufacturers and dealers improve their profitability and customer service levels.