Boat Sales Up, Customer Satisfaction Down

Technology can help fill gaps, but customer care requires manpower that dealers often lack
Author:
Publish date:
Followup after the sale is especially important with customers who are new to boating.

Followup after the sale is especially important with customers who are new to boating.

For years, the marine industry has lamented the downward trajectory of first-time boat buyers — that is, until the Covid-19 pandemic brought the first uptick in more than a decade.

But drawing new boaters and keeping them in boating are two different things. As boat sales have climbed, customer satisfaction index readings have declined, almost at an inverse rate, says Matt Gruhn, president of the Marine Retailers Association of the Americas.

“Boat sales are all at record levels. This won’t last forever,” Gruhn says. “We’ve got to do what we can to keep these boaters in boating. We’ve got to make sure their experience is memorable, not only to be able to generate repeat business, but also referral business. That’s what’s going to help us grow boating.”

Dealers are seeing families buy boats as they seek ways to safely spend time together during 
the pandemic. 

Dealers are seeing families buy boats as they seek ways to safely spend time together during the pandemic. 

Dealers’ Dilemma

Even before the unexpected boat-buying frenzy, the attrition rate among first-time buyers was high: Within five years, 42 percent sell their first boat and opt not to replace it, according to a Discovery Boating survey. That drop-off rate creates a challenge for dealers, many of whom were already facing staff shortages before the surge in new-boat demand. The short-staffed dealers now need to give new entrants attention to make sure there’s a positive experience. Shortages of boats and parts, driven by demand and manufacturing shutdowns, are further complicating the dynamic and delaying service by several weeks.

“All of a sudden we have this pretty significant bump [with] this influx of first-time boat buyers,” says Jack Ellis, managing director at Info-Link Technologies, a Florida firm that tracks new- and used-boat registrations and statistics. “Now, what do we do to keep them? Obviously it’s important to get new blood into boating, but we’ve got to watch this number or it could be a higher rate of attrition.”

3Boat_Buyer_Attrition

Groups including MRAA are trying to leverage technology to make it easier for dealers to take care of customers and ensure that they have a good time in their boats. The good news is that dealers can access online resources and software management tools for this purpose, Gruhn says. “But they also have to take the initiative,” he says. “The first step is a phone call. Technology can help you see what needs to be followed up on, or help you personalize the experience. It’s what customers require today — personalization. But man, the follow-up is the key.”

Boat-Buying Frenzy

Between 2010 and 2018, the percentage of first-time buyers of new and used boats steadily declined form 37 percent to 31 percent, leveling off there for a couple of years. When the pandemic struck, that percentage spiked for the first time in more than a decade to 34 percent, Ellis says.

And that was before dealers started seeing 300 percent and 400 percent jumps in some cases, Gruhn says. “In most cases, boat dealers were understaffed going into all of this stuff, and when Covid hit … there were historical concerns out there,” he says. “When we have an economic downturn, historically boat dealers are typically the first ones to feel the pain and the last ones to emerge.”

The initial uncertainty prompted many dealers to act conservatively, so they were even less prepared for the boat-buying frenzy that followed, Gruhn says. “The floodgates opened, and everybody wanted a boat,” he says. “I’ve literally got dealers telling me, ‘I’ve got people wanting to buy a boat who have never even been in a boat.’ That’s a huge deal, because those are the folks that aren’t going to know how to do things like get the boat back on the trailer. That’s the kind of thing we’re dealing with.”

Dealers have been swamped as people, who are stir crazy from staying isolated look for ways to get on the water.

Dealers have been swamped as people, who are stir crazy from staying isolated look for ways to get on the water.

According to preliminary sales data, nearly every segment was up at least 35 percent in June versus the same time in 2019, Ellis says, but several value categories far exceeded that rate. For example, jetboats were up around 65 percent; runabouts, a segment that’s “been in free fall for years,” was up over 50 percent, Ellis says.“That tells me that younger families … are buying boats to tow the kids around and spend time together on the water,” he says.

Inverse Proportions

Customer experience has been a victim of the unprecedented demand, the “dark side to this story,” Gruhn says. Customer Service Intelligence Inc., an MRAA partner that charts customer satisfaction indices on sales, delivery and service for 30 to 50 dealers, showed that CSI has declined more than 6 percentage points since April, Gruhn says, adding that in a normal peak season, that drop is closer to 0.5 to 1 percent.

A significant drag on satisfaction was lack of follow-up from the dealership after purchase, an area that earned a rating of 77.17 percent, versus 83.1 in the second quarter of 2019. “This is something that’s been on our radar,” says Trent TerHaar, national marketing director with The Boat House, a dealership with seven locations across Florida, Illinois and Wisconsin. “We’re still feeling our way through this.”

Industry advocates say it’s critical to keep new boaters engaged in activities they enjoy so they will continue boating.

Industry advocates say it’s critical to keep new boaters engaged in activities they enjoy so they will continue boating.

The Boat House is making a big internal push to determine how customers are doing, having added a full-time staff member who does nothing but follow up with Florida-location customers, TerHaar says. “We rolled it out as a beta test, and it’s been huge with customers,” TerHaar says. “We learned the hard way. We expected the sales guy’s job was to follow up with the customer, and they just don’t. And especially now, all of a sudden there’s another customer in front of them; you really can’t put it on the sales guy to do that. We came to a point where we needed to have a dedicated process or person to have those touch points after.”

The MRAA has long advocated for dealers to hire full-time customer experience managers, to follow up with buyers and make sure they have the tools necessary for a fun, safe experience on the water. The association released best practices called “Operation: Keep Your Customers Boating,” a package that includes blogs, a white paper, videos and webinars. Some of the resources are job descriptions and best hiring practices for those customer experience managers.

The influx of new customers, as well as repeat buyers, makes now a more critical time than ever to follow up, says Liz Keener, MRAA certification manager.

Outsourcing Followup

Several dealers say that even with all of the resources available, business was too brisk to find time to hire and train a customer experience manager this summer. Others worried the addition wouldn’t fit into their budgets, says Bob McCann, the MRAA’s lead certification consultant.

5CSI-drop

So MRAA worked on a way to outsource that role for roughly $1,700 a year (assuming 100 boats were sold), and is in the process of contracting with a third party that has industry and CSI experience, McCann says. The third party will follow up to ask clients to rate their dealer experience. The data will be measured and broken down so dealerships can see areas in which they excel, and those that need work. And the dealership will get a report to assess issues that continuously arise, as well as areas of continued success.

“What’s cool about the MRAA virtual business development center is, our partner’s doing all the heavy lifting,” so the results are quicker than they might be with a new hire, Keener says.

The Boat House’s northern stores lack the staff to track customer satisfaction after a sale, so the company is considering adding MRAA’s outsourced program.

The Boat House’s northern stores lack the staff to track customer satisfaction after a sale, so the company is considering adding MRAA’s outsourced program.

The MRAA’s virtual business development center is particularly appealing for dealers like The Boat House, TerHaar says. Despite the company’s push to add training and how-to videos for newer boaters, first-time boaters typically don’t know what to ask for and require more guidance.

“We don’t want to be a transactional business; we want to be a relationship business,” TerHaar says. “It’s much more work to follow that customer through, but hopefully in three or four years he will want to upgrade. But that’s an investment, and it takes a lot of effort. You’ve got to treat all these customers like gold.” 

This article was originally published in the September 2020 issue.

Related