Nearly 20 years ago, when I first walked into the trade side of the marine industry, one of the first and most memorable conversations I had was with a supplier who opined that boat dealers were some “20 years behind auto dealers and 10 years behind RV dealers.”
This theory — that boat dealers somehow lack the sophistication, professionalism or some other intangible quality that’s present in other industries — has been repeated to me several times over the years. I don’t care for it, I don’t necessarily believe it, and I’ve pretty much made it my career ambition to prove the theory wrong. Or to fix whatever perceived deficit there may be, if in fact there’s any truth to it.
The RV and marine industries are, without a doubt, linked. As recreational, enthusiast-based industries, the major unit retail locations seem to parallel one another in gross margins, net profits and most of the other major benchmarking numbers offered by companies such as Spader Business Management, which tracks dealer performance in both industries.
During the past decade or so, you could identify the industries’ similarities by the impacts of the Great Recession, the climbing interest expenses of the late 2010s, and the significant growth in just the past year. So while unit sales and perhaps how each industry’s dealers arrive at those margins may differ, the underlying fundamentals, and the ups and downs of their businesses, remain quite similar.
If we think a little broader, from an industrywide perspective, RV and marine businesses face the same challenges: workforce, supply chain, advocacy, access and retention. There’s no greater example of these parallels than today’s business environment.
Both industries have been struggling to find the staff for basic needs such as servicing major units. Both have had to deal with supply-chain issues during the pandemic and related factory shutdowns. The industries have both advocated for greater access to the outdoors, and have championed the creation and maintenance of access points such as boat ramps and campgrounds. And today, both industries are fighting to retain a flood of new customers who turned to RVs and boats to escape the pandemic’s shelter-at-home orders.
So the business fundamentals are the same, and the industry issues are the same. What about the customer experience?
As a consumer who has purchased two boats and two RVs during the past 15 years or so, I can tell you the experience in both industries is dismal. From a big-picture perspective, both industries seem to lack a true understanding of how to deliver a world-class customer experience. And it wouldn’t be far-fetched to suggest that part of my career ambition would be to fix this issue, as well.
You see, four dealerships and four purchases later, not one salesperson, service representative or dealership principal has reached out to follow up with me. When we bought our first RV, we had no idea what we were doing. We had all kinds of problems, some embarrassingly simple but significant in their own right. The new-owner experience was challenging, and we had no ally to guide us.
As with camping, I grew up on boats and spent many weekends boating, fishing and skiing. But as a first-time boat owner, there are many unknowns and unexpected challenges. Any industry insider reading this article understands the challenges that come with boat ownership. But where are the consumer allies? Why don’t they exist? Why isn’t helping these consumers a critical initiative in our industry?
The parallel paths of the boating and RV industries has welcomed thousands and thousands of first-time owners during the past year. And we are at risk of losing many of them specifically because of a lackluster customer experience.
In the marine industry monthly customer satisfaction index captured by Customer Service Intelligence, scores continued to drop throughout the fourth quarter of 2020, bottoming out at 87.97 in December. These scores were hurt significantly by consumers who scored dealers poorly for the condition of the boat when they purchased it (80 percent) and the lack of follow-up from the salesperson (79.32 percent). Want proof that the RV and marine industries parallel one another in the customer experience? The RV industry’s fourth quarter CSI score was 88.89, and its condition of the vehicle and follow-up scores were 79.83 and 72.21, respectively.
A sub-90 CSI score is just not acceptable. These are the types of scores that illustrate why new consumers leave boating and camping within their first few years of ownership. What’s worse is that dealer Net Promoter Scores, which measure loyalty to the dealership, plummeted throughout 2020, according to CSI. In March 2020, a month that would have measured purchases from mostly prior to the pandemic, NPS scores were around 95. By July, they had fallen to just more than 65 before climbing for a couple months and then falling to near 50 by December.
These scores are shocking and frightening, and should be yet another warning shot across the collective bow of the marine industry. It’s time for us to understand that the sales process is not equivalent to the customer experience. We perform well as an industry in the sales process, and our CSI scores reflect that. But the post-sale experience is something we can and should fix. We can improve the overall condition of the boat before delivery through better predelivery inspections. We can be diligent about post-sale follow-up.
As you invest in these changes, your scores, customer loyalty and customer retention will improve. Take the time now, while there are no boat shows and low inventory levels, and put an effective follow-up process in place. There’s still time to help your customers before boating season arrives.
Matt Gruhn is president of the Marine Retailers Association of the Americas.
This article was originally published in the March 2021 issue.