‘No boat for you!’Posted on Written by Reagan Haynes
Dave Nolan won’t sell a boat to just anybody. That might sound counterintuitive to most boat dealers — in fact, to most people in sales. But as the owner of Cape Yachts and South Wharf Yacht Yard, Nolan’s first priority is his promise that every customer will get superior service.
A lot of people in sales talk about this commitment — but accomplishing it by actually turning away customers? As someone who waitressed in fine restaurants all through college, I tried — unsuccessfully — to convince several chef-owners that attempts to please the chronically unhappy only detract from the dining experience of loyal customers. So Nolan’s declaration was just one of many pleasant surprises I found at Cape Yachts when I visited its facilities in South Dartmouth, Mass. — one of the company’s three locations.
“We’re focused on customers who care about and are willing to pay for exceptional service, not the ones who chase a deal based on price,” Nolan says. “Our business model costs money. If that customer is going to be relentless and suck all the energy out of our team, we don’t want them. The sales guys hate to hear it, but I tell them, ‘Don’t sell the boat. It’s not worth it.’ We have a finite amount of resources. It’s not just about cash and inventory; it’s about human beings. You’ve got to be willing to say no. When you make a promise to someone, no matter what it costs, you have to deliver. And if you compromise your business value, you’re resentful. You have to make sure the costs of delivering on your promises are in step.”
Clearly Nolan is keeping the customers that matter. He says the dealership and boatyard have surpassed pre-recession levels, with 2013 their strongest year ever. Even the cold and dismal January this year marked another best for the company, Nolan said in early February. The past few months have seen physical growth, as well. Cape Yachts opened a New York location at the Brewer Capri Marina in Port Washington and expanded at its Essex, Conn., location.
“It’s the combination of our company and Beneteau,” Nolan says. “What you experience is not the norm, and that’s one of our competitive edges. We’re just a lot more hospitality-driven and a lot more service-driven than a lot of yacht dealerships.”
The first thing you notice as you walk around the boatyard is that it’s spotless — to the point that you wonder whether actual work takes place there. But Nolan also says that if you ask anyone — a boat detailer, a rigger, a salesperson — what their role in the business is, “they’ll all tell you, ‘We’re in the service business.’ It’s kind of neat,” he says.
Nolan says it took years to establish that culture.
“When we started to do that years ago, it was transformational to our company. We quit looking at people as transactions and we began to look at it for what it is — a promise. Can you change my oil? Tune my boat? Yes. We’re making a promise that we’ll do it and we’ll do it by a certain day and time. That’s another unique thing it’s done for us. Being off-schedule almost went away entirely. You put that on top of a product and a company like Beneteau, and that’s why what you felt walking around was special.”
In the interest of full disclosure, my reason for visiting initially was not to profile Cape Yachts, it was to sea-trial the Oceanis 41. It was a first sailing experience for someone whose boating history had been limited to powerboating — a fact that Beneteau USA president Laurent Fabre found unacceptable. When Fabre learned that I had never sailed, he fired an email to Nolan on the spot. It took some time to organize the visit around the weather, but finally I was barreling down from Boston, looking forward to my first sail.
In more than a dozen years of covering the marine industry I’ve visited some amazing dealerships and boatyards. Each has its own style and personality. Cape Yachts and South Wharf still made an impression — the place was sparkling clean, everyone was courteous and happy and at no point did I feel rushed.
Whom you do business with
Nolan’s vision for Cape Yachts hadn’t yet taken shape when he bought the company in 1989.
“We used to try to be a company that was everything to everybody,” he says, recalling the first 10 years. “It was frustrating because we would have huge successes and huge failures. What we learned was that if we just chose to be excellent at three or four things and never, ever compromised on those things, we could be OK at the rest. And those three or four things are the things our particular customers care about.”
Nolan is quick to point out that this wasn’t something he discovered by himself. A Harvard Business School professor’s presentation on professional management introduced him to a concept that he brought back to his dealership. He tasked his team to list every single attribute that the yacht-buying customers cared about.
“I bet we came up with 30 on each side of that business, on the service and the sales side, if not more,” Nolan recalls. “We were trying to please everyone on all fronts. But we had to narrow it down to the top four. I literally locked my [people] in a room for a day. I’ll never forget it. We came up with this list. It was a lot more work than I anticipated. We couldn’t just get down to two items. But we came to four items that the customers we wanted to do business with cared about. That doesn’t mean we don’t make mistakes and occasionally don’t hit it, but it allows us to refocus all the time.”
All owners have to make those choices according to their own business, their own clientele and their own values, Nolan says. “In our instance, those things are execution, customer experience (which, he says, differs from customer service), knowledge and presentation.”
The company refocused yet again after the financial crisis in 2008, Nolan explains. “People around you show their true colors when the going gets challenging,” he says. “I could list off on my hands the companies that showed incredible integrity. We severed all relationships except for the ones that showed integrity. We represented a whole slew of brands when it happened.”
Now, he says, the company carefully chooses its partners.
“For example, post-recession partnerships we’ve chosen to take on include Yamaha, Volvo, Yanmar, Cummins, Mack Boring, Navico and Simrad, Raymarine, Garmin. We deeply expanded our relationship with Beneteau. All are companies that during the worst of times showed the strongest commitment, both in reinvestment and partnering through difficult decisions.”
Cape Yachts’ business plan kept it focused on the resources available and staying true to its mission. It became exclusively a Beneteau dealer. “That’s enough,” Nolan says. “Representing Beneteau on the power and sail side is like having five different boat lines. A lot of that decision, too, is our sales team. We have a lot invested in them. We want their mental capital extended in a specific way. Shops that bring on every single brand, for whatever reason, they’re diluting that mental capital.”
Nolan says his company was luckier than many were heading into the recession. “We were already on this focused track of being in the promise business and earning relationships. We already had a lean-practicing company. It was fortunate because you view waste differently.”
Beneteau, which is celebrating its 130th anniversary this year, has always involved dealers in product development, and the excitement at Cape Yachts makes it a valuable partner, Fabre says.
“The fact that they have 30 percent market share on sailboats in their area is living proof of their enthusiasm,” Fabre says. “Now they are even more excited because they had a very good year in the powerboat business. I feel there is the same dynamic. Not only are they good products and good-working products, they are a little bit different, so it makes them easy to sell. That’s what makes dealers really enthusiastic — when products are selling themselves. They don’t have to so much negotiate or justify.”
I have heard from several people who have no affiliation with Beneteau that getting a chance to sail aboard an Oceanis 41 as a first experience might have spoiled me a bit. The thing that stood out every bit as much as the lines of the boat and the comfort of the ride was that Eric Bratcher and Cliff Evans, who took me out on the Apponagansett Bay for my first sail, clearly were as passionate about Beneteau as their dealership is.
“The 41 Oceanis is the most popular model we have,” Bratcher said aboard the vessel. “Our sails are made like an airplane. That’s why we’re able to go right into the wind instead of it just pushing us where it wants. I love how these boats will just go straight into the wind. The most I can get out of my boat is a 45-degree angle.”
Nolan says he also appreciates Beneteau’s emphasis on family. His wife, Jane, runs the sales component of the business, and it’s important to both of them that the word “family” is listed in the group’s mission, among passion, innovation and delivering the highest quality for the price.
Beneteau also focuses on the customer experience in a way that sets it apart from others, Nolan says. “They are every bit about wanting more market share, but at the end of the day they are very supportive of their dealers and allowing us enough room to conduct business. So you don’t get one dealer selling into another dealer’s service area and territory because they don’t want to disappoint a customer.”
The next level
When you step onto the company’s property, you see that the surroundings are pristine, but at no point does a visitor feel out of place. One would never guess that when Nolan bought South Wharf in 2006 he spent months and a chunk of money cleaning what had been a hazardous-materials site.
Greg Coleman, the training steward, gave me an extensive tour. Like every other person I encountered — many of whom didn’t realize I was a reporter — he seemed to have genuine pride in his company. He says new buyers often will stay in the area for a couple of weeks at the marina so they can learn how to use their new boat.
“Usually people are moving up in electronics or learning joysticks,” Coleman says. “There’s a lot of cool stuff, so it’s a lot to take in. It’s like leaving the nest. If they can’t stay here, we’ll send our captains to them, not only for the handover, but for follow-up appointments until the buyers feel comfortable with their boat. [There was] one customer that thought he was ready and left and got himself into a tight spot. We sent a captain down for a reorientation.”
Isn’t that expensive? I ask Nolan later.
“It’s very expensive,” he says, “but it’s the right thing to do. You’re earning relationships and you’re making promises. It’s unique to each customer. We have customers that after turnover say, ‘OK, see you later.’ We have some who stay on the docks for weeks. If it’s a young couple or partners, we take them out separately so there’s a level of understanding what’s going on for each of them. If a couple’s coming up to a dock and only one person understands what’s going on, that’s where you get the yelling and the screaming. When they both understand, that’s where you get the calm.”
That mentality extends to the team, too. Cape Yachts actually has a learning lab within the yard, “a space set up solely to train our guys,” Nolan says. “There’s an enormous investment in it.”
Coleman makes sure opportunities are open to all employees, whether new technology is being rolled out or it’s engines or electronics or manufacturing. “It feels like things are changing every other week. It’s really important to be absolutely up-to-the-moment trained.”
That helps everyone be educated at delivery, which in turn puts buyers at ease. Coleman is visibly pleased when he explains how customers light up during the delivery of a boat. “During handover, we roll out a red carpet,” he says. “We have a cannon we fire off and we have champagne to break over the bow.”
Nolan says it’s the customers most resistant to the fanfare who wind up enjoying it the most. “Everybody likes being treated special. While perhaps some are a bit shy at first, they all enjoy the pomp and circumstance. It’s a day to be celebrated.”
Nolan credits former employees Richard Moore and Barrett Canfield for the ideas. “That’s why I’m telling you all of this. We all learn from each other and continue to push the customer experience to new levels — all good for our industry.”
This article originally appeared in the September 2014 issue.