Data reveal that were not hooking enough boatersPosted on Written by Bill Sisson
Its funny what you can find when you look closely at numbers.
We all know the big numbers. For instance, after being essentially flat for more than a dozen years, boat registrations dipped in 2010 by 2.2 percent, or about 282,000 boats, the largest decline in 15 years. But participation the same year was up substantially, from about 65 million adults to 75 million.
What can we learn by digging a little deeper? I asked Info-Link managing director Jack Ellis some time back whether there was a way to determine how many boat owners were actually leaving the sport each year, the so-called defection rate. Ellis and his colleagues drilled down into the numbers from 2010, and their findings are worth examining.
Ellis analysis found that roughly 825,000 of the people who either sold their boat or let their boat registration lapse in 2010 had not returned to the fold as of April 2012. The numbers alone wont tell you why they left, but any way you parse it thats a lot of boaters falling out the skinny end of the funnel.
This is not to say they left boating altogether, Ellis said in an email describing the results. Some may buy another boat in the future, others will pull their boats out of the garage at some point and re-register them and others may still be in boating, but are perhaps using friends boats or rentals.
Its also possible that 2010 was a tougher year for boater retention than others, Ellis says. Still, no matter how you cut it, we are losing thousands of people every year, even if its not forever, he says. (For context, about 1.12 million new and used boats were sold in 2010, with the vast majority, about 929,900, being used boats.)
From the glass-is-half-full perspective, Ellis points to the 10 million-plus people who chose to stay with boating. The good news is were working hard to increase participation, Ellis says. However, he acknowledges, This nonetheless presents quite a challenge. We either have to find 825,000 boat buyers and lapsed boat registrants to replace them each year or figure out a way to keep more of these people in the sport. Ideally, we can do both attract new boaters and entice them to stay.
The other good news is that the industry is addressing long-term growth and the challenges to it through a number of initiatives that emerged from the Growth Summit and a subsequent workshop.
Given one of the basic but important tenants of marketing that its easier to keep a customer than to find a new one Ellis looked even closer at the 2010 numbers to see whether there were any significant changes in the defection rate, based on the type of boat owned. There were some interesting observations, but nothing alarming, he says. For instance, people who sold a runabout were less likely to stay in the sport than someone who sold a PWC, which on the surface might seem counterintuitive until you realize that a large number of PWC owners also own another boat, according to Ellis.
The Miami-based market research and analytics firm also found differences in retention based on the age and size of the boat and where it was located, but no smoking gun at least not until they looked at the correlation between one-time boat owners and those who had owned multiple boats in the past.
Based on the 2010 figures, the researchers found that people who had owned more than one boat are more than twice as likely to remain in boating as first-time boat owners. In 2010, about 70 percent of one-boat owners left the sport after selling their boat, Ellis reports. Thats a flashing red light.
The defection rate decreases to about 50 percent for two-boat owners, 32 percent for three-boat owners. By the time someone has purchased their fifth boat, the hook is set, Ellis continues. We pretty much have to kill them to get them out. We appear to be doing a relatively good job of attracting new boaters, but more often than not they become disenchanted and leave after the honeymoon is over.
Ellis might next do a bit more digging to determine just how long the people who left the sport in 2010 owned their one boat. Was it 12 years or two months?
Back to the glass-is half-full viewpoint: There is an opportunity here to plug the funnel at the narrow end. Maybe we need to better understand why this is happening, Ellis says. We can all speculate about the causes, but if we can determine what the barriers truly are, perhaps there are some things we can do to reduce or eliminate some of them. If we can increase first-time boat buyer retention by only 10 percent, it translates to thousands of people per year who will stay with the sport.
Look for more on this topic in my blog and future columns.
This article originally appeared in the June 2012 issue.