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15 Years of Top 100

By Jonathan Sweet

When the Boating Industry Top 100 started in 2005, it was a major undertaking for both the magazine and the industry. Nobody had ever attempted to find and recognize the best dealers in the industry.

The goal of celebrating those top dealers was only part of the program. The most important goal of the Boating Industry Top 100 has been to raise the professionalism of the entire industry by sharing the best practices of the best dealers.

Through 14 years of data and best practices, we’ve learned a lot about the industry and shared that information with companies across North America. The program and its dealers have certainly changed over that time, weathering the Great Recession that put hundreds of dealers out of business, but still continued to grow.

(The 2019 Top 100 will be unveiled at the Boating Industry Elevate Summit and featured in the December issue of Boating Industry.)

Customer first

Since the beginning, the top-ranked companies in the Top 100 have emphasized delivering a great customer experience.

From the January 2006 issue, recognizing the 2005 Top 100:

The common bond, however, that joins the Top 100 dealers is that each and every one of them truly delivers on the dream that is boating. Perhaps Rob Youker of The Sportsman sums it up best: Customers don't buy boats, they buy a lifestyle.

Each of the Top 100 dealers understands that it needs to deliver on that lifestyle. The benefits of doing so are recognized in the bottom line, annual revenue increases and in returning customers and customer referrals.

MarineMax was the Dealer of the Year the first two years of the program before being inducted into the Top 100 Hall of Fame in 2007. While being recognized for its obvious size and breadth of services, it’s notable that the first characteristic called out for the company in 2005 was its promotion of the boating industry.

“MarineMax prides itself in delivering boating. Not boats. Boating. There’s a big difference. …The company’s slogan – Delivering the Boating Dream – proclaims it and serves as a constant reminder for the company’s employees, not to mention every single one of its customers.”

While the dealers that first year didn’t know what was waiting for them over the horizon, the best were preparing their businesses for a downturn in sales. Focusing on lifestyle was just one part of that.

An important characteristic running through many of the top dealers even in 2005 was a focus on income from sources other than boat sales. It’s worth noting that those dealers who were talking about the importance of business diversity and focusing on items like their service department are those that are still around today.

But Top 100 dealers know that the service department is much more than just an area within the facility that services boats. It represents the most direct link to the customer, an opportunity to interact with them and keep them happy.

More importantly to the Top 100 dealers, however, the service department creates a steady flow of revenue that, when it is operated efficiently and managed professionally, can put a good portion of that revenue directly toward the bottom line. It has proven, to be a saving grace when inclement weather adversely affects boat sales.

Even in that booming sales economy, many dealers that emphasized the service side of their business were reaping the benefits. That would become only more important in the future and it’s no coincidence that this group included future Top 10 dealers like Prince William Marine (2010 & 2011 Dealer of the Year), Port Harbor Marine and Action Water Sports.

Strength & Success

After a successful first year in 2005, the Top 100 reached even greater heights in 2006 and 2007. Like most awards programs, the first year results only inspired companies. Those that made the list wanted to improve their standings, those who missed the cut wanted to be part of the fraternity and those that hadn’t applied took notice. All told, there were 35 new companies in the 2006 list compared with the inaugural 2005 group.

The 2006 Top 100 had total revenue of $2.88 billion, up from $2.6 billion in 2005. In 2007, the group reached $3.25 billion – a mark that wouldn’t be topped until 2018. But beyond the numbers, the focus of the Top 100 stayed on consistent improvement – a measure that is still one of the most important parts of the Top 100 application today.

But the Top 100 is not a numbers game. The ranking itself is based much more on qualitative data than quantitative. It’s based on how professionally dealers run those storefronts and the processes and practices that deliver the boating lifestyle to the consumers who enter them. And it looks deeply into how well they develop those employees. It’s based on what they offer their customers – above and beyond the boat, engine and accessories — and in turn, what their customers think of them. It’s based on best practices and outstanding initiatives. And the strength of the list is found far more in these companies’ overall business operations than their top-line revenue or units sold.

So as the dealer body at large unites to improve itself, so, too, does the Boating Industry Top 100 Dealers program raise the bar of expectations for dealer excellence.

After MarineMax and it’s then-88 locations moved into the Hall of Fame in 2007, Galati Yacht Sales took over the top spot in the rankings.

The Florida-based dealer was recognized for its business acumen, marketing skills, and financial success, but especially its customer service.

“Take care of your customer and they will always take care of you.”

That’s the principle Anna Maria and Michael Galati, Sr. instilled in all of their children when they founded Galati Yacht Sales in 1970. It’s a simple formula for success. But the absolute commitment of the five Galati siblings to that concept makes the company the premier boat dealership in the country more than 36 years later, driving its growth and culture of continuous improvement.

Galati’s executive team is looking for any opportunity to improve its customers’ experience – and they know how important employees’ experience is to achieving this goal. In fact, it recently established an e-mail address specifically to allow employees to share ideas, best practices and concerns with management.

Even as the Top 100 looked stronger than ever, the industry was getting ready for a downturn that would end up being worse than almost anyone expected.

Decline & Recovery

The 2008 Top 100 showed that even the best dealers were not immune from the economic slowdown. The total revenue for the list dropped to $2.91 billion in 2008, but that was nothing compared to what was coming: $2.1 billion in 2009 and $1.56 billion in 2010. By the time the list bottomed out at $1.5 billion in 2011, total volume for the Top 100 and Hall of Fame was less than half of what it had been just four years earlier.

In retrospect, it’s amazing there was even a Top 100 to cover. Top 100 dealers were looking for help and answers as the global economy went into a tailspin.

Dealers talked about joining 20 Groups and attending the Marine Dealer Conference & Expo as they worked to find ways to stay afloat. Like many across the boating industry, Top 100 dealers were closing locations, laying off employees, cutting expenses or shutting their doors entirely.

The average Top 100 dealer cut their marketing spending in half. Inventory levels surged and dealers tried to find innovative ways to move that inventory. This did create opportunities for some dealers with ready cash to pick up units on the cheap as dealer inventory and repossessed boats flooded the market. They retrenched and focused on items like their service departments and storage revenue.

Sail & Ski (2009 Dealer of the Year) and Prince William Marine (2010/2011 Dealer of the Year) were both recognized for their ability to respond to the recession and position their companies to make it through. Both dealerships were examples of what a good management team, with a core of great employees, can accomplish even in a down market.

Sustained Growth

By 2012, there were finally signs of a recovery. That year’s Top 100 had a total revenue of $1.78 million, the first increase since 2007.

After being battered for several years, Top 100 dealers had plenty to celebrate in 2012 – a 28%  increase in boat sales, a 17% increase in service revenue and 58% growth in net profit. Those numbers would all continue to grow over the next several years.

Legendary Marine, the 2012 & 2013 Dealer of the Year, was an example of a company that had positioned itself well to come out of the recession and hit the ground running.

[Legendary Marine President Fred] Pace challenged his management team to build a business more suited to weathering a downturn. Like a lot of companies, they knew they had to change their model from an aggressive focus on sales to a more balanced approach.

“We always felt that we had a very good parts and service center,” Pace says. “But we realized we needed to capture a greater market share of those people that we sold boats to as well as going out there to capture customers that we hadn’t sold boats to and be their provider of service going forward.”

That involved a new way of thinking. They used direct mail, e-blasts and old-fashioned guerilla marketing to reach out to those customers, aggressively going after the business of dealerships that had scaled back or closed.

When things began to pick back up, the company had created a nucleus of parts and service that helped it make the peaks and the valleys of a typical off-season much less deep.

By 2014, total revenue for the Top 100 and Hall of Fame had once again topped $2 billion, reaching its highest level since 2008.

Gordy’s Lakefront Marine, the 2014 & 2015 Dealer of the Year, was another dealer who had weathered the downturn fairly well. It’s unique Cobalt Farms operation, a state-of-the art service and storage facility on 35 acres, helped the dealership stand out from the competition. Gordy’s also made a major investment in its Abbey Dockominiums, acquiring 163 slips in Lake Geneva’s only protected harbor during the recession and converting them into positive cash flow. Most importantly, the dealership focused on its “family” of customers, team members and the company.

“What really excites me about our success is the difference we’ve made in the experiences we’re giving these people, our customers, our team members,” [President] Tom G. Whowell said. “It’s exciting to see them enjoying themselves, having fun with their families.”

Every Monday morning, Gordy’s has a planning session with all service and sales employees to focus on customer needs. All employees know that customers and their families and friends are important and to treat everyone with excellent customer service no matter what size, year or type of boat they have, according to the company leadership team.

Top 100 revenue topped $3 billion in 2017 before reaching a record $3.57 billion in 2018.

The industry also saw a new wave of consolidation on the dealer front. In fact, more than a dozen Top 100 dealers have been acquired by other Top 100 dealers in just the last few years. One of the most aggressive has been OneWater Marine Holdings, formed from the merger of Hall of Famer Legendary Marine and Singleton Marine. The new company – which has continued its acquisitions – won Dealer of the Year honors in its own right in 2016 and 2017.

There may not have been a dealer more representative of the rapid growth of the industry over the last few years.

In an industry where most dealers have no exit strategy, OneWater saw an opening for a model that allows those dealer principals to exit on their schedule. The OneWater model is built on the idea that the principal can stay with the dealership if he or she wants to, continuing to work, but eliminating the risk and headaches of ownership.

In many cases, taking that responsibility off of the owners has reinvigorated them, helping them enjoy the business again.

“We take that burden off them, take all of the liability off of them, put a little cash in their pocket and they get to pick up the phone a year from now, three years from now, 15 years from now and say ‘I’m going to the islands, I’m done,’” [CEO Austin] Singleton said.

Sail & Ski, the 2009 Dealer of the Year, would return to win its second Dealer of the Year honor in 2018. Widely recognized as one of the best-run dealerships in North America for years, the company had been hampered by a lengthy drought in its Austin, Texas, market that had slowed the boating industry.

“Without a doubt, we are most proud of our continuing sales and profitability results in 2017,” [Founder & co-owner Rod] Malone said. “We accomplished the results not so much because of what we did in 2017 and 2016, but what we didn’t do over the past six years. When business was down we did not panic and we did not lay off our people, who are our most important asset.”

That helped The Sail & Ski Center to take advantage when the local market improved. The dealership grew revenue to a record high in fiscal year 2017.

Those records came because the management team at The Sail & Ski Center made sure the company was well positioned for the rebound.

“During that time, even though we could not see the light at the end of the tunnel, we knew there was one and we wanted to maintain our capabilities and retain our people so that we would be ready to respond to the turnaround when it came,” Malone said. “The strategic plan we developed to deal with such circumstances was pretty simple and it has worked for over 40 years: ‘If it fixes something or sells something keep it.’ As a result, when times are tough we reduce fixed overhead and fixed assets by applying the criteria above. We do not lay off personnel, our most important asset, who are the key to our ability to adapt to change that is the light at the end of the next tunnel.”

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