Boating Industry Intelligence You Can Profit From
It’s not often that big companies are described as nimble. But that may be the best way to encompass the grace and speed with which Galati Yacht Sales has navigated the numerous obstacles the marine market downturn has placed in its path over the past year. It shouldn’t surprise anyone that this Anna Maria, Fla.-based, eight-location boat dealership defies the stereotypes. After all, its fleet feet are just one of the many ways the industry leader stands out.
When the downturn first hit Florida in 2007, Galati responded immediately, putting in place an expense reduction plan and lowering margin expectations. But it quickly became apparent that 2008 would demand further action. In response, Galati implemented a string of innovative measures that has put the company in a position to prosper during a time when many of its competitors are struggling. Not only did the company make the tough decisions necessary to reduce its operating expenses by 34 percent between June 2008 and June 2009, but it also introduced a number of programs to expand its revenue opportunities.
The company’s success was due in part to a restructuring in which key management roles were absorbed by Galati’s senior management team. Tampa Bay General Manager Darren Plymale assumed the duties of the events coordinator position and began sharing the Cruisers and Marquis Yachts brand manager roles with Principal Joe Galati. Principal and Customer Support Team Leader Michael Galati assumed the duties of Anna Maria Service Manager, and Principal Carmine Galati assumed the duties of Viking Yachts Brand Manager. Changes like these immersed Galati’s principals in the critical day-to-day management decisions.
“Through our intimate involvement on a daily basis with everything that goes on in our business, we actively sourced ways to improve our expense structure and determined new ways to market and improve our revenue base to avoid as many cutbacks in our workforce as possible,” says Carmine Galati.
One of the most significant challenges marine dealerships have encountered in the downturn is the spike in inventory levels, compounded by a retail and wholesale credit crisis. Galati met this challenge head on, launching an Inventory Reduction Plan last fall that resulted in a 66-percent drop in new and pre-owned inventory in less than 10 months. Among the components of this plan were an increase in marketing efforts – including online campaigns, direct mail, phone campaigns and Open Houses – and an aggressive sales incentive program for its sales and management teams. While other dealerships were haphazardly chopping their marketing budgets, Galati was using a laser focus to identify and direct its marketing dollars toward those channels that would deliver the best outcome.
Its online efforts – the results of which Carmine Galati describes as “phenomenal” – consisted of enhanced and featured vessel listings on industry Web sites, as well as an increased Web presence on 18 sites throughout Europe, Asia and Australia. In addition, the company participated in more than 20 boat shows, including the Miami International Boat Show, where it expanded its display to encompass an entire pier.
Perhaps even more ground-breaking was the company’s Bank Owned Program, through which Galati Yacht Sales marketed and sold lenders’ distressed yacht inventory. This not only created increased commission opportunities for the company, but it also provided Galati’s service department with the reconditioning work required to get the inventory in top condition.
Other key factors in Galati’s success are the programs it continues to support, despite the pressure of economic conditions, such as its EPIRB Films, Coastal Marina Management and Baldwin Connelly Galati Marine Solutions initiatives, as well as the dozens of customer rendezvous, fishing tournaments and other customer events it either produces or participates in.
As Galati founders Anna Maria and Michael Galati Sr. were known to tell their kids, “If you take care of your customers, they will always take care of you.” Clearly, the Galati Yacht Sales’ team still takes this to heart almost 40 years later. Not only has the company’s CSI score improved to 96.75 percent, but the dealership also continues to expand the customer services it provides, from its new video series on boat maintenance to the “Teens at the Helm” program it introduced last year.
“It is vital to our business plan to provide our customers with the best possible experience regardless of the economic challenges that we are confronted with,” says Carmine Galati.
It’s clear that Galati Yacht Sales is executing on this business plan, perhaps even more effectively after adjusting to the downturn. The now leaner and more agile dealership continues to not only aim high, but also set an example for its peers in the industry.