When compared to boat dealerships, manufacturers and suppliers, which are suffering under the dramatic boat sales declines of the past year, the marina segment — with its focus on current boat owners — has been considered relatively protected. However, these businesses haven’t escaped the impact of the downturn.
We interviewed more than a dozen marina operators to learn how they’re adapting their businesses to find success in these tough times.
Narrow your focus: A recession is no time to be marketing to the masses. If someone is not already keeping their boat in a marina, they’ll likely wait until better times before considering such an expense. But with slip space open for the first time in years in some markets, now is a good opportunity to tout your competitive advantages to slip holders at other marinas and an even better opportunity to expand the business you’re conducting with current customers.
Not only is such marketing likely to be more effective, targeting a smaller group that is already familiar with your brand is typically much less expensive. Getting started can be as simple as introducing bulletin boards in high traffic areas throughout your facility where company news, events, and product and service promotions can be posted. Open it up to customers and community organizations, and you’re also providing a valuable service.
An increasingly popular alternative is a weekly or monthly e-mail newsletter. Use a service or your own internal resources to provide useful tips, advice, news and interest pieces on various aspects of the boating lifestyle, from on-water destinations and boat friendly recipes to boat usage, maintenance and repair. Then, don’t be afraid to pepper in some content and coupons related to your marina’s unique events, products and services. If you don’t already have your customers’ e-mail addresses, consider a drawing in which customers who provide them are entered into the running for a coveted grand prize.
Want to take targeted marketing to the next level? Consider a unique initiative like that adopted by Vinings Marine Group. Earlier this year, the company, which owns 16 marinas along the East Coast, purchased a 1957 Trumpy Motor Yacht, “The Chesapeake,” which it uses as a floating ambassador to advertise its East Coast facilities, even when visiting the competition.
Add profit centers: Because your best sales opportunity is with your current customers, consider what products and services you could add to your offering to better serve them and make some additional profit.
Many marinas that currently offer boat storage have been expanding it in an effort to expand the bottom line. Virginia Beach, Va.-based dry-stack marina Lynnhaven Marine, for example, is developing outside rack storage to offer potential customers a less expensive option. Upstate New York’s Castaway Marina is working to obtain the permitting to expand its trailer launch service, which lets customers leave their boat on a trailer in the marina parking lot and then launch it themselves with their own vehicle during business hours. And Parks Marina – Okoboji, Iowa – built a 30,000-square-foot rack storage building to handle larger boats.
Food, beverage and boat and engine services are other potential profit centers, as are boat rental and boat clubs. Oklahoma-based Arrowhead Yacht Club & Marina says its food, bar and service offerings are the main things that set it apart from competitors.
“Mom does not want to cook and Dad doesn’t want to look at some mechanic’s butt while he works on his boat,” explains Joe Harwood, owner. He says that the company’s six marinas haven’t been impacted by the downturn. Occupancy is up, despite a rate increase earlier this year.
Think PRD: That’s parking, restrooms and docks: These three areas of improvement are among the most popular due to the significant impact they can have on the customer experience and perception. Paved and lighted parking lots not only set your business apart from the pack, they make visiting your facility cleaner, easier and safer for customers. So do clean, functional, well-lighted restrooms and well-maintained docks.
Host more and better events: A great way to boost loyalty and add value to your slip holder’s experience is to enhance your events and add more. This can range from appreciation parties to educational events. The more opportunities you provide for customers to use their boats, interact with each other and your team, and enhance their boating lifestyle, the more likely they will be to continue as your customer and the less important price will become in future decisions.
For example, customers at Boats Inc. – based in Connecticut – have become accustomed to its annual King of the Dock event, a combination fishing tournament, themed costume party and cooking competition. Awards are given for the most fish, most creative costume and tastiest dish.
Invest in expansion: It’s a terrible time to put your property on the market, but a wonderful time to explore the opportunities for expansion or future locations. At Lynnhaven Marine, owner Chuck Guthrie took advantage of the dip in real estate values to buy land he expects to eventually develop into a new facility.
Partner up: When marketing resources are limited, it makes more sense than ever before to share costs with other local businesses with which you share a similar customer base. Candidates might include restaurants, high-end car dealers, jewelry retailers or real estate agencies.
Arnolds Park, Iowa-based Oak Hill Marina, for example, works with off-lake condominiums and other land-locked housing developments to help members get access to the lake.
Other opportunities include partnering with local marine businesses that complement your offerings, such as boat dealerships, mobile service operations, boat rental companies or boat clubs. Not only can such relationships represent revenue opportunities, they can improve your customers’ experience, giving your business the feel of a one-stop-shop for boaters.
Go high tech: Despite the downturn, many marinas added high-tech offerings this year, including digital cable and Wi-Fi service. In fact, Boats Inc., which measures its customers’ Wi-Fi usage, says it has steadily increased. Last year, the marina also began offering its customers what it calls the “Captain’s Lounge,” an office with newspaper, computer, printer, fax, scanner, telephone, stocked refrigerator and coffee for their use.
It’s also a good time to consider Web site upgrades. Port Harbor Marine’s recent upgrades included the addition of a live Web cam at one of its marinas that prospective customers can use to get a glance at the facility and current customers can use to check on their boats. Each user gets a three-minute window in which they can control the camera. President Rob Soucy says it has become one of the Web site’s most popular features. The Portland, Maine-based company is considering adding another camera at one of its other marinas.
Rethink your rates: When it comes to the rates marinas charge for dockage and other services, there is no scientific formula for what each market will bear. However, in a year like this, it’s an area marina operators should monitor closely.
There are three basic approaches marinas seem to be taking. The first is to lower rates in hopes of increasing business volume. For instance, Lynnhaven Marine successfully lowered its boat cleaning and powerwashing rates in an effort to generate more jobs. The company also lowered margins on gas to make boating more affordable.
The second is to raise rates in an effort to increase profitability. This is most effective when either the rates were below market average or customers clearly perceive the marina’s added value. Boats Inc. raised dockage rates by $10 per foot early this season in an effort to help the marina pay for a $75,000-plus government-required system to collect and treat discharged water from its powerwash station. That went over “like a cell phone ringing at a funeral,” according to owner Don MacKenzie. The marina quickly nixed the increase, sending out a letter of explanation to customers, which was well received.
The third is to introduce promotions and payment plans that make slip rental and other services more affordable. Boats Inc. has begun offering its slip rental customers the “Reel Deal” – which allows them to pay for slip rental and other services through term payments rather than a lump sum – and 82 percent have signed up for the program. Similarly, instead of requiring marina customers to make one big payment in the fall to reserve their slip for the next year, Castaway Marina has broken its schedule into four payments, which helps the marina keep cash flowing throughout the off-season.
Train, train, train: The leading companies in any industry know the importance of employee development, but when business is slow, it’s a particularly advantageous time to pursue training. Not only will you be better positioned to grab market share when things improve, you’ll also boost employee confidence and loyalty. Marina-specific training opportunities with organizations like the International Marina Institute should be considered, as well as courses offered by community colleges, trade associations and institutions like Dale Carnegie.
Give them what they want: It’s no surprise that one of the best ways to improve customer satisfaction and loyalty is to give them what they ask for. Of course, to do that, businesses need to regularly ask their customers how they can improve. Annual or quarterly written or e-mailed surveys are a popular option, as are comment boxes.
At Central Florida’s Mt. Dora Boating Center & Marina, marina customers were asking for more food and beverage options, so General Manager Joe Lewis recruited a sandwich shop to offer food and beverages at his location.
Maine’s Trident Yacht Basin said its decision to enter the state’s Clean Marina program was also customer driven.
“More and more we see customers looking for and making choices to do business with clean marinas,” said President Bill Morong, Jr. “We are really happy that our philosophy of doing what we can to protect our environment is shared by our customers.”