No matter the role you fill in your dealership — owner, parts manager, salesperson, service advisor, receptionist — your core job function is to deliver value to customers in a way that differentiates your business from the dealership down the street. While that thought may not be ever-present in the midst of a market slowdown, there is never a better time to focus on it.
Let’s be real: The market is tough. Most dealers are struggling to find real buyers; financing rates remain challenging; and curtailments add up quickly when you’re still sitting on 2023 inventory. The slowdown in retail activity has led to steep discounts and a corresponding sharp decrease in the contribution that new-boat sales make to a dealership’s revenue picture. Across the industry, dealership gross margins are down by an estimated 3 to 5 percentage points, and they are expected to remain pressured well into 2025.
Long story short, if you’re experiencing some pain in your dealership, you are not alone. The question is: How can you outperform the marketplace?
When you consume industry data and analyze year-over-year sales charts, it’s easy to assume that everyone is suffering during this downturn. It never ceases to amaze me, though, that this information is not the whole story. I talk with dealers from different regions who sell different brands and boat types. One dealer can feel like he’s on the ropes, while another in the same market can be having his best year ever.
In the interest of helping you trend toward the latter, here are some ideas that our team at the Marine Retailers Association of theAmericas have picked up from dealers across the industry.
First and foremost, take a step back and analyze: How easy is it to do business with you? Severe sales spikes and decreases in the past four years have likely resulted in processes or approaches that present obstacles to customers doing business with you. One dealership, for example, noted that it ensured low barriers for customers to take test drives. Something as simple as that can move a customer closer to a sale.
Next, consider alternative revenue centers. While new-boat sales have slowed, opportunities in preowned boats, brokerage and consignment have strengthened. Have you taken a fresh look at your preowned boat process — from acquiring product all the way through trade evaluations and trade-ins? Have you considered creating your own certified preowned program to set yourself apart? If you don’t want to tie up your cash in more inventory, then perhaps it’s time to launch or strengthen your focus on brokerage or consignment. A whole lot of pandemic buyers are ready to trade up or sell. You should already be jumping on that opportunity.
Rethink your marketing approach. During the sudden downturn in 2008, dealers made what seemed to be a tough decision to abandon their yellow-pages marketing. Today, worries about that choice seem almost laughable. Differentiate yourself with more than factory rebates and discounts. One dealer invested in a new website, better newsletters and a dedicated marketing department. Another simply refused to pull back on marketing, creating an advantage against dealers who did. Still other dealers are becoming adept at targeted marketing. The key is to demonstrate that your value proposition stands out from the crowd.
Think about how you can get previous or current customers on the water using their boats. Create reasons for them to do so. Come up with ideas to sell accessories that will make their boating experience better. Don’t rely only on boat shows to create sales programs; also create your own events to bring the customers in, put them in boats for demos, nurture your relationships and set yourself up as the go-to source for all things boating in your market.
Down cycles in the boat market aren’t just about being financially responsible. They’re also about thinking creatively about how to deliver value to customers. When you can meet the customers where they’re at, your ability to stay strong in an underwhelming marketplace greatly increases.
If you’re ready to learn what you need to do to outperform your competition in 2025, then make plans now to attend Dealer Week this December in Orlando, Fla. We have added an entire educational pathway focused on marketing strategies and tactics to create the business you deserve. Sessions will include practical ways to leverage AI, how to craft your marketing budget so it turbocharges sales, and how to utilize community-based marketing to increase your reach. This all-new track will complement tracks about sales, finance and insurance, service and leadership, all offering timely, relevant and impactful advice.
Part of the success equation in a slow market is to evolve your value proposition to meet changing consumer needs. Dealer Week (DealerWeek.com) is designed specifically to help you do that. I hope to see you there.
This article was originally published in the August 2024 issue.
