In the world of major unit retail, stark differences exist between the auto and marine industries. Major unit sales volume, alone, drives the bulk of the disparities between how each industry operates and derives its profits. It also commands different approaches to the critical dealer-manufacturer relationship that affects so much of the customer experience.
In the automobile industry, franchise agreements govern the manufacturer and dealer relationship. The dealer purchases a brand’s franchise, which comes with a set of clear expectations for how the dealership will deliver for the brand. In return, the manufacturer grants the dealer the right to sell and service its vehicles in a specific market area. Such a franchise gives the dealership an ongoing right to use the manufacturer’s trademarks and operating system, defines the dealer’s obligations and typically provides incentives for the dealer to act in the customer’s best interest because they are paid by the factory to perform warranty and recall work.
In the boating industry, dealers and manufacturers do not use franchise agreements, and there are various views on the pros and cons to this approach. Manufacturers build a brand and set goals for their business. Dealers build a brand in their local marketplace and set their own goals. The goals generally align — sell lots of boats, take great care of customers — but they don’t always fall into perfect alignment.
For example, boat dealerships commonly carry multiple boat lines, some of which may compete with one another. Dealers must find a balance between the needs of each brand and the goals of their own business. Manufacturers naturally desire to be priority No. 1 in each dealership, and they often find it challenging that dealers have various operating systems, strategic initiatives, customer satisfaction requirements and other criteria.
Further complicating the issue is inconsistent use of written dealer-manufacturer agreements, which would document agreed-upon expectations. The system allows for gaps between the partners’ expectations for one another and real-world performance. All of this leaves our industry with a real need for dealers and manufacturers to engage in intentional, collaborative conversations around expectations and performance — conversations that would ultimately lead to both parties delivering a better end-user experience and higher levels of customer loyalty.
Three years ago, the board of directors (all dealers) at the Marine Retailers Association of the Americas and numerous strategic partners (all manufacturers and suppliers) collaborated on a directive in the MRAA’s strategic plan. The idea is for the association to serve as an advocate between dealers and manufacturers, and to formalize conversations between the two parties.
Admittedly, as the MRAA is largely a dealer-focused organization, bias was a concern, but I’m proud to tell you that through the guidance of dealers and manufacturers, MRAA is rolling out a comprehensive performance review program to support industry collaboration and growth.
As of late October, the MRAA was working closely with two multibrand manufacturers to roll out a pilot program. It includes a scorecard that will encourage dealers to score and provide feedback to manufacturers, and a scorecard that will encourage manufacturers to score and provide feedback to dealers. The scorecards were built using direction from an MRAA strategy meeting to create a common platform. After more than a year of effort, including dozens of conversations with industry stakeholders, the draft scorecards were fine-tuned by the MRAA board of directors and then refined through one-on-one conversations with boatbuilders.
Feedback was compiled, eight scorecard drafts were created and critiqued, and near-final versions were presented for feedback to the MRAA board and strategic partners at an in-person meeting Sept. 30. The final versions are now in play. After the pilot program, MRAA intends to roll out a general program in 2025. We’ll learn from the first set of brands and their dealers, and will refine our process and our scorecards to create a meaningful program.
What topics do the scorecards address? The dealer scorecard will ask manufacturers to rate their dealers on customer satisfaction, professional appearance, inventory management, sales, service and parts effectiveness, and operational excellence. The manufacturer scorecard will ask dealers to rate their manufacturers on their market territory, product quality, parts delivery, satisfaction with the manufacturer’s representative, and satisfaction with the overall relationship and the dealer agreement. The scorecards will also allow the parties to address education and training, marketing and promotions, warranty programs and processes, and market share.
The MRAA’s discussions around this have garnered many questions, all of which we are happy to hear and talk through. If we, as an industry, want more boat buyers and more repeat boat buyers, we must deliver a better customer experience — one that warrants today’s busy consumers investing their hard-earned money and their precious time into our products and services, into our livelihoods. We believe that creating meaningful conversations around the dealer-manufacturer relationship can create a better future for decades to come.
Samples of the dealer and manufacturer scorecards will be unveiled at Dealer Week in Orlando, which is scheduled for Dec. 8 to 11. The program will be fully rolled out by the MRAA and a third party, Customer Service Intelligence, which has a rich history of capturing customer information and data. The MRAA will then share reports with manufacturers who participate in the program. Manufacturers will receive comprehensive feedback from their dealer networks, along with an (anonymous) aggregate comparison to industry and segment averages. Those manufacturers will be expected to share their dealer scores and feedback with each individual dealer.
While many tools, resources and how-to’s for using the scorecards are forthcoming, the MRAA is confident this new program will drive performance improvements on both ends of the supply chain. The scorecards will elevate conversations around expectations for dealers and manufacturers, and the feedback regarding performance will provide both parties a pathway to continued improvement, growth and customer loyalty.
Please stop by the Dealer Week booths for either the MRAA or Customer Service Intelligence to learn more about this, or contact me directly after Dealer Week is over: [email protected]
