Boat sales up, customer satisfaction down


Post-sale follow-up is especially important for customers new to boating.

For years, the shipping industry lamented the downward trajectory of early boat buyers – that is, until the Covid-19 pandemic led to the first rise in more than a decade.

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

“Boat sales are all at record highs. It won’t last forever,” says Gruhn. “We need to do what we can to keep these boaters in boating. We need to make sure their experience is memorable, not only so we can generate repeat business, but also referral business. This is what will help us to develop boating.

Dealers see families buying boats as they look for ways to spend time together safely during the pandemic.

Dealers see families buying boats as they look for ways to spend time together safely during the pandemic.

Dealer dilemma

Even before the unexpected boat-buying frenzy, the attrition rate among first-time buyers was high: within five years, 42% sold their first boat and chose not to replace it, according to a Discovery Boating survey. This abandonment rate creates a challenge for dealers, many of whom were already facing staff shortages before the surge in demand for new boats. Short-staffed dealerships now need to pay attention to new entrants to ensure there is a positive experience. Shortages of boats and parts, driven by demand and manufacturing stoppages, are further complicating the dynamics and delaying service by weeks.

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

3Boat_Buyer_Attrition

Groups including MRAA are trying to leverage technology to make it easier for dealers to take care of customers and ensure 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 tracked or help you personalize the experience. That’s what customers need today: personalization. But man, tracking is key.

Boat buying frenzy

Between 2010 and 2018, the percentage of first-time buyers of new and used boats steadily decreased from 37% to 31%, stabilizing for a few years. When the pandemic hit, that percentage jumped for the first time in more than a decade to 34%, Ellis says.

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

The initial uncertainty caused many dealers to proceed with caution, so they were even less prepared for the boat-buying frenzy that followed, Gruhn says. “The floodgates opened and everyone wanted a boat,” he says. “I literally have dealers saying to me, ‘I have people who want to buy a boat who have never even been in a boat.’ It’s a big problem because they’re the ones who won’t know how to do things like get the boat back on the trailer. Those are the kinds of things we’re dealing with.”

Dealerships have been overwhelmed as people, who are mad at staying in isolation, look for ways to get in the water.

Dealerships have been overwhelmed as people, who are mad at staying in isolation, look for ways to get in the water.

According to preliminary sales data, nearly every segment grew at least 35% in June compared to the same period in 2019, Ellis says, but several value categories significantly exceeded that rate. For example, jetboats have increased by about 65%; runabouts, a segment that “has been in freefall for years,” grew more than 50%, Ellis says. “It tells me that young families… are buying boats to tow the kids and spend time together on the water,” he says. .

Inverse proportions

Customer experience has fallen victim to unprecedented demand, the “dark side of this story,” says Gruhn. Customer Service Intelligence Inc., an MRAA partner that tracks customer satisfaction indices on sales, delivery and service for 30 to 50 dealerships, showed that CSI has dropped more than 6 percentage points since April, Gruhn says, adding that in normal high season, this drop is closer to 0.5-1%.

A significant drag on satisfaction was lack of dealer follow-up after purchase, an area that scored 77.17%, down from 83.1 in the second quarter of 2019. which has been on our radar,” says Trent TerHaar. , National Director of Marketing at The Boat House, a dealership with seven locations in Florida, Illinois and Wisconsin. “We’re still trying to work our way through this.”

Industry advocates say it's essential to keep new boaters engaged in activities they enjoy so they keep boating.

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

The Boat House is making a big internal effort to determine how customers are doing, having added a full-time staff member who only tracks customers located in Florida, TerHaar said. “We rolled it out as a beta test, and it’s been huge with customers,” says TerHaar. “We learned the hard way. We expected the salesperson’s job to be to follow up with the customer, and they just don’t. And especially now, all of a sudden there is another client in front of them; you really can’t ask the seller to do that. We got to a point where we needed a dedicated process or person to have those touchpoints after.

The MRAA has long advocated that dealerships hire full-time customer experience managers to follow up with buyers and ensure they have the tools necessary for a fun and 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 hiring best practices for these customer experience managers.

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

Outsourcing follow-up

Several dealers say that even with all the resources available, business was too good to find the 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

The MRAA has therefore been working on a way to outsource this role for around $1,700 per year (assuming 100 boats have been sold) and is in the process of contracting a third party who has experience in the industry and the CSI, says McCann. The third party will follow up to ask customers to rate their experience with the dealership. Data will be measured and broken down so dealers can see where they excel and where they need work. And the dealership will receive a report to assess issues that continually arise, as well as areas of continued success.

“The cool thing about the MRAA Virtual Business Development Center is that our partner does all the heavy lifting,” so results come faster than they would with a new hire, Keener says.

Boat House's northern stores are understaffed to track customer satisfaction after a sale, so the company is considering adding MRAA's outsourced program.

Boat House’s northern stores are understaffed 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 to dealerships like The Boat House, TerHaar says. Despite the company’s efforts to add training and how-to videos for new boaters, new boaters generally don’t know what to ask for and need more guidance.

“We don’t want to be a transactional business; we want to be a relational business,” says TerHaar. “It’s a lot more work than following this client, but hopefully in three or four years they want to upgrade. But it is an investment and it takes a lot of effort. You should treat all those customers like gold.

This article originally appeared in the September 2020 issue.

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