Dealers Share Pre-Owned Boat Sales Strategies

In the August 2024 MRAA Pulse Report, a monthly marine retailer survey we partner with Baird and Soundings Trade Only to produce, we found that 2024 continues to be challenging due to soft retail demand, high inventory levels, inflation, consumer hesitancy to purchase and more. This has led to a continuation of negative industry sentiment for 2024 and in the 3- to 5-year outlook.

These shared insights speak to the challenge of pre-owned sales, but also a slight rise in consumer interest. An anonymous dealer reported, “We have seen an increase in customers looking for pre-owned units, but many are looking for heavily discounted units – and still not choosing to purchase. We are spending a lot of time discussing price versus value with customers on pre-owned units, helping them weigh the different options of pre-owned versus new. There are a few sales, with ‘few’ being the optimal word.”

Dealers Share Pre-Owned Boat Sales Strategies

While many participants shared that they have seen retail declines and have too much new and pre-owned inventory on hand, others could benefit from and move more units in both segments if they could secure more inventory. Four percent of those surveyed reported new boat inventory was too low and 13 percent pre-owned inventory was too low! While 61 percent of participants said pre-owned boats were in decline in August, 20 percent reported growth. Even in tough times, there is light in the perceived darkness.

Here are three examples of bright spots from three random participant responses:

  • “No real issues with pre-owned. The price of new remains a challenge for many prospective buyers, leaving late-model, pre-owned boats more attractive than ever, especially if they still carry a manufacturer’s warranty.”
  • “We move pre-owned rather easily, just don’t have a lot of inventory.”
  • “We are very low on used boats. What we have started moving in August.”

To understand how certain dealers are having success in the pre-owned market, we asked them this question: “What strategies are you using in a challenging market to move pre-owned boats?” While the responses varied, five tactics emerged from their responses. They are below:

  1. Aggressive Pricing Strategies: To improve the attractiveness of pre-owned boats, dealers have instituted aggressive price drops, special pricing and heavy discounts. Some shared that they have even adjusted prices to meet current market demand. “We are buying them much more aggressively so that we can sell them at a decent margin and still be below average retail, ” a dealer shared. One team’s tactic is to lower the price until it generates enough leads and a buyer.
    MRAA advice: In some cases, it is as important for dealers to get used boats off of floor plan as it is to clear floor plans of new boats. Selling used boats late in the season may be financially beneficial as opposed to paying interest on them through the winter season. Keep track of your floorplan numbers and compare the possible costs between new and used as you move toward heavy discounts and aggressive price drops.
  2. Marketing Efforts: “We are using every marketing technique possible and getting very aggressive on price,” reported a dealer. Even in tight times, dealers are investing in their digital marketing efforts. Tactics include social media, online platforms like Facebook Marketplace and Boat Trader. Other marketing plans include in-house or in-water boat shows. Others mentioned targeted email blasts to reach potential buyers. “(Hosting) Customer test ride days. Events at dealership,” said one respondent.
    MRAA advice: A used boat demo day can work nicely as there is no concern that you are taking a new boat, finishing rigging and prep and putting hours on it. The pre-owned boat just gets used a little bit more, not decreasing value but increasing the possibility of the sale.
  3. Going the Extra Mile: To make pre-owned units more attractive to buyers and to enhance their value certain dealers offer better options and increased services. One survey respondent shared, “We are working with customers to get specific boats that fit their needs, being especially aware of pricing, budget constraints and especially finance terms, rates and payments.”
  4. Additional Services: Many shared that detailing and fully servicing their used fleet is mandatory. Others include dealer warranties and additional financing options. “Getting additional warranty on used boat. Also providing repower options. Sometimes painting the hulls,” revealed a dealer.
  5. Managing Inventory & Trade-Ins: Even though it’s considered a buyer’s market and some dealers seek more pre-owned inventory, they are being selective about what vessels they take in via trade. They avoid older or mechanically questionable boats. Some have sold units at a loss, while others have added brokering to their arsenal. “We are being conservative on our trade numbers to allow for flexibility in selling price without losing money. We also offer to broker boats for customers that would prefer to not trade in their boat,” remarked on survey participant.
    MRAA advice: Offering brokerage allows you to help the customer when perhaps their boat is not one you want to take in on trade or even when they want a price that is beyond the value you want to consider. 

These five common themes reflect dealers’ focus on marketing, maintaining quality in their inventory, pricing and trade-in selectivity. MRAA members can view the Ultimate Guide to the Pre-Owned Boat Market to navigate this portion of the market and capture more business.

Come November …
The other theme that also emerged was the concern for the economy and the upcoming election results. Some commented that they will wait for the election results to make further business decisions, while other confessed that they understand the nature of the business and that these things are out of their control.

“We’ve tightened our purchasing and overall business expenses, as a precaution. The boating world is receiving a cold slap in the face of pre-pandemic slumps. Some have forgotten this happens. But we always bounce back. The current economic and political climate has everyone on edge, but regardless of who’s in office, we believe the industry will rebound and stand strong once again,” declared an anonymous dealer.

Members can read the complete MRAA Pulse Report here.

If you are in doubt about any of the processes discussed above, we want you to be able to dig in deeper and use all the tools that we have available. If you are not a member, please contact Sherri Cuvala, Director of Membership, or visit join MRAA. 

5 Benefits of Installing & FOLLOWING a Sales Process

Natural talent and abilities can only take you so far. All one has to do is look at some of the most elite athletes in sports. Talent can take some of them to all-star status. Hard work and additional effort, day in and day out, can then make an all-star into an all-pro or shape them into a legendary-and-elite player bound for their sports hall of fame.

Similarly, some people were born for sales and have a knack for working with customers and closing deals. While others are fueled by their internal desire to succeed and continually feed that fire with continued learning and training, ultimately becoming the best of the best. Still others strive to excel and enjoy sales, but just need more structure and guidance to improve their game.

5 Benefits of Installing & FOLLOWING a Sales Process
A screen grab from the MRAATraining.com archives and the course “Fill the Gaps in Your Sales Process” with subject matter expert Jim Million (pictured) and Bob McCann, MRAA Lead Certification Consultant.

Whether you view sales as an art or a science – one complete with technical how-to steps – or a combination of both, it’s wise to understand that your unique personality and personal magic will only take you so far. It’s better to have an established process that your whole team can use to improve in every aspect of the sales. Ideally you want to install and follow a sales process that gives your team (from newcomers to old hats) the confidence and correct blueprint for winning in sales.

You may argue that you don’t need a sales process, saying that it allows your sales team to operate unrestricted and free. However, the process unites them and your brand’s approach to customized selling and providing an exceptional customer experience.

Here are five benefits of installing a sales process at your dealership that were shared by educator Jim Million and the MRAA’s Bob McCann in their MRAATraining.com course “Fill the Gaps in Your Sales Process.”

  1. Consistent experience for customers: Of course you have a designated sales person or team, but the fact that you’re providing each customer with a unique purchasing experience means that everyone who comes in contact with them is sort of selling your brand, the products and your services. It’s vital to let your sales pros utilize their exceptional skills in selling, but let everyone know the process to keep them on the same page and have a united front.
  2. Enhance your employees’ experience: A sales process creates accountability for all involved and eliminates guesswork and blindly tossing darts, hoping something sticks. People desire to know what is expected of them and having a roadmap of sorts on what to do and how to do it is immensely helpful.
  3. Helps onboard new hires: An extension of No. 2, implementing a proven sales process helps to onboard, train and guide your new hires. Would you rather your sales team be playing together as a symphony or let your newest talent wander around hoping they play the correct note at the right time? Remember, a process supplies guidance and order and reduced frustration.
  4. Coaching culture: Does an NFL head coach provide instructions for every player on the team? No! There’s a literal team within a team designated to coach every specialty area on the field. (O-line coach, D-line coach, special teams, QB coach, etc.). They also have one playbook, which is much like you having numerous sales positions and one sales process. Rather than having your GM and sales manager attempt to coach to several different sales processes, they coach to one proven system to improve your mentoring.
  5. Tracks to run on: Trains follow tracks. Slot cars lock into their groove on the track. By providing your team with tracks (a process and steps), you help them maintain their focus and use their unique abilities within your system. They aren’t running free or derailed by not knowing what to do or how to handle a certain step or situation. And, like a train, your team can stay on course together to your desired destination.

To address that initial question about the need for a sales process again. The answer is that installing and FOLLOWING a sales process benefits everyone in sales, your dealership as a whole and your customers.

Want more from Bob and Jim? MRAA Members can revisit this evergreen sales course, “Fill the Gaps in Your Sales Process,” at MRAATraining.com. They will help you identify your dealership’s gaps and B.R.I.D.G.E. them using Bob’s unique sales process approach. You’ll gain the tools to offer a consistently outstanding customer experience that fits your prospects, customers and culture.

Take the Next Step – Certification!
Standardized processes is a huge component within the MRAA Certified Dealership program. The intention of Sales Process requirement of The Marine Industry Certified Dealership program includes a Sales Process requirement to assure that your entire team is properly taking care of all customers throughout the sales journey. It help you establish your dealership’s unique process and track it to fill any holes that are causing inefficiencies or less-than-ideal customer experiences. Explore Dealership Certification!

Expanded Service Department Special Event Kicks Off Dealer Week 2024

MINNEAPOLIS, Sept. 4, 2024 – The Marine Retailers Association of the Americas (MRAA) today announced an exclusive Service Department Special Event, to be held at Dealer Week 2024 in Orlando, Fla. Designed to help dealership service departments outperform in a challenging market, this educational workshop has expanded from the inaugural service management offering in 2023.

“Because our special service department-focused event last year sold out and participants found immense value in attending it, we’ve expanded it for 2024,” said Mike Davin, MRAA Vice President of Industry Relations. “We are again holding it at Dealer Week to make it convenient for people to attend. This time, we’re bringing together service managers and service advisors for a robust educational workshop to help them work together to operate at the highest level.”

Expanded Service Department Special Event Kicks Off Dealer Week 2024

Dealerships are invited to join Valerie Ziebron, President of VRZ Consulting, and MRAA Senior Education Developer Bernie DeGraw on Sunday, Dec. 8, for the Service Department Special Event: How Service Management & Advisors Can Work Together to Outperform.

The Dealer Week add-on session is designed for anyone currently involved in service management, working as a service advisor or training for one of these roles. It provides teams the opportunity to enhance their performance, streamline departmental operations and improve the flow of information between the front-line service desk and management.

Event participant takeaways include:

  • Valuable marine service department benchmarking data
  • Insights into the drivers of shop performance
  • Proven tactics for success from other leading service professionals
  • A customized action plan to improve your service department’s Key Performance Indicators
  • Never-before-shared Golden Nugget Best Practices for attracting, keeping and growing technicians

“This unique event offers you a rare opportunity for all levels of staff in your shop to gain insights into what makes a superior service department operate,” said DeGraw. “It will provide exceptional value and learning opportunities aimed at increasing your revenue, decreasing your stress and, most of all, making your customers happy. I am confident that your team will gain new insights to help them make informed decisions and quick, significant changes in your shop that not only support their professional development, but also drive the department and dealership forward.” 

When: 9 a.m. to 3:00 p.m. on Sunday, Dec. 8 (lunch included) — Space is limited.

Cost: MRAA Members, $149 / Non-members, $199

Add this session to your Dealer Week registration today!

About the Marine Retailers Association of the Americas
At the Marine Retailers Association of the Americas, we believe that for the marine industry to thrive, the retail organizations that interact with the boaters in their community must thrive. With that in mind, MRAA works to create a strong and healthy boating industry by uniting those retailers, providing them with opportunities for improvement and growth, and representing them with a powerful voice. For more information, visit MRAA.com or contact us at 763-315-8043.

National Powersport Auctions Partners with Northpoint Commercial Financing 

POWAY, Calif. (September 3, 2024) – National Powersport Auctions (NPA), a leader in powersports remarketing and auction services, has partnered with Northpoint Commercial Financing to provide enhanced financial flexibility and options for marine dealers. This collaboration aims to streamline the buying and selling process for marine inventory. Dealers and businesses can now enjoy a broader range of turnkey financial choices when purchasing marine inventory through NPA.

About Northpoint Commercial Financing
Northpoint Commercial Finance, with offices in Alpharetta, GA, and Burlington, ON, is owned by LBC Capital, a subsidiary of Laurentian Bank of Canada. Northpoint combines experience with advanced technologies, fresh ideas, streamlined processes, and a customer focus formed specifically for the varied needs and goals of each business. Northpoint’s inventory finance offerings drive sales, enhance cash flow, and improve profitability for both manufacturers and dealers. More information about Northpoint and its offerings is available at www.northpointcf.com.

Floorplan Advantages
Dealers buying at NPA who secure a floorplan from Northpoint can significantly improve their cash flow, making inventory purchases smoother and faster. This financial arrangement with NPA and Northpoint allows dealerships to expand their inventory more rapidly, thereby attracting more buyers and increasing sales. The flexible payment terms offered by Northpoint ensure that dealerships can maintain a healthy financial position while growing their inventory. An increased inventory not only boosts buyer interest but also enhances the overall sales potential of marine products.

Marine Financing
Marine dealers and businesses now can explore the financing options available for marine auction purchases. For more information on this partnership and the financing program, reach out to Shannon Bennett, NPA’s RV and Marine Sales and Admin Coordinator, at sbennett@npauctions.com. NPA is committed to supporting your marine inventory needs and ensuring a smooth sailing purchasing experience.

This exciting collaboration between NPA and Northpoint Commercial Financing marks a significant step forward in providing marine dealers with the resources they need to thrive. With enhanced financial solutions and streamlined processes, dealers can focus on what they do best – growing their business and serving their customers.

About National Powersport Auctions:
Established in 1990, National Powersport Auctions (NPA) is the world’s leading provider of powersport vehicle remarketing services. NPA’s nationwide footprint serves the industry’s largest financial institutions, manufacturers, and dealers through their premier live and online selling platforms. NPA offers comprehensive data services, including the NPA Value Guide™, the industry’s most accurate wholesale valuation tool. NPA has company-owned and staffed facilities in California, Colorado, Florida, Georgia, Ohio, Oregon, Pennsylvania, and Texas. NPA is a wholly-owned subsidiary of Copart, Inc (Nasdaq: CPRT). For more information about NPA, visit: www.npauctions.com.

Learn more about partnering with the MRAA.

Promote Safe Boating Practices

• Discover Boating provides boating safety resources for industry stakeholders to educate customers
Promote Safe Boating Practices

Heading into the Labor Day holiday weekend, help promote boating safety by sharing resources and tips with your boating customers. Below is a collection of resources to share in showrooms, on websites and social media platforms so people can responsibly enjoy getting out on the water.

  • Discover Boating has compiled numerous articles and resources covering a variety of recreational boating safety topics, including the recent five-part safe boating video series, in collaboration with Progressive Insurance®. The video series covers safety topics that all boaters need to be aware of for a worry-free day on the water.
  • The Safe Boating Campaign is a worldwide effort focused on responsible boating led by the National Safe Boating Council and offers a variety of safety tips and resources.
  • The Water Sports Foundation has put together a boating safety education section to help boaters maximize fun and safety this Labor Day holiday.

For more resources and articles, visit DiscoverBoating.com or view Discover Boating’s Boating Safety Basics Videos here.

MRAA Adds Freya Olsen to Growing Team

• Olsen assumes the newly created role of Senior Director of Engagement.

MINNEAPOLIS, August 28, 2024 – The Marine Retailers Association of the Americas has hired Freya Olsen as its Senior Director of Engagement, the association announced today.

With nearly 20 years of marine industry-based association experience, Freya brings a wealth of proven expertise in marketing, membership, education, industry relations and program management. Most recently, Freya held the position of Director of Industry Relations at the National Marine Manufacturers Association, where she served as one of the leads for Discover Boating, working side by side with manufacturer and dealer stakeholders since the program’s inception.

MRAA Adds Freya Olsen to Growing Team
Freya Olsen, MRAA Senior Director of Engagement

“In MRAA’s continued growth and evolution, adding someone of Freya’s caliber helps us multiply the ways in which we serve our industry and impact the success of our members,” says MRAA President Matt Gruhn. “I believe that her leadership and her presence on an already incredibly strong team will help to elevate MRAA to new heights in all areas of our business.”

As Senior Director of Engagement, Freya will oversee the creation and implementation of MRAA’s membership engagement strategies, leading a team of professionals to increase participation in MRAA member programs and services used to serve, support and protect their businesses and the marine industry at large.
“I have long admired the work of the MRAA and am thrilled to have the opportunity to serve the dealer segment alongside a team of talented and passionate professionals,” Freya says. “Matt Gruhn and the entire MRAA team inspire me with their unwavering commitment to creating growth opportunities to help elevate marine dealers across North America, all while prioritizing kindness, integrity and authenticity within their work and culture.”

Freya continues, “In my new role, I’m eager to leverage my marine industry and association management experience to develop a strategic approach to member engagement. My goal is to meet both potential and current members exactly where they are and help get them to where they want to be, by supporting their business goals through access to MRAA’s impactful resources and dedicated staff support.”

MRAA Membership programs offer Bronze, Silver and Gold Memberships for dealers – which provide escalating access to MRAA’s vast catalog of online education and Dealership Certification program benefits. For Partners, MRAA offers Standard, Platinum, Education Champion and Strategic Partner levels for membership consideration. MRAA Partners – manufacturers, suppliers and service providers to dealers – can select their level of engagement and gain access to more and more benefits as they grow their participation.

MRAA’s Retail Membership business has grown by more than 100 percent since 2019, while MRAA’s Partner Membership business has grown by more than 80 percent. To learn more about MRAA membership, please visit www.mraa.com/join-mraa.

About the Marine Retailers Association of the Americas
At the Marine Retailers Association of the Americas, we believe that for the marine industry to thrive, the retail organizations that interact with the boaters in their community must thrive. With that in mind, MRAA works to create a strong and healthy boating industry by uniting those retailers, providing them with opportunities for improvement and growth, and representing them with a powerful voice. For more information, visit MRAA.com or contact us at 763-315-8043.

Adding Value to Your Sales Retail Extended Service Contracts (Extended Warranty)

A guest blog by Jason Cochran, Vice President, Global Product Protection

Adding Value to Your Sales Retail Extended Service Contracts
Global Marine Insurance Agency is an MRAA Education Champion.

In any economic climate or retail market, dealerships that adopt best practices prevail. One example is structuring your organization to offer as many goods and services as your customers need to participate in boating. If you are selling boats, retail finance is a critical piece of this equation.

As demonstrated by leading dealers, Finance and Insurance (F&I) is an essential element of success, elevating their organizations from the average. Customers will benefit from understanding their financing options, but finance alone is just one piece of a comprehensive business office. An applicable set of products to accompany retail financing can drive significant revenue and improve customer ownership experience. Product examples include insurance, extended warranty, pre-paid maintenance, GAP and surface protection.

There is tremendous value in extended coverage for expensive complex products. Boats can break down, and when they do, they can be very costly to repair. With this understanding, your dealership can provide solutions to mitigate these risks with applicable marine-specific extended coverage. Offering extended coverage is no different than helping your customer select the right boat in order to create the best ownership experience.

Adding Value to Your Sales Retail Extended Service Contracts

Offering extended coverage is just the beginning, however. Here are a few factors to consider when selecting a partner, choosing a product and preparing your business for long term success.

Factors for Consideration

1. Partner/vendor and product selection
Not all companies and products are equal. You will want to make sure you have selected a reputable company offering applicable products, administration and support.

  • Potential partners need a positive reputation in the marine industry. Ask your peers about their experience and ask potential vendors for referrals.
  • Your ideal provider will be primarily focused on marine coverage. If marine coverage is only a small portion of their overall extended coverage portfolio, boats may not be their core competency.
  • Consider organizations with marine experts on staff. Marine professionals will create and maintain applicable marine products, help you sell and accurately decision claims. A robust auto or powersports portfolio, although valuable for some clients, does not always translate into the best marine customer and dealership experience.
  • Consider partners that offer a variety of partnership structures to fit different business needs. As your business grows, higher volumes should open up your dealership to more favorable structures. Establishing an extended warranty portfolio with a partner that cannot evolve with your business can be detrimental in the long term.
  • Carefully read through and discuss all available products with potential providers. Coverage levels, peripheral benefits, pricing and overall administrative performance should align with the brands you carry and the service level your customers expect.  Involve the service department early in the product selection process, to gain their buy-in and input. Their evaluation of coverages will likely reveal any potential product deficiencies and confirm the importance of the service department in the product lifecycle.
  • Ensure your business and service managers have direct contacts they can call on, someone committed to helping them successfully offer the product and process claims.
  • Trust your gut. With coverage terms reaching eight-plus years, this is a long-term partnership. Trusting your partners with your customers’ experience is critical.

2, Organizational adoption
Dealers with maximum long-term success achieve total organizational adoption. Every dealership function has been trained on product and product-performance expectations. Ownership is committed! The sales team has been trained on features and benefits to the consumer and the organization, and the service team has been trained on product function and the claims filing process.

  • Above all, your business manager needs to be committed to product sales. A successful track record of high sales penetration is ideal, second would be a commitment to establishing the same. Business manager compensation structures must support product sales. Some sales professionals will do what they’re asked, most will do what drives the highest compensation. The right structure is critical to driving adoption and sales penetration.
  • The sales team must be proficient in the warranty coverage benefits for the customer and warranty sales to the business. Successful sales team adoption is a critical conduit to the business office.
  • Your service team needs to know all features and benefits of the warranty products being sold to thrive. Your service team will spearhead product use and customer experience, make sure they are well trained. They need a clear expectation of:
    • What coverage will do.
    • What coverage will not do.
    • The claims filing process.
    • Who to contact with questions.

3. Proven Processes/Best Practice
Great partners, products and training won’t drive maximum success unless the right processes are in place and followed.

  • Have your sales team provide the customer with a high-level overview and endorsement of your business office. A warm turnover for EVERY SINGLE customer is required for high sales penetration and to reduce legal risk due to discrimination. Get your sales manager and business manager in lockstep on how the sales team soft sells the business office and the turnover process.
  • Equip your business manager with resources for every credit profile and personal financial position. Include features and benefits for different ownership cycles and watercraft applications in their presentation. Identify common business risk scenarios and implement correct processes and mitigations.
  • To enhance customer experience, the service department needs to:
    • Speak of extended coverage in a positive manner and advocate for the customer with the warranty administrator.
    • Quickly and efficiently work with the administrator to resolve claims and/or customer inquiries.

As marine industry veterans and professionals, we understand the peaks and valleys of boat ownership. Knowing common pain points, and proactively offering products and services to solve for potential issues, can dramatically improve our customers’ ownership experience and drive dealership revenue. Happy customers buy more boats and refer their friends and family!

Adding Value to Your Sales Retail Extended Service Contracts
Jason Cochran

About the Author:
Jason Cochran, Vice President of Global Product Protection, is focused on extended service contract and limited warranty products and administration for marine dealers and manufacturers. With more than 16 years of experience in financial products and services in the marine industry, serving some of the largest entities in the industry, Jason brings a wealth of knowledge and experience to the retail and limited warranty conversation.

Over his 27-year career in the recreational marine industry, his roles have included: master technician, retail sales, customer service, claims manager, product manager, sales manager and general manager/director.

He lives in Northern Illinois with his wife, two boys and Vesta, their golden retriever. Outside of work, he enjoys family time, volunteering at the local American Legion and exploring all things outdoors — boating, fishing, hunting, land management and powersports.

Year-Round Strategies for Marine Dealership Financial Planning

• To help build resilience in the face of unpredictability, marine dealership owners can consider adopting adaptive forecasting and flexible planning.
Year-Round Strategies for Marine Dealership Financial Planning
Victor Rivera

By Victor Rivera, Chief Sales Officer, Huntington Distribution Finance†

Financial planning and budgeting are often viewed as annual exercises for marine dealership owners – a start-of-year activity that carries throughout the year. However, in the face of shifting economic and market conditions, modern dealership financial management calls for a more agile approach.

This article highlights strategies our team has seen dealerships using to enhance financial planning, ensure accurate financial data and maintain flexibility in responding to customer and market needs.

Use Market Analysis to Help Build Your Strategy
Effective financial planning often hinges on a deep understanding of market dynamics. Dealerships can start by analyzing historical sales data and using it to forecast future trends that could impact inventory, sales strategies and more.

Five key areas for market analysis include:

  1. State of the Industry: Monitor industry reports, economic forecasts and indicators such as Personal Consumption Expenditures (PCE).
  2. Competitor Actions: Keep tabs on competitors’ promotions, marketing strategies and inventory decisions to identify your dealership’s unique value within the market.
  3. Market Gaps: Stay alert to new opportunities, such as offering electric-powered boats to environmentally conscious buyers.
  4. Customer Preferences: Regularly analyze market registration reports, consumer confidence indexes and expenditure surveys to ensure your dealership is meeting shifting demands.
  5. Industry Challenges: How well do you know the marine industry? Dealerships that can identify and understand the pain points of customers and competitors can often better position themselves.

Market analysis should be an ongoing process. Embedding this research into regular financial planning has helped dealerships more effectively respond to shifts in consumer demand and broader economic conditions. With a solid market strategy in place, the next step is to ensure financial statements accurately reflect your dealership’s true performance.

Prioritize Accurate Financial Records
Financial statements set the foundation for effective decision making, so prioritizing their accuracy makes a difference. Implementing meticulous verification processes has allowed dealerships to avoid costly issues that stem from errors or inconsistencies in financial data.

Monthly or quarterly auditing combined with enhanced internal controls can help keep financial records accurate and complete. Investing in advanced financial software or other similar technology can further streamline processes to reduce manual data entry and automating reconciliation.

If your dealership’s current internal controls are lacking, conduct a thorough review of your financial procedures to identify problem areas needing improvement. Many dealerships have found hiring financial specialists or upgrading existing systems to be helpful with this process.

Focus on Cash Flow and Inventory Needs for Budget Refinement
Lenders assessing dealerships consider many factors beyond statement trends. These entities determine the health of the business by reviewing:

  • Cash flow leverage
  • EBITDA
  • Gross margin
  • Inventory turnover
  • Inventory age

Dealerships paying attention to these areas while refining their budgets can more easily address concerns earlier in the process.

For inventory management, estimating future needs based on historic sales and anticipated market shifts helps prevent overstocking or shortages. Here’s where the market analysis step comes into play. Identifying slow-moving units or popular products can help dealership owners shift strategies on which items to promote or discount to keep stock moving.

Cash flow needs should also be an important aspect of financial planning. With recent shifts in consumer spending and price increases it has become equally important to ensure budgets account for maintaining operations when busy seasons are slower than normal.

Embrace Adaptive Forecasting and Financial Planning
Static financial planning can leave dealerships vulnerable to unforeseen changes in the market, so don’t view it as a one-and-done task. Adopting a more dynamic financial planning process allows you to be more flexible and quickly adapt to changing conditions.

Adaptive forecasting relies on continuous scenario planning and market research. If initial forecasts don’t align with reality, having a more flexible plan makes it easier to pivot. Regularly reviewing actual financial data alongside projections has helped dealerships catch discrepancies early and make adjustments.

The first step in implementing adaptive forecasting is to regularly revisit your financial assumptions. Again, this should not be a once-a-year activity. Establish a process for continuously tracking performance against those assumptions to build a framework that allows for quick changes.

While dynamic financial planning can enhance your dealership’s agility, it’s also important to prepare for unexpected disruptions that could challenge your dealership’s financial stability.

Planning for Uncertainty
Economic volatility, changing customer spending habits, supply chain disruption and rate increases all impact sales projections and make it difficult to plan ahead. Making contingency planning a central part of your financial strategy could help build resilience in the face of these uncertainties.  

Start by identifying areas where costs can be quickly adjusted if necessary. For example, review non-essential expenses and consider what could be deferred or reduced in an emergency. Maintaining a reserve of funds for unexpectedly slow seasons or economic shifts is also important. Be sure to establish this ahead of a crisis. Having immediate access to an “emergency fund” is essential to maintaining operations and covering expenses during periods when cash might not be available.  

Developing financial scenarios based on potential challenges, such as prolonged downturn in sales, can also help with contingency planning. Outlining different operational strategies for these scenarios can help dealerships pivot swiftly.

Resilient and Adaptable Financial Planning
The marine industry’s ever-changing landscape requires dealerships to be flexible in their approach to financial planning. Learn more about how Huntington Distribution Finance, an MRAA Education Champion, can support your efforts by connecting with our team. 

† Huntington Distribution Finance means either Huntington Distribution Finance, Inc. in the United States or Huntington Commercial Finance Canada, Inc. in Canada, as applicable. Huntington Distribution Finance, Inc. Is a separate legal entity which operates as a subsidiary of Huntington National Bank (HNB).

Disclosures
The information provided in this document is intended solely for general informational purposes and is provided with the understanding that neither Huntington, its affiliates nor any other party is engaging in rendering financial, legal, technical or other professional advice or services, or endorsing any product or service. Any use of this information should be done only in consultation with a qualified and licensed professional who can take into account all relevant factors and desired outcomes in the context of the facts surrounding your particular circumstances. The information in this document was developed with reasonable care and attention. However, it is possible that some of the information is incomplete, incorrect, or inapplicable to particular circumstances or conditions.
NEITHER HUNTINGTON NOR ITS AFFILIATES SHALL HAVE LIABILITY FOR ANY DAMAGES, LOSSES, COSTS OR EXPENSES (DIRECT, CONSEQUENTIAL, SPECIAL, INDIRECT OR OTHERWISE) RESULTING FROM USING, RELYING ON OR ACTING UPON INFORMATION IN THIS DOCUMENT EVEN IF HUNTINGTON AND/OR ITS AFFILIATES HAVE BEEN ADVISED OF OR FORESEEN THE POSSIBILITY OF SUCH DAMAGES, LOSSES, COSTS OR EXPENSES.
Lending and leasing products and services, as well as certain other banking products and services, may require credit application approval.
Third-party product, service and business names are trademarks/service marks of their respective owners.

Drive Up Your Service Revenue in the Coming Year

[Editor’s note: This is Part 2 of the two-part blog exploring more strategies to improve your service department from Bernie DeGraw, MRAA Senior Education Developer]

In part one of this special blog series on boosting service revenue, I shared three things to do now, or as soon as possible, to help your dealership. In this second blog, I’ll share more tips to help improve your service department in the coming year.

Step 1
Again, let’s start with a topic for service backed up by the numbers. This one goes into improving for the year to give you the time to address it in small, less time-consuming pieces. The Service Management Special Report gave us solid information on some items that helped service and dramatically increased gross profit margin. The standout tactic was having a service process map, in place, in use, up to date and shared with the team.

The numbers show that those having a process map developed and working for them in service had an 18% higher gross profit margin than those that did not have a process map. What would an almost 20% higher gross profit margin mean to the bottom line of your service department and your dealership as a whole? Additionally, those dealerships had a peak season efficiency 8% higher than those without the map in place.

So, what do you do about a process map? If you have one, is it working? Does it need to be reviewed? Much like a machine that needs regular maintenance, your process maps need to be re-evaluated to ensure things are working exactly as you expect. Wear and tear leads to a breakdown in the process, which, in turn, will get your attention. That’s typically in an unpleasant and unprofitable way.

If you don’t have one, we have a link to one developed by Aimie, our Artificial Intelligence for Marine Industry Education, at the end of the blog.

Also, the Service Management Certification Program has an entire course on the process map, its development and refinement. Taking that class as a service manager will get your project for the coming year off to a fantastic start.

Step 2
As a former general manager and current dealership co-owner, I know that there were times when I felt like I was the hub of the dealership for our customers. At times, that was a good feeling and sometimes it was unpleasant. Honestly, looking back with more wisdom has shown me that feeling wasn’t accurate. The truth is that your service advisor spends the most time with customers over the long haul.

A service advisor ends up being the salesperson who sells the second and third boat and beyond. They deliver bad news AND good news. They learn all about your customers. They hear the stories of the wind, the waves, the storm, the sun, the sunburns, the tubing fun and so much more. On an hourly, weekly, monthly and seasonal basis, they make boating better for your customers. They also  enhance the working experience for the dealership team as a whole, including salespeople, technicians, yard personnel and you leaders.

So, does your service advisor get enough support for their role? What have you done for your service advisor lately? When is that last time you heard the bad news they had to share? How about the last time they got to share great news with a customer? 

Starting now and over the next year, you need to give your service advisor some tools to make their work life easier and better for the entire dealership? 

  • Do you have a texting platform that the service department and especially the service advisor can use? If not, get one.
    • According to localproject.net, 81% of Americans text regularly.
    • According to simpletexting.com, 78% of consumers say that checking, sending and answering text messages is the activity they do most on their smartphone.
    • According to Lead Inferno, across all age groups, text messaging is the preferred way to communicate with business.
    • You say, “We can text on our phones and get those same results and statistics mentioned above.” That may be correct but, consider this:
      • If your employees text business customers on their phones, who owns the message? If something goes wrong or that employee leaves the business and they texted from their personal phone, you won’t have the record. Many texting platforms allow the employee to text from their own phone as well as the business computer. The text will always appear to come from the business and will on most platforms be maintained as a communication record for you to retrieve if needed.
      • Most texting platforms will go beyond the simple text message and allow the advisor to send photos, video and even bill via secured text.
  • Help your advisor access and use other tools of their own to help them upsell parts and service. For example:
    • Have your technicians find a worn bellows and a cracked one. When a customer comes in the advisor can show them why they should be inspected and explain with the cracked one how quickly water can come in and fill their boat.
    • Work with your advisor to have the service technicians get photos or video of difficult service projects. This lets the advisor show the customer what happened and will happen in servicing their boat.
    • Give your service advisor a chance to learn more about the boats and the engines you are selling. They need to know what the boats are like, what is new, what is different and even what is missing on the new and used boats sold by your sales department.
    • How do you truly expect your advisor to advise your boat-buying customers if they don’t have a chance to truly understand the boat that was purchased. Yes, all boats are the same — wait, what?! No, the advisor needs to know what is different to sell what makes the customers boating experience better, rather than making a generalized rough guess.
    • Give them a chance to explore the showroom. Let them sit on, walk through and dig into the boats you stock.
    • Give them a chance to get out on a shakedown cruise, a delivery ride or a demo or rental unit.

The MRAA is coming out with a Service Advisor Certification Program in the Fall. This program will give your advisor a truly in-depth experience to look at their practices and behaviors. This is not a sales pitch, but truly an opportunity to give your advisor, the person(s) who is likely the most important piece of customer satisfaction and selling the next boat to your customers an opportunity to focus and improve. Where else can you give your advisor such a perfect opportunity to help the entire dealership? 

The program gives them focused and deliberate opportunities to implement what they learn. It is not just a course to take and check off a list. Instead, each step of the way they are given tools and actions to take to put to work in their role and in the dealership. Look for the Service Advisor Certification Program coming soon.

Step 3
This last recommendation takes four to five great days and will set the stage for you and your service department and your entire dealership for the whole year to come. You need to start now and really go in depth in December. Then put it all into action over the following months.

MRAA reveals Dealer Week 2024 Theme

Here’s a short true story. I had never been to Dealer Week, MRAA annual conference and expo. As a leader and a manager, I had always believed I was giving my team opportunities for growth. I even had some time where I went out and got training. But, I learned that nothing compares to Dealer Week in terms of education for the entire dealership team.

This past December was the biggest and best and most highly rated educational conference yet. It is literally rated as a world-class event. If you want the best education, for service and parts, for sales, for marketing, for F&I and for you as a leader, you need to attend Dealer Week Dec. 8-11, in Orlando, Fla.

Moreover, from 9 a.m. to 3:30 p.m. on December 8, the MRAA and Valerie Ziebron will be presenting a Service Management Special Event. We will take the numbers from the Service Management Special Report and combine that with additional skills and information connected with the Service Management Certification and the Service Advisor Certification to build an incredible and powerful day of focused service-department opportunities and learning.

The Service 3-Step for Future Success
Elevating your service processes is key to boosting revenue and strengthening your business as we head into the new year. It starts with mapping out your service operations to pinpoint where you can improve and ultimately enhance your gross profit margin. Next, give your service advisors the tools they need to succeed — whether it’s a modern texting platform, visual aids, or achieving Service Advisor Certification. These resources empower your team to communicate better and deliver top-notch service, which customers will notice.

And don’t forget, one of the best investments you can make in your dealership’s future is education. Make plans to attend Dealer Week on December 8-10, 2024, where your entire team can soak up world-class insights and skills. By focusing on these areas, you’ll not only improve your service processes but also set your business up for long-term success. So, let’s make this the year you take your service game to the next level!

Next Steps:

Drive Up Your Service Revenue Now

As dealers, we have all heard a lot this year about diversifying our revenue and increasing our income streams. We hear a broad range of ideas on what to sell and how, how to market and when, and where to get financing and floor plans with different rates. During these unusual times a main area of focus is to improve service. Sales are down, so improve service. And for each of us all those things, from the ideas to the input, come with their own challenges.

For example, if we are small, how do we find the time to improve service? If we are large, how do we find the time to improve service? Another thing to contemplate is our service numbers. We know the sales numbers are clearer — inventory is up, sales are down, interest rates are up, while financing numbers show fewer people want to do it. But what are the numbers in service? Where are they? What are they? How do I use them?  

So with all of that in mind, I wanted to share a few items to consider for service. Reflections with numbers attached to add to their credibility. You want to make a difference in your service department. I have three things to help now. In part two of this blog series, I’ll share with you three things to help in the coming year. They may be random but do seem reasonable in terms of time and effort.

Step 1
Let’s start here with a data-driven insight. The MRAA’s Service Management Special Report showed that dealerships that use written and shared job descriptions have a 14% higher gross profit margin than those that do not have them written and shared.

Drive Up Your Service Revenue Now

First, you don’t have to start from scratch. We have job descriptions available at MRAA.com for most service-related positions. If you already have job descriptions, take the time to ensure that they are up to date. Otherwise download them from MRAA and adjust them to fit your specific service positions.

Second, remember, the special report said written and SHARED! They are only effective when shared. Sharing means to make them available for everyone on your service team and at your dealership. You need your team to understand each other’s role, as well as their own, in order to gain some of the percentage points in gross profit margin.

Third, it’s crucial that all your shared job descriptions make sense to the service team. They are likely to have some changes to suggest for themselves and their peers. They may discover key roles and responsibilities for their coworkers and also suggest areas for improvement in teamwork.

Step 2
Upsell for the offseason. Sounds simple right? I know from experience that sometimes service managers, or advisors will see this as an added stress heading into the busy crunch of getting boats and customers ready for the end of the season and in many locations winterized and stored away.

But, it actually is a fairly simple two-step process I call “ask and offer.” Every customer must be asked if they need anything improved or repaired on their boat during the offseason. And each customer should be offered some service specific to their boat. This generates a list that is kept for the work to be done once the peak season is over and the slower season rolls in.

Asking is as simple as having the question on a storage form. Here’s a sample ask: “Are there any concerns you have with your boat that we can address so your boat is ready for fun in the sun once winter ends?”  It is a more powerful “ask” when done in person or via text, as a response is far more likely. 

Offering can be extensive with a long list of options you can provide to make boating better for your customers or even better, directly targeted at the specific customer and their boat.

For example: Have a go-to list of offers. Here is a short list:

  • Replace Impeller
  • Bellows Inspection/Service
  • Prop Shaft Seal Inspection/Tighten/Replacement
  • Blower and Vent Line Inspection/Service
  • Upgrade Lighting, Underwater, Courtesy, Docking, Spotlight
  • Shift and Throttle Control System Inspection/Service

A targeted idea may work better for you if your advisor really knows your customers and their boats:

  • They may need a new name on the back of their boat. Have your sign guy come and make them a new one over the winter to install in the spring.
  • They may complain about their stereo, offer upgrades in amp, speakers etc.
  • Perhaps the customer worries about water in their bilge. You could offer a check of all thru hull fittings to make sure there are no leaks, and you could offer a check of moisture content and check engine mounts and stringers.
  • The list of customized offers is almost endless if your advisor knows their customers and their boats.

Step 3
This third step is currently the simplest step. Get your Service Manager Certified! The MRAA and ABYC teamed up to create the Service Management Certification program, which will launch again soon. The course provides your service manager with an opportunity to learn, improve their skills, ease stress and to make the entire dealership more money.

The first class had rave reviews from program participants for its structure and what they were able to implement as a result of the course. Implementation is the difference in this program and other MRAA certifications. The MRAA wants participants to take a course, gain best practices for success and use the program takeaways to implement proactive initiatives in service.

Strengthen your service department with Service Management Certification from MRAA/ABYC

The Service Management Certification program has a window of 90 days for the participants to take the course. It won’t take the full 90 days, but that timeframe provides a chance to implement the key steps as they go, allowing them to stop, implement and then come back. It also has a live, proctored exam at the end, so you don’t ever feel like you have to look over your employee’s shoulder to make sure they are truly learning. The exam, the proctor and their implementation of learning will assure you that your investment in the program paid off.

Service Department To-Dos
Dialing in your service processes is crucial for enriching revenue, empowering your team, and helping your business outperform the competition. Start by refining job descriptions to align every role with the goal of improving your gross profit margin. Encourage your team to embrace upselling with the “Ask and Offer” approach during every customer interaction. Finally, invest in strong leadership by getting your Service Manager certified through the Service Manager Certification Program. By focusing on these areas, you’ll create a service operation that consistently exceeds your business goals.

Next Steps