Some advise patience, while others are skeptical of how the redirected dollars will reach them
Boat dealers have mixed reactions to the announcement that the bulk of the funds collected for Grow Boating will be given back to manufacturers to pass along to the dealers. Some express skepticism this will actually happen, and others say dealers need to be patient as boatbuilders figure out how to best distribute the money.
In October, the National Marine Manufacturers Association said it was temporarily redirecting Grow Boating assessments because the money collected would not be enough to mount an effective national campaign.
It was agreed that 85 percent of what’s collected from engine assessments will be given back to manufacturers to pass along to dealers, and the other 15 percent will support public relations, the Discover Boating Web site, Marine Industry Dealership Certification and other core programs.
The change began with assessments incurred on or after Oct. 1 and will continue through June 30.
Industry leaders expect about $6.5 million to be redistributed back to manufacturers and then to dealers, and about $1 million will remain for the Grow Boating budget.
“There becomes a threshold that the efficiency that you gain on a national basis really starts not to pay off,” explains Carl Blackwell, vice president of marketing and communications for Grow Boating Inc. and the NMMA.
Blackwell likens the redistribution to a “stimulus package” for dealers.
“The $6.5 million spread out through all the companies and all the dealers may not be a lot on an individual basis, but I wouldn’t be surprised if it doesn’t stimulate more investment in [sales building] tactics by those companies,” he says.
‘Nobody asked us’
Some dealers, however, are not convinced that’s how it will work.
“We all agreed as dealers and manufacturers and the NMMA that money was supposed to be spent for the Grow Boating campaign, and we’ve paid into it all these years, and all of the sudden a bunch of guys get together and redirect it and (decide) not to use it for what it was meant to be for,” says Jim Thorpe of Spring Brook Marina in Illinois.
“Nobody asked any of the dealers what their opinion was,” he says. “I think it’s the most ridiculous thing.”
Jason Padgett, of Modern Marine in Tennessee, was unaware of the change when contacted by Soundings Trade Only. He says he hadn’t been notified by his manufacturers.
“We’re fully expecting this upcoming year to be a tough year, and so we’ve backed off as far as orders for the ’09 year,” says Padgett, who sells Cobalt and Chapparal boats.
“It won’t be too much money,” he says. “But every little bit helps.”
It’s like ‘earmarks’
A Midwestern dealer, speaking on the condition of anonymity, called the plan “ludicrous” and says he also hadn’t heard anything from his manufacturers on how they plan to disperse the funds.
“In my opinion, it simply needs to be dropped and monies not collected, or it needs to be channeled [differently], not company by company,” he says. “That’s like earmarks.”
Thorpe, who also hasn’t heard anything from his manufacturers, noted that dealers already get rebates, and he envisioned a situation where a dealer might say the Grow Boating money is included in part of the rebate they already receive.
“It took so long to get the Grow Boating campaign going, and we all know it’s tough times, but in tough times that’s when you need to advertise,” says Thorpe, who sells Carver, Marquis and Cruisers boats. “It would be like me saying I’m not going to go to the next year of NMMA boat shows. Well, then what’s that going to do to my business?”
Phil Keeter, president of the Marine Retailers Association of America, says he understands the concern, but feels the “new direction has plenty of safeguards in it for dealers.”
Manufacturers received a pledge card they must sign and return to the NMMA in order to receive any of the redirected Grow Boating assessment credits. They must agree to apply 100 percent of the money toward creating marketing and promotional efforts that assist dealers in moving product, assist dealers in converting prospects into buyers, and fully report to dealers on how the credits are being spent.
It’s up to the boatbuilders, however, to decide how to spend the money. They can put it toward boat-show expenses for dealers, promotional events such as demo days, give credit vouchers to pass along to customers, or other efforts.
Any manufacturer that does not live up to its pledge will risk its NMMA membership, Keeter says.
The need is now
Larry Russo, Sr., of Massachusetts-based Russo Marine, says it’s too soon for manufacturers to have hammered out details of how they plan to redistribute the funds, and dealers should be patient.
Russo is a Sea Ray and Boston Whaler dealer who is chairman of the dealership certification program and was involved in the decision-making process to redirect the funds. He agrees with the decision to redirect funds, saying the industry needs boat buyers now, not two years from now.
“We need buyers today, not next year and the year after, and all of our marketing messages were geared toward non-boaters in non-boating venues, non-boating publications, attracting and trying to persuade new participants into the recreation of boating,” he said.
He urged dealers to be patient with their manufacturers and give them time to decide how the funds will be dispersed. Russo also urged the retail community to be vigilant about knowing how much money they are entitled to receive from their manufacturers.
“I honestly believe most manufacturers will institute a rather traditional approach to the distribution of funds,” he says. For example, dealers could get more in the way of boat show co-op funds — perhaps 100 percent instead of a 50-50 split.
One of Russo’s manufacturers, Boston Whaler, recently introduced a new series of boats and wants dealers to buy new in-store and boat show displays that cost hundreds of dollars. The company, Russo says, is allowing the assessment funds to offset the cost.
“Those are the kinds of things that need to happen everywhere,” he says.
It’s only temporary
Industry officials insist this is not the end of Grow Boating, but rather a temporary shift in the program to help offset the current economic climate. The NMMA board plans to readdress the issue at the American Boating Congress next May, and will determine whether the redirected assessments should be extended beyond June 30, 2009.
Grow Boating has been successful, they say, with the Discover Boating Web site getting 3.5 million visitors annually; 171,000 people requesting the “Get Started in Boating” DVD; and nearly 10 percent of those people purchasing a boat. NMMA says the campaign also has increased boating participation.
This change in direction will likely put the program “in neutral for a year,” says Blackwell, stressing that about $1 million will still be spent on marketing.
“This program is not suspended,” he says. “The budget is really being redirected. There are a lot of activities going on.”
Emphasis on PR
In a letter to the industry, NMMA president Thom Dammrich stressed that Grow Boating is more than just a 30-second commercial. The ads are important, he says, but other efforts are equally important.
“We won’t be advertising in 2009, but we will be spreading the message of the positive benefits of the boating lifestyle nationally through our PR efforts, interactive marketing and DiscoverBoating.com, and will continue to support and grow product certification, dealership certification and our focus on improving water access,” he says.
“And while we continue our work to get more Americans interested in boating,” Dammrich adds, “there will be more dollars available to manufacturers to help their dealers sell boats now.”
This article originally appeared in the December 2008 issue.