Boat sales 101Posted on Written by Reagan Haynes
Read. And not just Internet blurbs — read books, periodicals, newspapers, business journals, read about marine industry icons, read about companies that have nothing to do with boats — just read.
In the diverse lineup of topics and speakers at a Norman-Spencer Marine Retail University in Brockton, Mass., in late January, only one theme was touched during each presentation, and that was to urge all 125 attendees to read and learn everything possible, within and outside their industry, so they can achieve new goals.
Liz Walz, training and education director for the Marine Retailers Association of the Americas, announced the launch of an MRAA book club at the event with a slide captioned “Read a book” because, as she says, “A simple idea can deliver big results.”
Walz cited no fewer than five books during her “Leading the Pack” presentation on effective training at marine dealerships, including “One Word That Will Change Your Life,” by Dan Britton, Jimmy Page and Jon Gordon, and “Good to Great: Why Some Companies Make the Leap … And Others Don’t,” by Jim Collins.
The regional MRU sessions are co-produced by the MRAA and Dominion Marine Media. They’re designed to home in on regional trends for dealers and provide a general industry overview throughout the year — both as updates to the Marine Dealer Conference & Expo and for those who can’t attend the Florida event, which takes place each fall.
The information-rich MRU in Massachusetts featured an industry outlook from Walz and her leadership presentation; a session from GE Capital highlighting the popularity of saltwater fish and ski boats around the country and in the Northeast; a presentation by Lighthouse Media Solutions illustrating how to navigate social media and, in particular, online reviews; service and tech manager training education by John Adey, president of the American Boat & Yacht Council; a presentation by member Larry Russo on the 50th anniversary of the Massachusetts Marine Trades Association; a Grow Boating and Discover Boating update by MRAA certification and benefits director Sonja Moseley; a presentation on generation driving strategy by Dominion Enterprises’ Shane Pierce; and the session that garnered the most audience participation and questioning: the regulatory wrangling with Jamy Buchanan Madeja, legal counsel for the MMTA.
Knowing your stuff
Lighthouse Media Solutions COO David Jensen recommended that dealers keep themselves up to date on current events when they participate in social media posting, citing gaffes that brought scads of bad publicity to high-profile companies. “Be aware of the world around you,” Jensen says.
To make his point, he cited an infamous Entenmann’s Twitter gaffe in which the pastry giant tweeted, “Who’s #notguilty about eating all the tasty treats they want?!” The problem with the hashtag was that it coincided with the highly contentious not-guilty verdict handed to Casey Anthony, who was on trial for the death of her child. “I don’t think they intentionally made a point about that case, but that was a situation where they weren’t paying attention to what was going on in the world around them, and it came back to haunt them,” Jensen says.
A good way to counter social ignorance is to read newspapers, business journals and other periodicals — those that align with your political beliefs as well as those that do not, although Jensen advises dealers to never become political online. “You can’t just walk out and give your opinion about the political environment today because you’re potentially isolating 50 percent of your potential customer base,” he says.
Jensen cited a tweet from Chrysler’s branded Twitter feed that read: “I find it ironic that Detroit is known as the #motorcity and yet no one here knows how to f***ing drive.” (The original post used the actual word.) “That was taken down in 31 minutes,” Jensen says. “The person who posted it was fired 45 minutes after that.”
Jensen asked how many audience members listen to public radio or read in-depth news reports. When few raised their hands, he said, “Make sure you’re taking in what’s going on around you to avoid making a mistake like that. It might not be something you bring up at the bar during happy hour, but it’s something you should do.”
Don’t be embarrassed
The topic of reading and keeping informed also surfaced in a presentation on delivering excellent service through qualified service techs delivered by the ABYC’s Adey. “Read,” he urged attendees. “Read Harvard Business Review, the Wall Street Journal, listen to National Public Radio, read Bloomberg Business. The point of that is not to change who you are and how you do business. Whatever your style is, we don’t want you to change that, but there are people who have similar styles to you, and you can learn from them.”
Like Walz, Adey stressed the importance of training in the service realm. “I was talking with Soundings editor Bill Sisson, and the whole Go Boating and Grow Boating campaign, and that’s all well and good, but we know if people are boating, the boat’s going to break. We need to have qualified people taking care of those boats,” Adey says, so people don’t become discouraged and move to another recreational activity.
“There are a lot of different management styles out there, so what we want to bring into this portion of the program is training,” Adey says. “It’s one thing to let loose a young tech coupled with an older tech. It’s another thing to invest a couple of dollars in him. This is not an ABYC sales pitch. When it comes to training, please find something that fits, that fills a need in your shop.”
Adey mentioned training from the National Marine Electronics Association, Evinrude, Mercury, Yanmar and Cummins, as well as Dometic and Mastervolt classes around the country regarding product installation.
So much training has moved online that Adey emphasizes the need for hands-on experience before sending service techs into the field. “My worst fear about online training is there will be some dude in a cave who’s never seen a boat, but he’s going to get ABYC training,” he says. “We can only do so much. Hold a session. Make it during winter, like every Tuesday morning, and go do some kind of activity with somebody who knows what they’re doing. It doesn’t have to be much — a half hour, 45 minutes. Get some doughnuts and coffee. Guys like that.”
Instead of upselling customers, point to a book of ABYC standards when you explain to customers what their boats need, Adey says. “Find something that gives third-party validation that tells the customer what to do and shows you’re not just you making stuff up so you can make more money,” he says. “There’s absolutely no reason we shouldn’t make 40 percent off the service department like you do on sales. You should also start thinking of it as a marketing tool.”
Madeja gave tips about whom to talk to about changing regulations and inspections. When regulators visit, it’s “most important to make sure people who work at your yard know whether to let them in or tell them, ‘Let me get you coffee. Please make yourself comfortable while I go get the authorized personnel.’ Do not ever let a regulator walk around unaccompanied by someone who is trained to walk around with a regulator.”
Pierce recommends that marine dealers read something else — a website called www.glassdoor.com — to see what employees and ex-employees are writing about your management and company. It will help business leaders understand what they might be doing wrong and what might be compromising consumer loyalty. “If you make it easier for customers to stay, it’s harder for them to go,” Pierce says. “You have to reduce or eliminate sources of dissatisfaction.”
Knowing what employees think about you and your company can provide insight about customer satisfaction because it takes happy employees to create the right atmosphere for customers, he says. “Focus on customers’ changing needs. Boomers, bless our hearts, we’ve carried it for a long time. There are 80 million of us, but now we’re seeing millennials enter the work force, and there are 75 million of them — way, way more than the Gen-Xers.
Saltwater fishing hot
GE Capital business solutions manager Charlie Brooks gave the group a preview of buying trends that were to be presented at the Miami International Boat Show, as well as a snapshot of regional trends.
The Northeast mirrors the nation overall in regard to boat segments leading the industry’s recovery, with growth seen in pontoons, aluminum boats and, most notably, saltwater fishing boats. On a 12-month rolling basis through November, sales of saltwater fishing boats 25 feet and larger grew 27.55 percent nationally, 25.39 percent in the Northeast and 33.58 percent in Massachusetts, Brooks says.
“Keep in mind, when you’re talking to your reps, you’re competing with the rest of the country for that inventory,” he says. “One of the things we keep an eye on is the potential for inventory shortages. Saltwater fishing boats are such a big part of the market up here. That stuff is just flying through the channel, and there really is no inventory left out there to speak of, which really puts pressure on saltwater fish manufacturers.”
Brooks emphasized the growth in that segment because it is a higher-dollar sector than some of the other areas that are showing strong growth after the Great Recession.
Aging inventory continues to be at historical lows, Brooks says, with about 14 percent of inventory making it to a year. Fewer than 6 percent of new boats stay on showroom floors for 18 months. Larger sterndrive and express cruisers carry a “bit more aging than average” in the Northeast, compared with the overall market.
Inventory turns have improved from 1.8 percent in 2010 to 2.09 percent in 2013, Brooks says. Earnings before interest, taxes, depreciation and amortization — a measure of cash flow — has increased from 2.97 percent to 5.97 percent in that time period. “A lot of the damage to balance sheets from the downturn has been repaired,” he says.
50 years of MMTA
The Massachusetts marine industry was born 60 years ago in a building that no longer exists — Mechanic’s Hall on Huntington Avenue in Boston, where the Prudential Center now stands. Recreational boating was beginning to gain popularity after World War II and the pioneer salesmen wanted to bring more boats to the marketplace. So they partnered with the New England Sportsmen’s and Boat Show, convening show boats in the basement of the hall for the first time in 1954.
Recreational boating matured quickly in Massachusetts, where commercial fishing and boats had long been part of the area’s history. The small boat dealers decided they could have their own space, and they rented the Commonwealth Armory in Boston in 1957.
Enter Frank J. Farrell, an ad salesman at the Herald Traveler who sold print space to boat salesmen. “Frank Farrell was instrumental back in the 1950s in starting the first boat show,” says Larry Russo, owner of Russo Marine, who spoke to commemorate the 50th anniversary of the Massachusetts Marine Trades Association during the Marine Retail University conference in Brockton.
Farrell helped spearhead the formation of the MMTA in 1964 for these reasons, Russo told the group: “To promote boating, to combat adverse legislation, to be involved in the Boston Boat Show being contemplated for the new auditorium at the Prudential Center in 1967.”
Half a century later, the MMTA is financially sound and thriving. Today’s New England Boat Show, in its 59th year, runs from Feb. 22 to March 2 at the new Boston Convention and Exposition Center. The show was purchased by the National Marine Manufacturers Association in 2009 but has retained its influence from the MMTA. It continues to gain traction as one of the premier boat shows in the Northeast.
This article originally appeared in the March 2014 issue.