Why exclusive may be conducive
The last thing some dealers want from Brunswick is a hug. But that may change when they hear about the company’s latest plans to “embrace the dealer.”
Brunswick has long talked about growing its number of exclusive dealers — the idea of which sends chills up the backs of some dealers, who believe their independence is too great a price to pay for the security such a relationship implies. Security, however, is only the beginning of what Brunswick is willing to put on the table.
Brunswick CEO Dusty McCoy paints a pretty somber picture of where the industry is today — and a bright picture of what it can be with Brunswick’s help.
“It is a very cottage industry that’s very unhealthy with low volume and lots of competitors, who many times do this as an avocation and have dealers who have no real opportunity to make money with them,” he said. “There’s no real value proposition for the dealers on a long-term basis in order to improve themselves and become more competitive and healthy.
“Therefore, we’ve been looking at what we can bring to the dealer network that provides the dealers a value proposition they can get nowhere else.”
White space filled
Brunswick’s efforts to “fill in the white space” in its boat brand line-up — a strategy designed to allow the company to become dealers’ sole supplier — have been making headlines for several years.
Now, save for a tow sports boat brand, the company is done — at least within the United States, McCoy said during a speech at Raymond James’ Institutional Investors Conference in March. That frees up Brunswick to focus on some other dealer-related initiatives.
Most people have heard of Brunswick’s Master Dealer certification and training program, which it plans to extend through all its brands (see the July issue for an in-depth look); its efforts to speed up parts delivery through its Brunswick-owned distribution companies and through systems set up with Fed-Ex and UPS; and its efforts to improve electronic communication with dealers through its purchase of, and investment in, IDS. Here are a few other initiatives Brunswick is pursuing.
1. A Certified Pre-Owned Boat Program — Brunswick and five of its dealers experimented with such a program in 2005 with remarkable success, according to McCoy. While there are still some details to work out, he expects the company will eventually roll-out the program nationwide. [For more information on the used boat market, see page 18.]
2. Benefits For Dealers’ Employees — Most dealers are unable to offer their employees a full benefits package. Those who do often find it very expensive. McCoy envisions Brunswick offering its dealers a benefits package for their employees — including such things as medical, dental, retirement and savings plans — that will put an end to a dealership culture in which high turnover is the norm.
3. Slips For Customers — After several years of evaluating its potential role in preserving water access, Brunswick purchased its first marina this winter through a partnership with boat dealership chain MarineMax. Now, Brunswick will roll out this model across the country, said McCoy, offering its dealers the advantage of access to marina slips for their customers.
4. An End-To-End Warranty — The “Holy Grail of the boating industry” is something Brunswick plans to offer dealers once its model is complete, suggested McCoy.
5. Sea Schools — Though Brunswick is working to make boat operation more intuitive through features like its joystick docking control, McCoy believes Brunswick may have a role to play in helping boaters become more comfortable with its products so they can better enjoy the boating lifestyle.
6. Financial Services — In addition to Brunswick’s dealer wholesale and extended warranty financing, it now has partnered with HSBC to launch a private label credit program that will be offered through Brunswick dealers nationwide to provide customers with a convenient way to pay for their purchases.
Brunswick is one of the few companies in the industry with the resources and the desire to help its dealer partners solve some of their longest standing problems. But it wants something in return as well.
“We’re going to be asking that dealers take on large, protected territories, that they be exclusively Brunswick in our model when we’re completed, that they will agree to continually reinvest in their business, that they will be certified according to our certification standards, and that they will enter long-term dealer agreements with us so that we’re not into this year-to-year arm wrestling that we go through,” explained McCoy.
The industry giant may only be 30 percent down the road to its goals to change the industry, but with offerings like this, some dealers may find themselves 100 percent ready to jump onboard.
