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The game is still customer retention

Something curious is happening at our boat shows. Dealers are reporting two unexpected results in addition to better than anticipated attendance. They are: (1) small boats are drawing more interest and selling better than large boats, and (2) it appears dealers are talking to more new people than old prospects and customers. I don’t think we have any solid explanation for either, at least not yet. But the idea that small boats are seeing notable activity is very encouraging. For too long, small boats have seemed to ride the back seat to large boats, at least as far as show activity was concerned. Certainly interest in small boats is a positive indicator for the future.

 Likewise, getting to talk to new prospects (reported by some dealers to be as high as 60 percent of their leads) is very encouraging. Small boats, new faces . . . it’s the kind of good news we’re looking for. So, let me go out on a limb here for a moment and ask: could it be we are actually seeing some results of the Discover Boating campaign?

After all, we did spend more than $15 million to run excellent ads across America and the campaign, while temporarily dry docked now, hasn’t been curtailed for very long. So, it’s very possible we are seeing a boost from it now.

All that said, however, the bottom line goal for ’09 has not changed – it is still the retention of current customers. This is not only true for boat sales (current customers are still the most likely to buy again) but for service and repair work, accessory sales, dockage, storage and so on. Moreover, it’s never been more important to accurately determine what will please the customers.

It shouldn’t surprise you that your customers are instinctively self-centered. Fact is, we all are. I mean, everyone has their own frame of reference. Customers, for example, care intensely about their own needs and desires but don’t care much about your company’s concerns.

Now, mix in the fact that all your employees also have their individual frames of reference. That’s when things can get sticky. Decisions made only inside the company, by only the managers and staff, will most likely reflect their frames of reference, not those of the customers. I believe Jack Welch, former GE Chairman said it: “When you think you know more than your customers, you better get over it!”

The world, then, isn’t what managers or staff think it is, but what our customers say it is. So, if we want to retain them, we need their input to build our services and programs around them. Every dealer and marina should have a formal, consistent customer feed back system in place where customers can express their preferences, make suggestions and answer your inquiries. Email provides the easiest method of surveying customer opinions. A customer focus group reception/meeting is another. A customer hot line for suggestions could work. A staff “customer advocate” who visits with customers is another idea.

Whatever the method, retaining customers means finding out what they want and giving it to them. Has it ever been more critical to your business than it is today?

Comments

4 comments on “The game is still customer retention

  1. RedBW

    Norm, you get it, but most dealers don’t. It does cost more to go out and look for new customers than it does to work on the ones you have. And you hit the nail on the head when you said attracting and retaining customers involves finding out what the customers want. I know what they want. I have well over 1,000 in my group and we have a bulletin board where we talk about what we want every day. I have a hosted chat session twice a week where we talk about what we want. Do you think I can find a dealer who wants to listen? No, they all think they know more about what we want than we do. I can tell you TWO things that customers want. And I will tell you what they are. When they buy a boat, they like to hang out and socialize with others who have the same size or brand of boat. And I can tell you a dozen ways this can help a dealer with his business. But I won’t go into it here. The 2nd thing customers want is for their dealer to be involved in their social activities AFTER the sale. And I don’t care if they are trailerable boats or ones that are larger. The cost is low and the reward are great. I am in the business of putting owners and wannabees together with each other. . I could put them together with a dealer or broker if any were interested in what I am doing. My ideas work no matter how small the dealer is or where in the USA they are located. And it doesn’t matter what brand or type of boat or jet ski the dealer is selling. And if you don’t get involved with your customers after tha sale, they may not come back. They just might buy off your competitor next time, especially if he has a customer oriented program and you don’t.

  2. LARRY RODRIGUEZ

    IT SHOULDN’T SURPRISE US, AFTER ALL THE BABY BOOMERS ARE GETTING OLD, AND IT WAS A MATTER OF TIME BEFORE THE NEW GENERATION WOULD REPLACE THEM, THEY’RE SLOWLY BUT SURE INHERITING WHAT WE OLD FARTS ARE LEAVING BEHIND, INCLUDING FINDING A NEW LOVE FOR THE FUN AND THE ADVENTURE OF BOATING, JUST LIKE THOSE OF US AGING BABY BOOMERS DID. YES!, SOME OF US ARE DIE-HARDS, AND STILL VERY MUCH IN LOVE WITH THE SEA, BUT LET’S FACE MANY ARE ALSO……GONE.
    THIS IS NOT TO TAKE AWAY FROM THE HARD WORK OF MANY & THE EFFORT PLUS MONEY SPENT IN THE BOATING AD CAMPAIGN, BUT LET’S FACE A HARD REALITY, IT WAS INEVITABLE!
    IT EXPLAINS WHY SMALL BOATING, ( THE CHEAPEST WAY OF ENTERING THE SPORT), IS ALSO BECOMING POPULAR AGAIN.
    I CONFESS AS MANY OF US WILL AGREE, MY FIRST BOAT WAS BUT A MERE 13 FOOTER, AND WHAT WONDERFUL MEMORIES I WAS LEFT WITH.
    I’VE BEEN HOOKED FOR LIFE, ISN’T THAT THE MAIN REASON MANY OF US ARE STILL IN THIS INDUSTRY AND SHOWING UP FOR WORK/FUN EACH DAY?

  3. arch

    All of you are correct, TO AN EXTENT.
    I do think you are giving the customer too much credit here. There is no doubt that MOST of them would buy from a dealer with NO SERVICE, or from a retailer like COSTCO if it meant saving $1000.
    As a matter of fact, studies support this theory.
    I think the social events after the sale and stuff like that is fun and does good, no doubt. But you can have a customer that LOVES your dealership and participates in all thise events, and has even bought multiple boats from you. But if the dealership down the road sells the same line of boats and it’s $1000 less, most will buy from them, not you.
    Customer retention is extremely important, but don’t kid yourself. A customer would buy from the devil if it meant saving some money.

    I can’t help but laught listening to dealership mgrs and owners bragging about all the great stuff they do and how well it works. Then 2 years later we read about them going out of business, or getting arrested for fraud. And then there are the dealers that literally do everything right, but they don’t esperience the same success as other dealers that do the same thing and sell the same product.
    Some of a dealers success certainly stems from hard work, mgmt, product, etc. But some of it also is due to INTANGIBLES.
    I’ve just seen so many attribute their success to themselves, and their success gives them a platform to tell others about it. Then they get into all this crazy marketing and stuff the do, when that stuff has LITTLE or NOTHING to do with it. It has to do with economic cycles, dealer location, product line, and just the timing of it all.
    1/2 the dealers I’ve seen lecturing other dealers or written up in magazines for having such a GREAT and SUCCESSFUL dealership, end up going out of business, falling out of favor, or mgmt quitting or getting fired.
    I just don’t think success has as much to do with all that fringe stuff. I thing 80-90% of it is basic business stuff. All the other new ideas, crazy marketing, and all that is just a bunch of nonsense.
    Anybody that knows WHEN and WHERE to start a dealership, WHAT good products to sell, WHO to hire, will succeed and he doesn’t need any advice or input from other so called “TOP 20 DEALERS” or dealer councils.
    As a matter of fact, I’ve seen people come into the business with NO dealership background or training, and many with no industry experience, and they come in and quickly move into top position, over the dealers that have been around forever and supposedly have amazing business practices that makes them very successful.

  4. RedBW

    I see in the future, maybe 10 years down the road, that people will look at boats at the boat show and then go buy them off the Internet. The number of dealers will be way down. Maybe only 50% of the number of dealers that exists today.

    First time buyers would be more inclined to buy from a dealer. But those who have had boats in the past, and don’t need any hand holding, so they will buy it off the Internet and have it shipped to him or go pick it up somewhere themselves. They will do this to save $500.

    At the very least, they will pick out the boat and the options they want and then find out what dealer in the US or Canada has it and then go to that dealer to pick it up. They will drive 500 to 1000 miles to save a few $$. Never to return again for service.

    You can buy a car this way on the Internet so why not a boat?

    It will happen someday.

    I see little that dealers can do to stop the trend.

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