Editors’ Picks | Jonathan Sweet: Boat Town Inc.

Boat Town Inc.
Austin, Texas

Coming into 2011, Boat Town was already a successful dealer – firmly in the Top 100 as the company had been every year since 2006.

Despite that success, Boat Town made significant moves in its operations, marketing and sales. This is one company that is not resting on its laurels.

All those changes combined to help the company grow revenue by 40 percent year-over-year, and, more importantly, grow profits as well.

Boat Town approached 2011 with an entirely new strategy focused on promoting the value of the company’s high-end boats. First, Boat Town eliminated the product that didn’t fit that message, focusing on its three remaining boat brands.

“We strongly believe that focusing your energy and efforts on fewer brands that make good margin is the correct business model for profitability in the coming years,” says company president Clayton Raven.

The next step was to zero-in on the marketing for those brands, combating the price objection by focusing on their inherent value. For example, Boat Town’s “Yes You Can” campaign emphasizes the savings over the lifetime of owning a Cobalt boat. The campaign was used at local boat shows, with yellow stickers emblazoned with “Yes You Can” on the windshields of Cobalts.

The strategy was used in direct mail and on the company’s billboards, with the phrase “Big Luxury – Small Price” featured prominently. Point-of-purchase materials throughout the showroom also follow the same theme, with statements such as “Cheap boats are made to sell not own.”

“A lot of potential clients don’t even shop Cobalt because they believe it will be out of their price range,” Raven says. “But when clients see what other mass-produced boats are charging, Cobalt is looking very reasonable especially for the quality.”

Boat Town changed its boat show strategy, cutting its space in half, reducing expenditures by 58 percent once labor costs were included. That savings was then applied to private boat shows, the most successful of which was held at Horseshoe Bay Resort & Marina on Lake LBJ, a vacation destination for Houston and San Antonio residents. Boat Town was able to drive more sales and get more exposure without increasing its boat show budget.

Focusing on other markets, especially the San Antonio area, is an important part of Boat Town’s plans for future growth. Long term, the plan is to open a San Antonio location, for which Boat Town has already purchased property. Boat Town is marketing to the San Antonio metro, which has resulted in additional sales to vacationers from the area.

Already a customer satisfaction leader, Boat Town increased its internal emphasis on keeping customers happy. The dealership tied its “Boat Town Bucks” employee bonus program to the CSI for all three manufacturers, with a minimum of 98 percent required for each. Anytime Boat Town receives a less-than-perfect evaluation, the department manager or managers personally contacts the customer to attempt to fix the problem.

“Our customers are accustomed to feeling very special and valued at our business,” Raven says. “We believe in promising a lot and delivering even more.”

Boat Town made several other changes that improved cash flow in 2011. The company added two new sources of revenue by becoming an authorized tire dealer and opening a new storage facility for boats and RVs. Management replaced the lowest-performing salesperson with a new team member, which has increased closing percentages and gross margins. Finally, the dealership implemented a new technician compensation plan that improved margins in that department.