Integrated Dealer-Manufacturer Relationships

It’s going to take a stronger partnership to solve the problems we create for our consumers
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Manufacturers are racing to fill orders, with many extended out to mid-2022.   

Manufacturers are racing to fill orders, with many extended out to mid-2022.   

I’m a bit of a gadget nerd.

Against my father’s recommendation, I bought my first Mac computer while in college, and I have owned probably a half-dozen since. Today, I absolutely love how all of my integrated Apple products make my life feel better.

My iPhone connects seamlessly to the CarPlay touchscreen in my truck. My Apple Watch tells my MacBook Pro that it’s me and unlocks the screen. Earlier today, I went for a two-mile walk and listened to an Apple podcast through my Apple-owned Beats while I used my new iPhone app to control the smoker that’s cooking dinner back at my house. This connectedness was unfathomable a decade ago, but today, life would be strange without it.

Similar integration of systems in connected boats adds to the excitement of the boating lifestyle. These boats offer yet more features that will attract new customers, and add a layer of comfort and confidence by empowering boaters to monitor and control boat systems from afar. Ideally, these technologies create seamless experiences for the customer, and those experiences lead to greater satisfaction and a lifelong passion for boating.

However, I’d like to address an equally important type of integration, one that likewise greatly affects the service and enjoyment of boating. It’s the critical role that the dealer-manufacturer relationship plays in the customer experience.

Let me give you some examples of what I’m talking about.

I recently wrote a column for CDK Lightspeed’s quarterly newsletter that shared real-world and very scary data pulled directly from dealer management systems. It outlined that repair cycle time, or days in the shop, for new boats under warranty averages more than 70 days. And of late, I’ve heard from manufacturers and dealers about issues related to territories, warranty approvals and payments, as well as a broad spectrum of product, service and customer-experience quality issues.

While the pandemic no doubt inflamed these issues, current market conditions are exposing real and significant issues that our industry needs to address. Knowing that new-boat orders are already extending out to mid-2022, we’ll be facing these issues for some time to come, and there is no better time than now to begin addressing them.

Let’s take a closer look at repair cycle time. When we look at the service repair orders that required ordering out-of-stock parts, it has taken, on average, more than 50 days to fix the boat. How?

First, it took dealers an average of one full month from the time the boat was checked in until the part was ordered. Second, once those dealers ordered the parts, it took manufacturers and suppliers more than a week, on average, to get the product to the dealership. And third, after receiving the part, it then took dealers an average of almost 19 days to get the boat fixed and delivered back to the consumer.

If your blood isn’t boiling at the thought of all this seemingly unnecessary time, maybe you should put yourself in the flip-flops of the consumer who bought that boat in June and didn’t get it back until August, when summer was almost over.

But importantly, for a warranty-paid boat, it takes, on average, 19.5 additional days for the repair cycle. That’s more than 70 days on the hard. Why is that? These are brand-new boats. These are the customers who drive the economic engine of our industry. These boats, these customers, these repairs — they should be an urgent priority. But warranty repairs take far longer, nearly three weeks longer, than any customer-paid repairs, including those that are delayed because a part is out of stock.

What’s the difference with the warranty cycle that’s causing the additional delays? One could assume that the culprit is the back-and-forth negotiation and approval process between the dealer and manufacturer. And I’ve heard a number of concerns from both sides of the relationship about the other side’s performance.

While it may be easy for manufacturers to point a finger at dealers, and vice versa, this is not the time for us to come out of our corners fighting. This is the time for us to come together and recognize that it’s going to take a stronger partnership between manufacturers and dealers to solve the problems that we, ourselves, create for our consumers.

In today’s supercharged sales environment, boats 
are sold well before they’re unloaded at the dealership. 

In today’s supercharged sales environment, boats are sold well before they’re unloaded at the dealership. 

In a market environment that requires manufacturers to build product faster than ever, and dealers to sell boats as quickly as they’re unloaded from the truck, we know there are quality issues with the boats we are delivering to customers. We know there will be more warranty work. We also know that the quality of the ownership experience relies heavily on the quality of the service cycle. We are dropping the ball in all of these areas, and only a collaborative approach between dealers and manufacturers — one where the true focus is on improving the customer experience — can address the core of the problem.

The focus on the partnership’s role in the customer experience shouldn’t end there, however. There are lots of conversations to have: pricing, territories, purchase requirements, warranty programs, performance expectations and more. In short, the dealer-manufacturer agreements we use today are based on business environments of decades long ago. They’ve likely received occasional updates to meet new expectations, but the dealer-manufacturer relationship in the marine industry really hasn’t undergone a wholesale re-evaluation in a long while. I’d suggest that it has, perhaps, never been evaluated through the eyes of our consumers.

Yet just like customers today demand connectedness and integration in most facets of their lives, so too do those consumers reward companies and industries that streamline, refine and perfect the systems and processes that lead to outstanding experiences. Consumer preferences have shifted, and clearly, based on what we see highlighted in this publication, technology has adapted. It’s time for us to adapt too, to focus on and better integrate the relationships in our supply chain, to eliminate the obstacles that prevent us from recruiting and retaining more boaters.

Today’s technological boat integration conversation is important. But the conversation about the human factor — the business relationships and customer experience — will ultimately be the driving force behind success for our industry.

Let’s begin by admitting that we need to work together better, and let’s entertain a real, productive conversation on how we get there. 

Matt Gruhn is president of the Marine Retailers Association of the Americas.

This article was originally published in the May 2021 issue.

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