Boat clubs rose in popularity during the recession when many other areas of the marine industry struggled, and they continue to thrive as we enter a potential growth period. However, they remain a bit of a mystery to the industry at large. Aren’t these clubs taking business away from dealerships?
Not necessarily. Boat clubs have been perceived as a threat to boat sales in the past, but getting boaters on the water doesn’t have to be a fight.
“There’s plenty of business to go around and I think if we’re all working together and referring business to one another … collaborating instead of competing, we’re going to get more people out on the water, which in turn is going to generate more business for all of us,” said John Giglio, CEO of Freedom Boat Club.
In almost every case, the customer who joins a boat club is not the same customer who chooses to buy a boat. They are either new boaters who are not ready to make the commitment to own a boat or are older boaters who are ready to get out of ownership but don’t want to give up the lifestyle.
For those new boaters, the club informs the customer about boating and the different vessels available without an immediate investment.
“If they can get on the water as a boat club member years before they would have pulled the trigger buying a boat, that helps the industry,” said Giglio. “It makes a more educated consumer.”
Boat clubs in dealerships
A number of dealerships have seen this is true and haven chosen to open their own boat clubs to get as many people on the water as possible through their businesses.
“There are people who are not ready to buy a boat right now … but then they gradually get hooked on the boating lifestyle and they become a potential boat buyer,” said Jan Rood, director of the FunShare Boat Club at Seattle Boat Company.. “We’re fulfilling a need out there and depending on where you are in your boating life, [a club] could be the right fit for you.”
Rood says ownership is a hefty time and monetary commitment. That level of commitment isn’t always appealing to families, particularly those with children who are involved in numerous activities. The boat club allows them to get on the water on their own terms.
Contrary to the typical perception, boat clubs often provide strong prospects for boat sales rather than stealing customers from a dealership. Rood said that if Seattle Boat Company didn’t run a boat club in its dealership, the FunShare members wouldn’t have purchased a boat instead – they would have taken their business to a club elsewhere.
“That’s 120 names we wouldn’t otherwise have,” said Rood, “because they may not have approached us to buy a boat but they may be more interested as they get more locked into boating.
Rob Soucy, president of Port Harbor Marine, has seen memberships at the Port Harbor Marine Boat Club turn into tangible boat sales down the road over the club’s six-year history.
“It has led to more people buying boats than people saying ‘I’m not going to buy a boat, I’m going to join the boat club,’” said Soucy. “Boating is a great sport. It’s a great family activity and you get caught up in it, especially with the boat club at first … you make it easy for people and they love it.”
Soucy has a number of stories about customers who wanted to buy a boat but had no idea what they specifically wanted. The boat club allows those customers to experience a large variety of vessels and spend the summer learning what they want to do on the water.
“A lot of times [customers] envision themselves boating a certain way but in reality, they boat a completely way. To get out of that boat [ownership] is not financially easy,” said Soucy. “This is a very easy way of [helping them decide].”
One best practice these dealers have in common is offering an avenue to purchasing a boat. If a club member decides they are ready to convert to ownership, the dealer-based boat clubs allow members to use their membership fee as a credit towards a boat at the dealership.
“We use the club to try to create a path to ownership,” said Rod Malone, president of The Sail and Ski Center, which runs the Turn Key Boat Club. “Not all people find, once they’re in a club, that it suits their needs in terms of flexibility. … There are limitations club haves that some people don’t enjoy.”
Another advantage for dealers who operate boat clubs is a fleet of used inventory. Boats often stay in boat clubs for about two or three years before being “retired,” and dealerships can add those boats to used boat sales, driving additional revenue for the business.
Through pathways to buying a new boat and creating a fleet of used inventory, operating a boat club becomes a two-fold profit center for dealerships.
Like any aspect of a marine business, the boat club has to be given constant attention either by an existing staff or by a staff dedicated to its service. Some dealerships have marina staff who also work on the club, while others hire a small team to cater to club members. No matter the approach, club members are the same as any other customer and need just as much care.
“You have to be committed to [the club],” said Soucy. “If you think … you’re going to just put this out there and it’s going to be successful, you’re going to be sadly mistaken.”
Malone suggests that boat clubs not operated by dealerships should align themselves with one that can act as a partner. Boat clubs can work with dealerships on inventory and maintenance, and dealers can be a reference point for clubs that have members who are ready to become owners.
“Make [boat club operation] advantageous to both parties,” said Malone.
FBC works hard to cultivate relationships with local dealers and if a member of the club decides to buy a boat, FBC will refer them to dealers who sell the brands used in the club.
“People are going to use the boats that they’re comfortable operating,” said Giglio.
Building better boaters
Boating comprises a small, tight-knit community of dealers, manufacturers, suppliers and more, and businesses may need to rely on one another for a multitude of reasons. It's imperative that everyone in the industry – boat clubs included – is working together.
“The key in any business, but specifically in the boating world, is make sure that you’re playing well with others in the sandbox,” said Giglio.
The marketing is the real sticking point that divides boat clubs and dealerships and it is the main contributor to boat clubs' poor reputation. Boat clubs should be very careful about what message they are sending to the rest of the industry with their marketing tactics.
“The message is anti boat ownership – some of them covertly, some of them overtly,” said Malone. “[Boat clubs] need to propose themselves as an alternate entry into the boating lifestyle … they have some convenience features they need to promote but they don’t need to advertise ‘You’re crazy to own a boat.’”
“The focus needs to be what the benefits are to a boat club opposed to what the negative are to boat ownership,” said Giglio, who noted that FBC changed its messaging in 2007 to reflect this focus. “We’re building the boat owners of tomorrow.”
Rood adds that boat clubs build better boaters who may not have otherwise had the opportunity to experience life on the water.
“Many of our members would not start out boating if it took the entire commitment [or] responsibility of owning a boat,” said Rood. “However, once boating ‘gets in their blood’ so to speak, they are hooked and many eventually want the flexibility that comes with ownership.”