Do YOU have a club?

A week ago Thursday, I was running late for a seminar on unique profit centers at the International Marina & Boatyard Conference. When I slipped into my seat about 20 minutes into the 90-minute session, the presenters were talking about boat clubs, and while the discussion moved on to other topics as it wore on, it kept coming back to boat clubs. Not only did about a quarter of the audience of marina operators seem to have a boat club, most of the other three quarters wanted to learn their ins and outs.

While I was in Tampa at IMBC, Managing Editor Jon Mohr was back in the office, working on a boat club feature article for our March issue. There’s no doubt that this is a growing trend, one of the bright spots in the midst of the downturn. But what I’ve also come to believe is that dealerships with marinas are particularly well suited to take advantage of this opportunity.

One speaker commented, for example, that he can’t imagine running a boat club without a service department. Though boat club members tend to take care of the boats relatively well, given the amount of usage they get, they are inevitably going to need maintenance and repairs. And to meet the boat club’s obligations to its members, that service work needs to be turned around fast. 

That same speaker was asked how frequently he replaces the boats available to club members. This marina operator, who purchased his fleet of Sea Rays from a local dealer, admitted that he wasn’t going to be able to afford to replace the three-year-old vessels any time soon. A dealer, however, has an advantage when it comes to obtaining vessels for the boat club. He can use the boat club to help him manage both his new and pre-owned inventory. And he is well set-up to sell those boats he wants to replace for a profit. The boat club is not only a potential profit center of its own, it also can serve as an inventory management tool.

Finally, there is the prime benefit of boat clubs: they help potential boat owners become more comfortable with boating and keep former boat owners from exiting the industry all together.  I’ve heard some boat dealers complain about boat clubs as if they’re competition for boat sales, but I don’t buy it. If they lose a sale to a boat club, it’s the exception, not the rule. Boat clubs are a great lead management tool to help steer interested but inexperienced prospects toward boat ownership and to continue to generate some revenue from those who might otherwise leave boating altogether.

As Jon Mohr concludes in his forthcoming article, if you’ve dismissed the boat club concept in the past, now is the time to reconsider it. To learn more about how to make one work for your company, see Boating Industry’s March issue.

5 comments

  1. Great topic Liz. The boat club of yesterday, with sub-par equipment in marginal at best working order, is over. I see this segment of the industry evolving into a concierge service for those who want "soap to nuts" amenities, high quality equipment and a set of features to fulfill their lifestyle choices (e.g. fishing, wakeboarding, cruising, sailing, etc). There are a number of examples of where this segment is going.

    Ultimate Boats Club does a pretty good job of presenting the ownership vs club membership value proposition: http://www.ultimateboatclub.com/yachtclub.html

  2. Hello Liz-

    Great article. I started a premium level boat club in Boston, called The Navigator Club, in February of 2008. The idea behind our club, was to provide our members with premium boats, exceptional service and first-rate facilities. As a former yacht broker, I concur that the vast majority of boat club members are not boat buyers. Most are novices, who are "looking to dip their toes in" and see if boating is something they want to pursue or they are former boat owners who sold their boat due to time constraints.

    I can tell you that heading into our third season, our business model is a success and judging by our renewal rate of greater than 80%, our members would agree also.

    Regards,

    Capt. Ed Mancini
    The Navigator Club, Inc.
    wwww.thenavigatorclub.com
    617.880.2525

  3. We have operated the Bartlett Lake Boat Club for the past 8 years. We love it!! It has generated over $300,000.00 per year in monthly dues and sign up fees. In addition each outting brings in an additional $50.00 from fuel sales and other store items. We beleive that this is new revenue that we would not normally receive. We are a full service marina and the club fits in perfect with our other profit centers. Anyone interested in the club concept please contact me at 480-221-0503 or at http://www.bartlettlake.com. Also we have developed a complete online management system.

  4. We were at this conference as well and concur with your article. We have a Freedom Boat Club franchise at our location. They keep fifteen (15) boats in slips during the summer and bring close to thirty (30) boats from their other close-by locations to our facility for winter storage.

    They have grown their fleet each year which is a welcome source of reoccurring revenue for us. In addition, they buy tens of thousands of dollars worth of fuel from us, use our haul out facility, buy parts from us, and will occasionally use our service department (though they have their own staff for most service work).

    I recommend Freedom Boat Club to any marina or anyone thinking of getting into boating!

  5. Enrique B. Lara, Sr.

    Hello Liz,

    Reading your article, the replament of boats available for club members part caught my eye and intrest.
    I'm planning to invest in a Boat Club (50%-equity). In a negotiation meeting with the owner, he made the following comment: "we have a total of 18 boats with a wrap a round bank loan, and we are planning to sell the boats, get rid of the bank note, and instead of owning the boats available to club members, we will start leasing the boats instead of buying new ones in 2012.
    This will leave the wear and tear to the lessor, plus the club can have the latest boat models for its members.
    Do you have any comments on this strategy?

    Respectfully,

    Enrique B. Lara
    2000 NW 92 Ave
    Doral, FL 33172
    enriqueb.lara@gmail.com
    (305) 206-9449

    PS: Looking forward to that March 2011 issue!

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