Q&A with S2 Yachts president and CEO Tom Slikkers - Trade Only Today

Q&A with S2 Yachts president and CEO Tom Slikkers

Learning about boatbuilding from a father who was on the leading edge of fiberglass was a great advantage, says Tom Slikkers, president and CEO of S2 Yachts, which builds Tiaras and Pursuits.
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Slikkers says the Tiara Q44, introduced last fall, is the type of multifunction adventure boat today’s consumer is demanding.

Slikkers says the Tiara Q44, introduced last fall, is the type of multifunction adventure boat today’s consumer is demanding.

Learning about boatbuilding from a father who was on the leading edge of fiberglass was a great advantage, says Tom Slikkers, president and CEO of S2 Yachts, which builds Tiaras and Pursuits.

Slikkers relies on customer interviews to home in on what people want in a boat. It’s an increasing challenge during an age in which a customer wants a boat to do all things. Ask 20 people, and you’ll get 20 answers.

We asked Slikkers how Pursuit and Tiara are hitting the right notes with consumers, and how that is informed by coming from an experienced line of boatbuilders.

Q: What was it like growing up with your dad being a boatbuilder? Did that give you a unique perspective?

A: My introduction to the boat business was at a time when my dad had just successfully made the transition from building wooden boats to building fiberglass boats. He started messing around with fiberglass in 1958. By the time I was born in 1961, he had a fiberglass product that he was selling. I have no understanding of being in business as a wood boatbuilder. Both of my older brothers do, and certainly my dad does because he spent a fair amount of time building wooden boats for Chris-Craft. When I came along, he was building fiberglass. Fiberglass was in its infancy. My dad was a pioneer, so what I was witnessing as a child going through the factory was kind of a newfangled thing. We were beginning a new chapter.

Q: Did your dad face any skepticism about making the move to fiberglass?

A: My dad was one of the very first— one of the company name brands that successfully made the transition from wood to fiberglass. Many held out because they felt fiberglass was going to be a fad — things like, boats have been built out of wood since Noah, and nothing’s going to change that. Statements like that. It’s hard to comprehend the risk my father took by working with fiberglass. But he saw a medium that was clearly an advantage to the boating industry. He just saw it earlier than most. He was willing to risk going in that direction when the rules of fiberglass [hadn ’t been laid out] — what you could and couldn’t do, how you used it, the different variants and strains of fiberglass materials and composites, epoxies, resins, all that stuff. There’s reams of documentation today — back in those days there were no textbooks or manuals on any of that, or even on how to build a mold.

Q: How did seeing him taking that risk influence you as a boatbuilder? Did that cause you to take risks also?

A: I don’t think I recognized the value of that early in my life. I do today. It certainly does cause me to think about where we are today — not so much about the materials boats are made of, but about green propulsion, future propulsion, what’s going to be the electric hybrid in a boat version for the segment of people who want that. There’s tons of that stuff that’s being experimented with. So I’m curious, but I’m also at a point where our business is different than it was back when my father started. It was pretty risky back then. Today, there’s an expectation because of the size and footprint of our company that we’re naturally going to be experimenting in some of those ways, which we are. We’re always looking for avenues to innovate and bring new value back to our customers. But we’re also conscious of the need to be on the leading edge rather than on the bleeding edge. There is a distinct difference for our company today.

Q: I have heard you say that you think S2 is very dialed in to what customers want — more so today than ever. How does that translate into your boats?

A: We live in a day and age where we’re surveyed to death. Every time you do something, every time you experience something from a company, you’re bombarded with surveys. Data’s important, but in our industry there’s a certain amount of data you can glean out of people. What I resonate with is having conversations with the customer leading into, “Tell me how you use your boat.” It’s not a simple five-minute conversation; I want to sit down on the back of the boat and actually talk about what this really means.

I’ve always enjoyed talking with customers who own our products and customers who don’t own, and I’m always curiously piqued by how customers use their product. You’d like to put them in these various buckets that make sense to us as manufacturers, but that’s very hard to do. In my experience it’s impossible because people are so unique in how they use the product. Family styles, expectations, time allotted are so different today. What one family thinks is good, quality family time, another thinks is not nearly enough, so they choose to do something else. It takes a lot of questions and exploration. For me, it takes a lot of probing. I never can get enough of that.

In addition to all of that organic material, we also have a robust and disciplined product-development process.

Besides boating, Slikkers engages in fly-fishing, golfing, snow skiing and biking. He grew up in Holland, Mich., where S2 is based.

Besides boating, Slikkers engages in fly-fishing, golfing, snow skiing and biking. He grew up in Holland, Mich., where S2 is based.

Q: It’s a totally different end result than a survey, I’d think, because you can ask follow-up questions, and in my line of work I find those follow-ups are where I glean my most useful responses.

A: Yes, and as much as I’m interested in that product, I think that’s a unique attribute of our company — a lot of people here are all equally interested in that, as well. It’s not just an accumulation of data, but we filter and vet and then come up with a boat. We spend a ton of money at boat shows and customer events and dealer events, and we attend those events not only because we need and want to, but also because it allows us to talk to these folks and get a glimpse at what makes them tick.

I was just at the New England Boat Show, talking with a Pursuit customer who had an older model from 1991. He was almost acting ashamed of this, and I was like, ‘Dude, I’m so happy you’re still in our family.’ He was probably in his mid-40s, and he was there with his dad. So I asked him to tell me what he did with our boat.

You could’ve pushed me over with a feather. He’s describing taking this 25-foot boat with a tiny cabin out to fish with his dad. And he tells me it takes us an hour to get there, but quite often, once we get there, we get weathered in, the wind picks up and we can’t make it back the same day. So we drop anchor and sleep in the cabin overnight. And I just couldn’t believe it. Most people today, they wouldn’t even begin to think of doing that with a 25-footer. They would say they have to have a 31, and a marina, and would need to be plugged in dockside. But here’s a guy 45 years old that loves the water. He likes to fish with his dad, and if they have to, they spend the night on the anchor.

I just find that so intriguing in an age when people want more amenities. That’s why that guy’s in a Pursuit. It’s that hardcore user that I love. And here’s a guy that’s in a product that’s long been gone out of our portfolio, but he’s still using it. So I’m picking his brain, wondering, what is it about that specific boat that serves his needs? That’s so cool to me.

We’re constantly using those stories and examples to overlay this data and make the intentional attributes of our product more value-based. One of the guys working for us, he tells us, this can’t be a race to the number of drink holders — they’ve got seven and I’ve got eight. That’s what I see in a lot of our competition, and when you do that you miss the point of asking what does that accomplish for the customer? Does it marry their experience with what we desire out of that experience? That’s kind of that magic, and it’s a dicey balance because there’s such a wide variety of use and expectation. You have to somehow pick a sweet spot. We do it that way as opposed to being just data-driven.

Q: You’ve talked about reaching new markets. What new markets are you reaching? Are they younger at all?

A: I think the perception today is that Pursuit and Tiara appeal to a wider group of folks than before. If you ask, are we getting the job done of driving the demographic age down, I’d say, I don’t think we’ve got that nailed down yet. I’d say the group that we are appealing to today is a wider range of folks.

But I don’t believe that anybody I can think of has successfully figured out how to drive that demographic down to the point that we’re having a major impact on the average age of the people that are buying and using our product. There are some companies that are already naturally younger, like the towboat industry. But if you look at industry stats, we still haven’t done a good job of figuring out how to migrate that age group down and get them earlier.

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Q: Do you think the industry can find ways to reach those younger Gen Xers and millennials? We hear so much about how differently they consume, and how they are all pressed for time and money.

A: I think the truth is that Gen X and millennials view ownership and properties and things differently than we do. I’m at the tail end of the baby-boomer generation. After that, the view of how people desire to own, operate and use things is different. I don’t know how we’re going to change that. The key is, how do we adapt to that? They don’t have the same propensity to own things. They buy experiences. They don’t buy products; they’re looking for things that help them get the experience they want. They don’t necessarily look at owning stuff as being critical to the experience.

I think that’s changing the way this group of individuals interacts with a lot of markets. The same thing is happening in large cities. As the age of young professionals begins to come into play, you’re finding many don’t own a vehicle. It’s not on their list. It causes us, because of what we do, to pause and say, how are we going to keep a big enough group of people that are legitimately interested enough to want to keep doing this? And I’m not saying this as one company, I’m saying this as an industry.

You refer to access and time and money. Those are the things this younger group will look at and say, oof. They’re used to sending text messages when they want to talk to someone, FaceTiming when they want to see someone, calling Uber when they want a car instead of waiting for a taxi. What we’re asking them to do over here is at the opposite end of the spectrum of what they view as normal.

We’re asking them to make a significant financial investment, and this age today is carrying a lot of debt with college education and realizing they’ve got to have a place to live and they might not be able to buy a home, and yet we’re sitting here saying, well, how do we get this group interested in boating? There’s a lot in front of that group before we get to boating.

I don’t have a good answer to that, and I know it’s a concern for the industry. I would say I’m a little less worried about it than some of my contemporaries in other businesses, though it still does cause me to pause because we’re at a more mature end of the segment and we’re at a more luxurious end of discretionary spending. I know we cater to a different group automatically because of who we are and what we do, but that doesn’t give us an exclusive right to say that group will always be there. That’s a long answer to your question.

Q: It seems people are really drawn to versatility in boats these days. How do you design around that need? The center console segment is doing really well. Is there something about that segment that lends itself to that versatility?

A: I think the center console segment is certainly doing very well. The big center consoles you talk about are doing particularly well right now. I think it’s a little early to declare that an overwhelming success as a segment. The center console has been a staple in the outboard segment for some time. The fact that there are larger outboards that can provide proper propulsion for these larger boats in a center console format is unique, but it speaks to the fact that people want larger day boats, more opportunity to do a lot of different things.

We’re seeing the advent of what we’ve long talked about and seen in the auto industry, where almost every vehicle seems to be part SUV today. It’s got an element of functionality and multipurpose orchestrated into the design, and it’s in almost every vehicle. I think we’re seeing that in boats because people are needing options and needing the versatility to do a wide variety of things because they’re only going to have one boat. The days of multi-boat owners is, I think, coming to an end. I think people are saying, if I’m going to boat, I’m going to boat in one boat, and I want it to do the widest range of activities the way that I script it.

I circle back to why we have those conversations. You can get everybody hung up into this phrase called day boating, and that creates a bucket. But therein, the explanation of what day boating means to 20 customers is 20 different things. You’ve got everything from stand-up paddleboarding to snorkeling to beaching to restauranting to cruising canals.

People want to have that flexibility built into what they’re doing. Imagine trying to design around that. The flexibility of what we’re trying to create almost gets overwhelming. To be able to do that and do it well is a challenge our team has embraced, and it is showing itself in the innovation and products we deliver. We just delivered a new 40-foot center console Pursuit (the S 408 Sport) that was unveiled at the Miami boat show. We introduced a brand new 29-foot (DC 295) dual console at Miami. We’ve got a very successful run on dual consoles, and I think dual console and center console are kind of the tip of the iceberg for that utility piece, or that SUV piece. And our company successfully introduced the Q44 on the Tiara side last fall. Again, you look at that product, and that’s exactly what it caters to — that multipurpose platform. It will do all you want it to do. I think that’s one of these things that because we do listen to our customers, I think we’re getting it.

Q: The first time I got to experience the joystick technology and virtual anchor was at the helm of a Tiara 3600 Open. It was the first time I had ever maneuvered a boat that size, and I was amazed at how easy it was. Does technology like that help make larger boats more accessible to more people?

A: I think for our company, what we’re viewing as technology helps us reach a broader footprint or community of customers, but I don’t necessarily view the Tiara, where we’re using the joystick or the flat-screen, I don’t view that as attracting a new boater who isn’t familiar with boating. It’s a new customer for us because they view us as being a leader in that area, and they want to have that premium experience. They’re new to us, but I don’t feel we’re getting customers who are new to boating.

On our Coupe series that has been more recently developed — the 50 Coupe, the 39, the 44 and the 44Q — those products come standard with the joystick, the IPS, pod drive, and they come standard with a Garmin glass cockpit that has been integrated into that. If you were going to purchase an upscale premium car — an Audi, a Mercedes or a BMW — you would expect that the GPS wouldn’t be an option, for example. You would expect some kind of multi-use interface screen that would encompass your smartphone, GPS, Pandora, Bluetooth and access to your musical library, and a bunch of other things, right?

So that’s a natural expectation when you walk into that arena. We view our glass cockpit and technology, and how we incorporate that, in that same vein. We try to limit options so when a customer goes in they can see what we’ve prepared isn’t a canvas that has hardly been painted, and they get to complete it. We’re trying to give them a complete package they can take right from the dealer, and they’re good to go. We feel that is better done, orchestrated and installed in the construction rather than an add-on at some other juncture.

The S 408 Sport is the largest Pursuit ever built. It melds day-boating accouterments with fishing features.

The S 408 Sport is the largest Pursuit ever built. It melds day-boating accouterments with fishing features.

Q: Have consumers changed post-recession? If so, how?

A: I definitely think consumers have changed, and lifestyles have changed. You can’t be in the world today and not live with change. Everything is changing, and it changes often. Consumers have changed, and their expectations have changed. Some of that’s influenced by the technology around us that continues to change at an extremely rapid rate. It’s having a huge impact on us. The auto industry is changing platforms every three to five years. They’re building hundreds of thousands of units.

On a micro scale, our industry is much smaller than that, and yet customers’ expectations are that we should be able to change this, or why haven’t you updated this? It’s three years old. It puts a tremendous amount of amount of pressure on us. I don’t see change slowing down. I see the behaviors in some cases almost being a little divergent because we have a group of young people who are seemingly embracing change way faster than the rest of the population, so that creates tension in the marketplaces.

Q: How does your dealer network look these days?

A: It looks similar to what it looked like back in the days when things were going fairly steady. Probably the biggest influence we deal with is, distribution points took a hit. If you look at the grand distribution for the entire industry, there was a loss of about 30 percent … and there has not been a replacement for those. There was not the same degree of loss on the OEM side. So there are fewer dealers on the map and there’s more brands inside each one of those points.

We haven’t necessarily lost or gained dealerships; we’re roughly in the same position, but there is more competitive product or brands inside the dealership today. And that puts more pressure on our sales and marketing department because there’s not more staff, there’s not more resources, there’s not more marketing dollars at the dealer level. We probably spend as much time trying to figure out how to promote our brands to the public through the digital, print and social media, but we spend an equal amount of time inside the dealership, trying to help them create a succinct message that is consistent with what we’re doing, and that’s hard work.

Q: Yeah, and then you add in the builders coming from Europe and Australia and other places.

A: Exactly. We’re the only place in the world that right now I’ll say is consuming boats. The rest of the world is barely even wiggling the Richter scale. The only place where there is really any viable consumption of product is the United States, but we’re still doing business in Latin America.

This article originally appeared in the April 2016 issue.

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