In all but the most temperate climates in the country, there will always be an “off-season” that boat retailers will have to weather. Sometimes it’s a slowdown, and sometimes it’s more of a grind-to-a-halt, batten-down-the-hatches survival mode. But with some planning and strategic thinking, a number of businesses have actually found ways to thrive even when buyers aren’t showing up waving their checkbooks.
Boat makeovers make money
Talk about tough winters. If there’s anyone who knows the brutal realities of a boating off-season it’s Larry Russo, who owns three Russo Marine locations in New England. Staring down a glut of pre-owned boats from trade-ins to repos of all shapes and sizes, and recognizing that 2010 would not be a robust year for new boat sales, Russo and his team decided to get aggressive with a campaign targeting customers with service, repowering, restorations and upgrades. What resulted was a much more extensive program than he expected.
“You know it’s always been easier in the past to sell a new boat,” says Russo. “But we decided to create an Extreme Boat Makeover program that literally takes a pre-owned boat down to the fiberglass, and it just mushroomed. Now we’re enjoying the profits from those endeavors.”
After hiring a media agency to film a video of a boat restoration and showing it at the Russo Marine booth during several New England boat shows, the dealership has been able to generate more than $250,000 in additional parts and accessory sales and as much as $350,000 in incremental service business over the past 10 months. Russo says the new program has given his team an emotional lift that may outweigh the financial benefits.
“The concept of creating Extreme Boat Makeover has put some fun back into the dealership,” says Russo. “In really bad times, you can’t generate enough service to save your business, but it helps fill the voids and lulls. It helped us keep people employed. We just made up our mind that last winter was not going to be all gloom and doom.”
The new initiatives have brought a buzz to Russo’s customer base as well, particularly those who had thought of the business as only a new boat dealer. The business has had a lot of success attracting do-it-yourselfers, who exercise a lot of influence in their communities.
“Most of us boat dealers that think of ourselves as ‘new’ boat dealers kind of forget our roots, servicing customers and asking for their business,” Russo explains. “We can always find a way for them to spend money on what they love, either in small doses or, in some cases, extreme doses.”
Boosting customer awareness
Leveraging boat storage for specific service opportunities was the angle Buckeye Marine took last winter up in Bobcaygeon, Ontario, Canada. Running a special winter service program not only helped keep techs working over the off-season, but had the added benefit of increasing storage business in the process, according to Carly Poole, Buckeye marketing director.
“On the back of our storage information sheet, we outlined four specials on typical boats that should be checked or replaced regularly, but that customers often overlook, such as bellows and impellers,” Poole said. “We also offered wash?and?wax options, which are much more extensive detailing than the cleaning packages included with the storage.”
Discounts encouraged customers to have the services done over the winter, and it gave Buckeye the opportunity to educate boat owners about rarely discussed items, how often they should be checked and what symptoms they should be looking for that would indicate wear.
Don’t be passive, search for service
Putting a new level of responsibility on the service department, the Hall Marine Group – headquartered in Lake Wylie, S.C. – is continuously reminding its technicians to seek out and keep track of service work that customers wanted to delay or non-urgent maintenance projects. When things slow down in the service department, the “Work To Be Done Later Log” is what keeps individual technicians on the job.
“We continue to use that log and really emphasize in emails to our service managers that even while you’re going 1,000 miles an hour during the busy months, you have to keep track of projects that customers put off,” says Jeff Hall, one of the owners of Hall Marine Group. “We let them know that it’s a big part of their job. It’s a pretty simple system with a manila folder, but the more things they can add during the busy times, the better off they are when things slow down.”
Hall says that changing over from direct mail to email service reminders has saved money while proving a more effective way to communicate with customers. The dealership, which carries Sea Ray and Boston Whaler, has also spent more time honing its service pricing, carefully checking in new boats to look for warranty issues, and doing dry-stack walkthroughs to find service items that may have been missed.
Keeping it clean and easy
In addition to expanding its Captain E-Club monthly newsletter with special offers on boats and accessories and member-only private sales, Hampton Watercraft & Marine in Hampton Bays, N.Y., has made it a priority to keep its facility as clean and neat as possible. Joe Villareale, who owns the dealership with his brother, says he wanted to win over customers at the company’s three locations with basics such as new signage and a tidy parking area.
This past off-season the dealership, which carries Tiara, Formula and Boston Whaler, also introduced a new “balanced-billing” option for winterization, off-season storage and summer docking. The program, which about 20 percent of customers took advantage of, spread out payments from three larger bills to a smaller monthly bill to simplify budgeting.
“We haven’t raised any of our winterization, storage or docking rates for the past two years to help keep our customers,” says Villareale. “We also increased our dockage advertising to make sure we were always at capacity. We just haven’t really had to do that in the past.”
Exploring the alternatives
A limited market and an even more limited boating season means dealerships have learned to fight for revenue in the best economic climates and also utilize a similar strategy in a severe downturn, according to Rob Soucy, president of Port Harbor Marine. The dealership, which Soucy and his two brothers purchased from their parents in January 2007 and includes six locations in Maine, has always taken a close look at any potential profit center beyond boat sales including slip rental, storage, service and boat rentals to be proactive in maximizing revenue.
“We’ve been more aggressive with brokerage in buying repos and finding every opportunity to locate every piece of distressed inventory in the area,” Soucy says. “We did the same thing with storage and winter service work by creating incentives to challenge people in each department to reach a goal personally and benefit the company as a whole. We don’t wait for the phone to ring. We call customers to make sure they have everything they need.”
One new profit center for Port Harbor has been a membership boat club concept that uses a simple system originally designed as an employee benefit to reserve and use a boat for a day from a pool of available vessels. While 2009 had six paying members, the program has grown to more than 20 members in 2010. The only investment has been upgraded reservation software and marketing through the dealership’s weekly e-newsletter.
Another surprise revenue source came as a result of a multi-year improvement project at Port Harbor’s flagship location in Portland, Maine. After creating a method of building their own concrete docks in-house, the dealership began a program to replace the main and secondary runs at its 250-slip marina. Last year, Port Harbor Marine struck a deal with a local dock builder to supply the concrete building components for some of its projects. Soucy said the program not only brings in additional cash flow during the winter, but it enables idled employees to return to work earlier after the off-season.
“Is there a silver bullet? Absolutely not,” says Soucy. “It’s just a matter of trying and doing and being committed to something. A lot of dealers get caught up in a campaign versus a commitment. We like to put things in place for the long term. This is a good time for that thinking because it’s really starting to pay dividends. The strong dealers are getting stronger, the weak ones are getting weaker.”
Hitting the mark
Duchow’s Boat Center in Pewaukee, Wis., took the problem of uneven service revenue and turned it into a solution that transformed the service department into the steadiest area of the business.
Since instituting a standard that requires each technician to bring in $1 worth of work for every 50 cents they get paid, there hasn’t been a single month where the techs haven’t met their goal, according to owner Mark Duchow. Technicians receive a monthly bonus reaching quotas that have been set for them.
“From that point forward, we’ve realized a tremendous increase in our technician efficiency, our service business and our service profitability,” Duchow explained. “The most important net result in my mind, however, is that we can count on, and budget for — in every single, solitary month — a consistent revenue total that is twice as much as our service payroll.”
The program has brought some unexpected benefits as well, such as a behind-the-scenes team mentality.
For example, if a tech is behind on his ratio, he can request more retail work from the service writer. Duchow says the system has matured to the point that the service writer knows he is responsible for giving everyone a chance to meet his or her goals. He can divide retail and warranty work to reach the quota.
“In essence, what we’ve done is create a system where everyone in the service department — from the service manager to the service writer to the techs — is on exactly the same page,” explains Duchow. “It’s very easy to measure.”
Whether it’s holding the line on pricing, turning boat storage into service opportunities or charging forward into the world of social media marketing, the common thread is innovation and a refusal to stand-pat when one part of the business suffers.
By exploring and encouraging new ideas, it’s possible to turn the off-season doldrums into new tools for marketing, prospecting and retaining customers.