Return to your roots

Twenty years after starting out as a good-sized service company, South Shore Marine finds itself going back to the future.

“We’re getting back to our roots a little bit more,” says Tom Mack, president and owner of the Huron, Ohio, dealership. “For the last several years, sales have contributed the lion’s share of our gross profit, but in 2007 and 2008, we relied increasingly on service for our gross profit. And our 2009 budget includes an even larger percentage coming from service.”

Mack is implementing several initiatives to ramp up service in light of its growing importance, including a simple color-coding system to track labor costs relative to billable hours on a daily basis. As a result, some areas have already seen as much as a 20- to 25-percent gain in gross profit margins.

South Shore Marine’s pre-owned sales philosophy is another business strategy taking on greater importance in the current economy.

“Many dealers look at a trade-in and think, ‘How cheap can we get in and out of this thing?’. Our approach is almost the opposite: ‘How nice can we make this boat?’,” says Mack.

To leverage that expertise, South Shore Marine is now targeting banks flooded with repossessed inventory both as a broker and as a customer interested in product turned over to auction or liquidation companies. And because the dealer is accustomed to doing careful inspections of trade-ins, it can cherry-pick the offerings and end up with the boats offering the best resale value.

Like many boat dealers, South Shore Marine has had to cut staff, but with its long-term survival in mind, Mack describes the process as downsizing by raising the bar with the service people. Believing that cross-training is key to ensuring that the remaining staff has a diverse skill set, the company has invested in internal and outside training opportunities and reports a quick payback.

Perhaps the most important survival strategy at work at South Shore Marine, however, is a commitment to staying positive.

“Our customers still view boating as fun … and I think we owe it to them to stay positive and adapt to the market to be sure that we will be here to continue to serve them in the future,” he says.