The 2011 Boating Industry Top 100 Dealers
As boating businesses thankfully closed the door on a devastating 2009 and turned to face 2010, hopes were high that it would be a year of recovery, one in which consumers would regain confidence in the future, leading the marine market back to the glory days of a few short years ago.
But those hopes weren’t fulfilled. New power and sailboat unit sales declined yet again in 2010. The 10-percent drop left the market fighting over sales of just 188,230 units. While this certainly represented a slowing of the decline compared to 2009, when unit sales decreased 35 percent, it was not the turnaround many had expected.
The industry’s leading dealers bucked this negative trend, however. Rather than follow the marketplace, the 2011 Top 100 Dealers adopted strategies and processes to take their businesses to higher levels of performance and professionalism. Their laser-like focus on creating stronger, more resilient dealerships resulted in an impressive increase in sales.
Added together, the Top 100 Dealers’ revenue jumped 8.8 percent to $957 million ($1.51 billion, when our two Hall of Fame companies are included). That is 9.9 and 15.6 percent of the overall boating market, respectively.
Despite the market’s disappointing performance, the Top 100 Dealers concentrated on opportunities for growth and improvement, using them to create a more stable and secure foundation from which to operate. Here are the strategies they employed to outperform the boating market during one of its most challenging years.
More market share
The No. 1 source of growth for most Top 100 Dealers in 2010 was increased market share.
“We have watched the marine industry erode instead of grow over the past several years, so we know the importance of having a growth strategy,” comments Jeff Wilcox, president of George’s Marine & Sports. “Every business wants to grow sales and profits, but we also want to grow our market share. Market share will be the long-term sustainability factor to keep us ahead of the competition.”
Industry estimates regarding the percentage of North American dealers that went out of business during the recession range from 35 to 50 percent. The Top 100 Dealers were well positioned to absorb these customers. They had the processes and company cultures in place to offer consistently high levels of customer satisfaction. They were investing in marketing while many of their competitors had cut it out of their budgets. And they offered a diverse range of products and services.
In fact, a strategy that many Top 100 Dealers embraced in their quest to adapt to the market’s conditions and take advantage of its opportunities was the addition of new product lines. In all, 41 of our Top 100 Dealers partnered with at least one new boat builder in 2010.
In some cases, that meant entering a new market niche. Such was the case for Prince William Marine, which formed a relationship with Harris FloteBote in 2010.
“We spent time researching various manufacturers and the local sales statistics in our region for pontoon boats,” explains owner Carlton Phillips. “After determining the market was there and needed, we finalized our decision shortly after returning from the Marine Dealer Conference and Expo. This decision forced changes in our marketing strategy, training, as well as service with the addition of the outboard motors.”
As is no surprise, given the performance of this market in recent years, the pontoon boat category was one of the most popular areas in which dealers added boat builder partners. In fact, 30 percent of the Top 100 Dealers that added a new product line chose a pontoon brand.
Port Harbor Marine added Berkshire Pontoons in the late summer to help the company fill out its product line-up, a move that had an immediate impact, according to the company. As a Premiere dealer, “we felt we were missing the under $25,000 market,” explains company president Rob Soucy.
Other dealers sought out partners adept at creating products to suit the market’s more price-sensitive consumers.
Buckeye Marine, for example, took on the Starcraft line in order to attract the entry-level buyer and secure pontoon boats during a period in which its other pontoon boat builder was experiencing shortages. This move “certainly added to our bottom line,” according to co-owner Gary Poole.
In other instances, dealers uncovered opportunities to partner with premium brands that offered the ability to target a customer base previously unavailable to their dealership.
Such was the case at Hampton Watercraft and Marine, which has added Eastern Boats, Hunt Yachts and MasterCraft in an effort to carry the best line in each category.
Lodder’s Marine also pursued this strategy, adding Cobalt and Bennington in what it called its “biggest change for 2010.” While the company’s roots were formed in selling value brands, these brands suffered huge declines at Lodder’s during the downturn, while its premium brands were growing. In addition, customers who were drawn to the premium brands were either paying cash or had sufficient credit whereas their value brand customers were struggling with credit.
Therefore, the dealership made the decision to begin shifting its image away from being the “entry level kings” to being the “kings of premium.” To achieve this, Lodder’s began courting Cobalt. A year later, in mid-July 2010, it became the new Cincinnati Cobalt dealer. A month later, an opportunity became available for Lodder’s to take on Bennington, which also fit with its new direction. Since then, these two brands have become top producers for the dealership.
It wasn’t just boat lines that Top 100 Dealers sought out in 2010, however. George’s Marine & Sports created H20 Lifts and Docks in 2010, a separate company that sells Sunstream Boat Lifts and Naylor Docks. It also added a new boat line and a new trailer line.
“We know the marine industry is not in upward growth, so for us to continue to increase sales and be profitable, we need to look for new opportunities for growth,” says Wilcox.
M&P Mercury Sales Ltd. did take on new boat brands in 2010 (Bayliner and Meridian). But perhaps even more powerful was its strategy to target what it calls “the new affluent ethnic consumer.” The dealership hired interpreters, developed internal training programs and networked with Asian realtors in its marketplace in order to better target the local Chinese, Korean, Taiwanese, Persian and Indo-Canadian ethnic groups. As a result, 40 percent of its Sea Ray sport yacht and yacht sales were to non-native Canadians and 25 percent of its Meridian sport yacht sales were sold to clients from this market segment.
A longer reach
Some Top 100 Dealers grew their physical footprint in 2010 by adding additional locations.
With the lease on its current facility running out, Hampton Watercraft took advantage of the weak real estate market to enter into an agreement with the owners of a nearby marina to lease the entire facility with the option to buy in 2.5 years. In addition, the company has entered into an agreement with another local marina to sell its Tiara brand from a satellite sales office at its location.
Strong’s Marine opened a new satellite office in Port Jefferson, along the North Shore of Long Island, New York.
“While the office’s primary goal is to increase boat sales, Port Jefferson and its surrounding towns are prime boating communities where the opportunity for additional winter service and storage is available,” explains managing member Jeff Strong. “This opening brings Strong’s Marine to another area not previously covered by our organization.”
New England sailboat dealership Advantage Yacht Sales was also among those that added a new location in 2010. Its new office in downtown Boston is in the city’s newest marina, Fan Pier Marina, in an area that has been called the “new Boston.” The company occupies a 1,000-square-foot building situated in a high foot-traffic spot directly on the waterfront, with windows facing Boston Harbor.
For Singleton Marine Group, expansion meant the addition of a new business-to-business revenue stream. By adding three additional transport trucks to its fleet, the company now has the ability to transport boats for other dealers in its region, in addition to its own products.
Quality Boats has been taking advantage of the downturn by actively seeking local real estate opportunities. Last year, it purchased a three-acre property with which it shares a fence line. The property was initially developed to be a boat dealership and has served as an RV dealership more recently. In addition, over the past 18 months, it has entered into negotiations to partner with or outright purchase two local high-and-dry marinas.
“While we will continue to be conservative with expenses and inventory, our strategy for growth for this coming year is to be opportunistically aggressive,” says Dan Bair, CEO. “Economic crisis breeds opportunities.”
Higher boat margins
One major focus of the 2011 Top 100 was growing margins on new and pre-owned boats. In 2009, most dealers’ No. 1 priority was moving aged product, which often meant sacrificing margin. But 2010 required new sales strategies for most dealers. The vast majority of aged and distressed inventory had been cleared from the market, and it was time to return to a focus on making money.
At The Sportsman, the sales team strove for higher margins by returning to the basics of relationship selling.
“We spent more time with each prospect, including ‘C’ and ‘D’ customers,” explains company president Rob Youker. “We clocked ourselves on how fast we could answer a website request. We strove to answer phones on the first or second ring, give solutions to problems and answers to questions on the first contact and if not, return the call faster than expected. The majority of prospects were e-mailed personal correspondence along with pictures of both their product of interest and the lifestyle they dreamed about.”
Boat Town focused on selling the boating lifestyle rather than succumbing to “the panic and fear of price selling that a lot of dealers fall into in this economic environment.”
To help their sales teams make this transition, many Top 100 Dealers invested in training. Sail & Ski, for example, enrolled the majority of its staff in a new series of online modules developed by sales trainer Glenn Roller. The monthly modules provide staff with year-round training, and the staff’s engagement with the program is closely monitored since the company receives a discount contingent on all staff passing a test to move to the next level.
M&P Mercury also hired Glenn Roller in 2010. However, it took sales team support to a new level when it brought in a counselor to assist the sales team on both a professional and personal level.
“We recognized that some of our team’s success was being hampered by personal issues that were getting in the way,” explains M&P Owner Bob Pappajohn. “Giving key staff members access to a counselor helped open the door to overcoming their personal challenges and achieving their goals.”
Another strategy for increasing margins was a return to more effectively selling a dealership’s competitive advantages.
Pride Marine Group, for example, created a “Why Pride” booklet in 2010 to better communicate “who we are and what we offer” to prospects, putting its commitment to excellence in print to help customers make more educated decisions about who they want to do business with.
Another trend we observed among the Top 100 Dealers was a packaging of boats and service, especially in the first year or two of ownership.
In 2010, Pride Marine Group created its multi-level Passport Customer Care Program, involving various winterization and storage options, which was further expanded in 2011 to include “everything a customer would be paying for in the first 12 months of ownership.” The program, which is now included with every boat sold, has become Pride’s single most powerful sales tool.
As a variation on this theme, Port Harbor Marine created a new promotion in 2010 to encourage customers to “Swap Their Ride” for a new boat before the winter storage season. Those who took advantage of this offer received free dockage for the rest of the season, as well as free winter storage and services.
On the pre-owned side of the business, an increasing number of dealers adopted industry best practices designed to produce higher margins.
M&P Mercury, for instance, adopted a detailed trade-in process, which included the use of a new trade evaluation form.
“This gave the salesperson the opportunity to get more specific information from the customer prior to the boat being brought in for inspection,” explains Pappajohn. “The intention was to ensure clear communication between the salesperson and customer on the condition of the trade so there is less back and forth when negotiating price.”
We’ve all heard it a million times: “You can’t manage what you don’t measure.” This was an area where many Top 100 Dealers took great leaps forward in 2009, and that trend continued in 2010.
Pride Marine Group completely overhauled the way it measures its results and delivers that information to its managers, for instance.
“We are transitioning all of our reporting from being a historical review of performance (last month, year-over-year, year-to-date tracking) to our reporting being a steering tool, guiding present and future decisions,” explains owner Paul Nickel. “We feel this will allow each decision’s impact to be monitored and to allow us to correct actions before they become issues.”
At Bosun’s Marine, a one-page internal “summary recap sheet” was developed to give both financial and non-financial management an up-to-date snapshot of its business at any point in time. This document includes such information as current cash position; future cash requirements; current sales pipeline and anticipated closing dates; new and used boat sales by location for the current month and year-to-date; profitability by location for the current month and year-to-date; profit projections; inventory on hand; accounts payable and receivable outstanding; and a summary of curtailment payments.
Weekly sales tracking by salesperson was instituted at Gordy’s Lakefront Marine in 2010. Under its new system, salespeople measure their results and then share them with the entire Gordy’s team at a weekly meeting. This gives them an improved sense of responsibility and accountability, a better understanding of their goals and where they stand on any given day, and useful data about their sales trends. In addition, the information helps management make changes as needed.
“In the past, our reporting has only been top down,” says co-owner Rallee Chupich. “This reporting is bottom up, and as we have found, more meaningful on the individual level.”
Hampton Watercraft created a new leads report in 2010 that shows new leads added per salesperson as well as leads that each salesperson has contacted in the past week. The report allows management to see who is getting the most leads, ensure that each salesperson is reaching the goal of 10 leads a week, and review where the new leads are coming from, compared to the marketing and advertising efforts of that week.
In 2009, M&P Mercury introduced an initiative called “The Score,” in which it created scorecards to measure its results throughout its operations. In 2010, the company expanded its use of this concept through the upgrading of its IDS system. All employees with access to the system are able to check key performance indicator dashboards the moment they login, thereby giving employees even more tools to evaluate their own performance and make better decisions for the dealership.
“Where we found a problem, creating a score for that challenge helped put a spotlight on the progress of overcoming it,” explains Pappajohn.
Tighter inventory management
Inventory management was vital to Top 100 Dealers’ efforts to improve profitability in 2010.
For Pride Marine Group, this meant hiring an inventory manager and adopting a new pricing structure. Now, the company has in place a new pricing strategy and incentive program.
One piece of this strategy involves a slush fund the inventory manager uses to target specific boats — those that are older units or have been identified as slow movers. As a result, the company reports that more than 60 percent of the targeted boats are selling within seven days. Turns have increased dramatically, as have margins.
Two new additions to Singleton Marine Group’s inventory management strategy in 2010 were the “Boat of the Week” and “Featured Boat” initiatives. Through Boat of the Week, a single boat is moved into a high-profile position in front of Holiday Marina. Similar in concept to the Boat of the Week, a Featured Boat is posted to the company’s homepage and shared via Facebook and Twitter.
“Because it doesn’t make good financial sense to haul a 30-plus-foot cruiser out of the water each week, this gives us an electronic forum in which to display a larger variety of inventory, all with a bare minimum of cash expenditure,” owner Austin Singleton explains.
Like most Top 100 Dealers, Quality Boats has brought its inventory to “very manageable and sustainable levels,” eliminating almost all non-current units. It also has forged alliances with other Florida dealers to share inventory so dealers that are located within driving distance of each other are not stocking many of the same models. In addition, the company takes advantage of as many discount programs as possible and stocks mostly “new, innovative models versus older models that have been in production for a number of model years and have a greater likelihood of having non-current dealer inventory available in the field and/or pre-owned boats available at a much lower price.” But perhaps the most significant difference in its inventory management strategy is the amount of interaction Quality Boats now has with its boat builder partners.
“We now forecast our orders and plan marketing strategies with our suppliers, studying trends and market data when ordering boats and planning boat sale promotions and events,” explains Bair. “We have doubled our face-to-face interaction with our boat suppliers so that we each can discuss real time issues and ideas as they happen instead of reviewing months later.”
The drive to manage expenses and boost profits led many Top 100 Dealers to adjust their marketing strategy in 2010, focusing on more targeted, cost-effective and innovative methods of reaching their audience.
Like most dealers, George’s Marine & Sports saw opportunities to enhance its SEO and drive more customers to its products online in 2010, but rather than dive in headfirst, the company cautiously researched the various options to determine which would be most effective.
“Our marketing dollars are limited and we want to know we are spending them correctly, not just on the newest and latest technology to ‘be first,’” says Wilcox.
This focus on measuring the return generated by marketing investments is a growing trend among the Top 100, driving changes in their strategies.
“In 2010, we began the planning and execution of a decision formally made in 2009 to transition from traditional advertising and marketing media such as newspaper, yellow page and radio advertising to Web-based and social media marketing,” says Rod Malone of Sail & Ski. “We made the decision to change what we were doing in the past for two primary reasons. First, traditional advertising and marketing methods have become too expensive and not as demographically targeted for our budget and needs. Secondly, the way consumers are seeking information and making purchase decisions was and is changing, and we wanted to be on the leading edge of that change.”
Due to growth in consumer consumption of and participation in digital media, its relatively low cost of usage and its effectiveness at communicating with current customers, many Top 100 Dealers continued to enhance their strategies in this area.
Gordy’s Lakefront Marine put an extraordinary amount of effort into taking its digital presence to the next level in 2010. The company began the process of redesigning its main site and updated its Pro Shop website, adding links with higher quality images for online shopping. It also enhanced its online service scheduler, making the process easier and faster for customers (as well as administrators). In addition, Gordy’s follow up e-mail was updated with “click here to view your boat” pictures and formatted to allow customers to view the images on their phones.
The company stepped up its social media efforts by shooting video of all new and used boats, while uploading them to YouTube, and its Facebook presence continues to grow in followers and effectiveness. A winter “Ice Party” that was primarily advertised through the site attracted more than 750 people. The company also advertises events and other fun happenings via Twitter and afterward posts pictures via Flickr.
Like many Top 100 Dealers, Hampton Watercraft also made a big Facebook push in 2010. This began by making the switch from a personal Facebook page to a business page, which allows the dealership to track and measure its efforts’ effectiveness, including how many impressions, page views and comments it receives on a weekly basis. The company also instituted a minimum requirement of two posts per week, though it posts an average of three to four days a week.
“It displays our staff in a different light than they are used to in the office,” explains Villareale. “We believe that by showing our staff engaged in events, as well as opening a forum for them to communicate with guests, it creates a different kind of bond with customers, a more friendly one, which eventually leads to a more trusting relationship.”
Another trend that began in 2009 and spread in 2010 was the use of videos to help sell new and pre-owned boats.
When Matt Lodder returned from the 2010 Marine Dealer Conference & Expo, he was on a mission to begin incorporating video into Lodder’s Marine’s marketing efforts. He began by taking videos of boats in inventory and posted them to YouTube, but he quickly found they weren’t getting the traffic he had hoped. As a result, he worked with his website provider to have links to the videos added to the inventory listings on his website, which has been a “huge hit with our customers,” Lodder says.
“The great thing about videos is none of my local competition are doing them,” comments Lodder. “I have tagged all my local dealers on the videos I do so when someone searches my competition on YouTube, my videos show up. The whole video deal has differentiated us from the competitors and has definitely given us a boost on our online marketing efforts.”
Some dealers put a different spin on their video strategies.
As part of Hampton Watercraft’s in-house video production push, for example, it has a goal to produce one “how-to” video a week on topics such as: how to cleat off a boat, how to anchor a boat, how to dock, pre-departure rules and precautions, and general navigation rules.
“We can provide first-time boaters with personal safety and instructional information, which helps to build our relationship and helps the customer trust Hampton Watercraft and Marine,” says Villareale.
Kelly’s Port kicked off a new series of videos in 2010 to answer its online shoppers’ question of “Why should I do business with this dealership?” Each two-minute video in the series focused on a different area of Kelly Port’s business, including service, wet storage, dry storage, sales and the gas dock. The company had them professionally produced by a local TV station for $2,500, a rate that seems well worth it, given the results.
Kelly’s Port’s wet storage slips went from 60-percent occupancy to 85-percent occupancy. It has had to turn down dry storage due to space restrictions. Its gas dock is setting records. Its sales department had its best year ever in 2010. And the dealership had to hire three new service technicians to keep up with the demand for service.
While the dealership admits that other factors played a role in this growth as well, “a surprisingly large amount of people make the comment about how they saw our videos online and that’s what spurred them to come in and do business,” says Kyle Kelly, operational manager.
For Singleton Marine, ramping up its social media efforts meant bringing them in-house to build closer relationships with the local boating community. In fact, the company now takes this area of its business so seriously that it measures its results, using SproutSocial as an analytic tool to measure the level of engagement, number of fans/follows, demographic data and geography. This allows the company to manage multiple accounts using a single portal, which it says is much more efficient than managing each account individually.
Another tool Singleton Marine uses to maximize the effectiveness of its social media and other digital efforts is HubSpot. The in-bound marketing software solution provides tools that allow the company to “get found” by more consumers, increase its customer conversion ratio and better analyze the effectiveness of its online marketing.
Most Top 100 Dealers began narrowing the focus of their marketing and communications efforts to better target former boat buyers in 2010.
Kelly’s Port, for example, launched a customer referral program as part of a grassroots marketing campaign that helped it achieve the best year in its 34-year history.
“We realized that our biggest strength was that we were expanding, gaining market share, and we had been in business longer than anyone else in our area,” explains Kyle Kelly. “That being said, we felt it was our time to capitalize on this market presence. One way we thought we could do it is throw a bunch of money into billboards, print, radio, etc. that we’ve seen very little return on. Or, we could continue our grass roots efforts in a way that would help us sell boats with some extra money to give it some ‘umpf’ behind it.”
Unlike other companies’ referral programs, Kelly’s Port’s targets local businesses, such as realtors, bankers, insurance companies, boat detailers and marine electronics installers. It has been so successful for the dealership that it is thinking about expanding it by attaching points to it so the highest referral office would get special rewards like free car washes.
Hardin Marine Arrowhead is targeting growth in service and storage operations through strategies such as a “no increase in prices” marketing campaign and special offers via social media.
In some cases, this focus on current customers translated into more customer events.
Such was the case at Parks Marina, which broke new company records with the number of events it hosted in 2010. Between the Okoboji Winter Games in January and the company’s fall sales events, it hosted in-store boat shows, two open houses, a ShamROCK party, a Storage Customer Appreciation Day, the Pirate Plunge, Business After 5, a Cobalt Rally, a Community College Luau, and more.
“All have become reasons for our customers to come see us beyond the normal day-to-day purposes,” says owner Butch Parks. “And all promote the boating lifestyle, keeping us top-of-mind when it comes time to make a boat purchase (besides driving significant sources of additional revenue).”
Singleton Marine also ramped up its event schedule. The dealership added Volleyball Tuesday to its weekly event series at the Lake Lanier Islands resort. In addition to its Wet Wednesday wakeboard show and clinics, “Volleyball Tuesdays deepen our relationship with Lake Lanier Islands resort, a significant decision-influencer throughout the region, and create additional engagement with customers, prospects and the community,” according to Singleton.
At Quality Boats, several service and sales marketing programs were introduced to increase exposure and business, including the display of a boat on a trailer each day outside of a local bank with high traffic count as well as the use of Quick Response bar codes on advertisements and pricing.
This dealership also partnered with Tiara, Pursuit Boats and Galati Yacht Sales, a member of the 2011 Top 100 Hall of Fame, to hold three exclusive in-water boat shows.
One type of event over which Top 100 Dealers were split was boat shows. While some dealers took advantage of the downturn by buying up more space, others chose to divert some of those funds to dealership events.
Lodder’s Marine chose the former. The Ohio company increased its presence at boat shows during the recession, and this year was no different. With the addition of two new boat lines, it once again expanded its footprint, using the new space to create a Cobalt-only display inspired by the factory boat show at Cobalt’s dealer meeting. The dealership purchased brand new, plush “Cobalt white” carpet, built a custom display in which the boats were built into the docks, purchased a custom 10-by-40-foot Cobalt banner and asked Cobalt to make custom stainless steel rails for the steps. Cobalt also provided Lodder’s with a blue lighted Cobalt sign that it hung from an aluminum cage. The investment was well worth it.
As a result, Lodder’s Marine increased its show sales by 40.8 percent to $1,425,329. This compares to its projection of a 15-percent decrease in sales because it “didn’t have the show-stopping deals we’ve had the past two years,” Lodder says.
M&P Mercury didn’t have much of a choice about its boat show strategy in 2010. When the Winter Olympic Games came to town, its largest annual boat show was cancelled, an occurrence that Pappajohn calls “the most important change in our marketing department.”
“We were able to firsthand see what happens when you don’t have a boat show,” he says. “First off, we saved a lot of money by not having to outlay a huge expense for a major show. Not having the huge expense of the boat show in our first quarter gave us our first profitable quarter one in many, many years. That said, we seemed to miss the customer that would have showed up in June and July to say that ‘I fell in love with your boats at the show and I’m here to buy.’”
In 2011, the show was reinstated and M&P Mercury decided to support it fully. As a result, show sales and show-influenced sales are stronger than ever for the company,
Boat Town tells a different story, however. The Austin, Texas-based company reduced the size of its show space by half, which cut its boat show expense by 58 percent. The money that was saved was spent on the creation of private shows, such as invitation-only viewings of the Cobalt and MasterCraft 2011 model year lineups, which the company described as “hugely successful.”
Another strategy embraced by Top 100 Dealers to increase their communication with current customers was to dedicate more staff to this effort. At Pride Marine Group, for instance, the creation of a new CRM coordinator position served to boost its “interaction and contact with existing customers in order to increase their repurchase speed.” This person is responsible for targeting customer subsets for communications, assisting location managers in understanding who their customers are, helping the sales team maximize their lead conversions, isolating potential customers for F&I upsells, managing CSI data and follow-up, and more.
In a similar move, George’s Marine & Sports created a Relationship Management Centre in 2010 to instantly respond to e-mail and Internet leads in an effort to set an appointment with each customer. This new initiative was crafted in response to a more than 400-percent increase in these types of leads during the past few years. Within the first few weeks of launching this department, appointments increased by 15 percent, “allowing our sales team to do what they do best face-to-face,” according to Wilcox.
Sometimes the quest for higher profits meant improvements in accounting. One trend that was quite popular in 2010, for example, was the change from C Corp to S Corp, a move designed to help dealerships realize certain tax benefits.
At Port Harbor Marine, this also included working with an outside consultanting firm to create a separate holding company, as well as real estate and rental LLCs.
“The goal of this was to take advantage of any tax benefits, maximize profit opportunities and have better asset protection for our company,” says Port Harbor’s Soucy. “While on the surface, this may not seem like any change to the day-to-day operations, long term it will better postion PHM for growth."
Better collection of accounts receivable was another common improvement among the Top 100.
"In years past, virtually all clients were granted a 30-day payment term," says Jeff Strong of Strong's Marine. "The economic changes as well as our increasing growth mandated that we now have all customers keep an Auto Pay Form on file. The Auto Pay authorizes Strong's Marine to charge the client's credit card if the balance of their accounts are not paid by the 20th of the month following their completed service."
With a similar goal in mind, Hampton Watercraft instituted a paperless billing process. Not only did this lessen the dealership's carbon footprint, but it also made the billing process more convenient and quicker while reducing its cost.
Through this new process, customers receive an e-mail with the invoice attached the same day the invoice is completed by the servi e department. This creates a faster turnaround time for both the customers and Hampton Watercraft. The customers can choose to leave their credit card on file and give the company permission to process payment verbally or by e-mail, or allow the credit card to be charged as soon as the invoice is completed. Another benefit is that the process allows the Hampton Bays, N.Y.-based firm to instantly address any customer concerns about the work completed while the details of the job are fresh in the technicians' and service manager's mind.
Hampton has also adopted a new system to track and respond to receivables more than 60 days old. Not only does the dealership send monthly statements, Vice President Joe Villareale sends an e-mail letter, offering options such as a payment plan, a trade-in for a less expensive boat or the sale of the product. As a result, its aged receivables have gone from 50 percent of balances due to 7 percent.
On a mission
Perhaps the most significant change the Top 100 Dealers made in 2010 was in their outlook. After 2009, a year in which the entire industry was caught off-guard by the severity of the economic downturn, these leading dealers took the steps necessary to ensure they wouldn't be surprised again.
They weren't content to survive whatever challenges lay ahead. Rather, they were determined to prosper by taking advantage of the opportunities created by the difficult times.
Rob Youker, owner of The Sportsman, spoke for many of the Top 100 dealers when he wrote this in his application: "Our new business model was being sculpted by low consumer confidence, lack of urgency to buy, fewer prospective buyers and challenging borrowing requirements. We attacked it wit focus. Focus on what we could control while remaining aware of the things that were out of our control. Armed with a conservative budget as our guide, a strong cash flow position and a more focused sales approach, we set out in 2010 to bea the odds."