After a record-breaking boat show in January 2008 in which it sold more than 80 boats, it would have been easy for Buckeye Marine to dismiss the U.S. economic turmoil as someone else’s problem.
Instead, the one-location Canadian dealership began preparing for the worst — and it was the right decision. Located in Bobcaygeon, Ontario, an area that relies heavily on automotive production plants, Buckeye saw many of its customers lose their jobs through the downturn. So the company turned inward, empowering employees by getting them involved in cost-saving solutions such as applying for government wage subsidies, cutting back on materials like paper and shop supplies, and reducing utilities. Employees also engaged in cross training to help streamline processes and fill in for one another during reduced hours.
The company took advantage of a 0-percent financing program in order to stock its fleet with three energy efficient vehicles. And it changed its wholesale financing source to get a more aggressive rate.
“We have made a deal with the bank to double our credit-line for a six-month period, so we can pay off the floor plan after the free floor plan period ends at a greatly reduced rate,” explain owners Gary and Chris Poole. “Not only does this save the company a lot of money it reduces our dependence on one lender and we don’t have to pay curtailments.”
Buckeye began ordering moderately equipped inventory that could have specialized parts added in-house to avoid reordering a boat to suit a customer that didn’t want certain options. And it purchased distressed and repossessed boats and parts from dealerships going into receivership. In addition, it increased its sharing of new and pre-owned boat inventory with other Ontario boat dealers who carry the same brands.
“This allowed us to enter into the 2009 model year with well-priced inventory that soon-to-be recession price shoppers would be looking for,” the brothers state. “This also allowed us to make more margin as much of this product was bought at a greatly reduced rate and at a par dollar. This put us in a very favorable price point position for buyers while still remaining profitable.”
Buckeye began advertising its products using Kijiji, eBay, Craigslist, and other free, boat specific sites. The dealership increased its photo galleries on all online inventories, and it launched a featured “boat of the week” online and on its sales lot. In fact, it reorganized its sales lot to position price point boats with large payment signs prominently on its lot. Along with this came the addition of Buckeye Credit Care.
“This gives us the advantage of offering our financing customers 12 months, free of charge, to return their boat in case of job loss, major illness and other major life changing encounters,” the brothers explain. “It has also proven to be a great way to convince buyers to finance through Buckeye rather than with a line of credit or cash as the product is only available on product financed through Buckeye.”
Between the closure of local competition, the launch of special promotional programs and the hiring of a technician and a warranty writer, Buckeye was also able to its increase service department revenue by more than 6 percent last year and grow its storage base by 10 percent.
At the end of 2008, Buckeye implemented a new marketing plan aimed at driving sales from existing customers, including a promotion in which it asked to buy their used boats, a complete update of its database in an effort to collect customer e-mails, and the use of direct mail and e-mail campaigns. The dealership also developed a customer focus group, which met for the first time earlier this year, and hired a professional succession planner last year.
“We recognize the importance of having a solid plan in place to protect our customers, employees and vendors and set up guidelines for the family to help the business succeed long into the future,” the Poole’s say.
The proactive mindset this dealership brings to its business is nothing new. But it has been an essential tool for the company as it navigates the recession. In the end, 2008 was a tough year for Buckeye Marine due to its aggressive efforts to prepare for the worst in early 2008. However, the company saw a revenue decline in only one area of its business, and despite the 22-percent drop in boat sales, Buckeye Marine’s bottom line – and upbeat spirit — was barely affected.