My beliefs about the economy are complicated. We just came out of the Strictly Sail Pacific sailboat show -- the largest all-sail show on the West Coast -- and the feedback from exhibitors across the board was refreshingly positive!
Crowds were out and buying boats, accessories, gear and services -- maybe not setting all-time industry records, but hey, deals were made and cash was transacted. One major boat manufacturer reported it was the best show he’d seen there in four years. This was really exceptional news and very encouraging for the sailing industry.
Some recent powerboat shows, likewise, have reported favorable results.
I’m absolutely thrilled to hear we are seeing an uptick in sales. I so want to be riding on the happy turnaround bandwagon, I really do. So why am I not spinning cartwheels and leading an all-industry cheer?
Anybody who follows my marketing column in Trade Only magazine knows the proverbial glass is always half full; I am an optimist. However, the past 18 months has tempered my natural-born cheery optimism. My psyche has shifted, and I’ve become more pragmatic.
So here’s my dilemma about the economy and its impact on our biz.
I’ve got this niggling little doubt about whether we have really turned the corner, or if we’ve just experienced a short-term microburst of pent-up demand. Is what we’ve seen recently sustainable? Or have our most loyal and few remaining creditworthy customers finally emerged to grab up the fast and easy deals?
I was speaking with Joe Lewis of Mount Dora (Fla.) Boating Center & Marina, a Top 100-ranked dealer and one of the smartest operators in the biz. He’s been at it a long time and is very much a “hands-on manager.” He’s successfully moved his old inventory to all the bottom feeders (my description, not his) that were scooping up great deals.
But now he’s hit a brick wall -- qualified buyers are still poking around, he says, but they no longer want to buy the available 2010 new product at new-product pricing. And, he tells me, many other dealers are in the same boat.
His question to me: “Will they buy or bail?” Good question. BIG question.
By aggressively purging the dated inventory in the pipeline, have we in essence, created a new profit-sucking monster? Is this “new deal mentality” our new nemesis?
My latest marketing column in the upcoming May issue of Trade Only is on financial guru Suze Orman. Well, one of the most compelling things she told me is that she doesn’t see a turnaround or recovery in the U.S. until 2014 or 2015. She cautioned us to be careful.
She said it will look like we’re moving out of recession, but we won’t be quite yet. She predicts it will continue to be difficult for small business owners and consumers alike to get loans, and all the major bucks will go to big business.
So while I really want to be totally gung-ho about the recent flurry of sales activity, her counsel haunts me. Last I looked, it’s still 2010; 2014 and ’15 are a long way away.
When I asked Suze what she thought it would take to get the affluent to buy our products and services in today’s market, she said we have to offer the “deal of a lifetime.” She believes it is better to sell something now and hope to make it up in the future when things turn around.
And that throws me headfirst into a 360-degree exorcist-force spin right back to Lewis’ initial concern. If we don’t mimic the crazy discounting of the past 18 months, will our new product prospects buy . . . or bail?
I try to think like the customer. Hasn’t your mindset about buying big ticket items -- shoot, any discretionary item -- changed drastically? In my family, we don’t buy anything on impulse anymore, and the only way I’d even consider anything major is if it were a “deal of a lifetime,” and even then, I’m not sure we would buy. Nearly all of my upper crust, middle class friends, family and professional colleagues have adopted this same brutal budgeting mindset. So why would our average boating customer think differently?
Do you think we’ve turned the corner?
Do you think we’re experiencing a short-term sales burst, or are recent show results the early indicator of better days ahead?
Do you believe our new reality and future will be built upon skinny profit margins?
Do you think our current customers seeking the deal of a lifetime now will buy . . . or bail?
I know. It’s complicated.
Wanda Kenton Smith is president of Kenton Smith Marketing and president of Marine Marketers of America. She has handled boat show marketing and public relations for more than a decade, including this year's Strictly Sail Pacific.