Slow economy reveals importance of service

Never has the technical service aspect of our industry proven to be so valuable until the recent economic downturn. With a slow economy depressing boat sales by nearly 30 percent, the need for quality service has never been greater. Unfortunately, poor service has plagued our industry for quite some time, and the industry has not taken the necessary action to improve these deficiencies in the past.

When the economy was strong and consumers were setting record sales with the purchase of new boats, the industry focused on sales without considering that quality service is just as important, if not more important in the long run. It is service that keeps the customer on the water.

Poor quality service is catching up to us

With the slow economy, consumers are not rushing into the showroom to buy new boats, as they have in the past, and many dealerships are hurting. Now we realize that the service community in our industry provides an extremely vital function — keeping our current customers in boating.

The service department not only has the responsibility of maintaining the consumer's investment and meeting their needs, but the technician determines, in most cases, whether or not the consumer remains a boating enthusiast or leaves the industry all together to pursue other recreational activities. In worst-case scenarios, poor service will be the determining factor that drives the consumer on to other recreational industries.

The marine industry can no longer continue to concentrate on boat sales without an equal effort given to service. The marine dealership that continues to neglect service is short sighted and not only hinders his own profitability but that of the entire industry as well.

Money can be made in the service department

For more than 20 years, my career in the marine industry has proven to me that service departments can and should be profitable.

Marine dealerships that say they can't make money in service don't realize the valuable tool they are missing.

First of all, if your service department is set up correctly, you can make money in service. Secondly, a properly run service department gives the dealership the opportunity of establishing a long-lasting relationship with its customer. By having the customer return to your business on a regular basis for all his or her service needs, it re-enforces the value of your business to the customer. Every marine dealership should want their customer coming back to his/her business for every boat related item that consumer should ever want.

This strong business/consumer relationship while the consumer owns the vessel, strongly increases the chance that the consumer will come back when he or she is ready to buy their next boat.

Every dealership in the marine industry is "missing the boat" if it doesn't view service as an opportunity and NOT an obligation. Viewing service as an opportunity is how service-only businesses show robust profits and stay in business.

Quoting service work on shop rate is a dead-end street

One practice that causes the marine service department problems is quoting the service department's hourly rate as a means of competing for service work. This practice has been performed in the marine industry for many years, but what does it really mean? How does quoting US$50 per hour, US$75 per hour or even US$125 per hour justify whether or not the consumer should bring the boat in for service? It doesn't!

The uninformed consumer, in most cases, is the one who is doing himself a disservice by shopping service department shop rates in order to determine whether he will bring the boat in for service. Dealerships should stop this dead-end tactic, which only continues to give creditability to this useless practice. It's time marine dealerships help educate the boating public. The value of a businesses service department cannot be measured by the amount of money it charges for labor. When a customer asks for an hourly service quote, it's an opportunity to explain to the customer why your shop is the most qualified to do the work at hand. Once the consumer is educated and convinced that your service department is the most qualified business to do service on his vessel, the hourly rate issue is finally put to rest.

By convincing the customer that your technicians have the proper tools and expertise to perform the work required, your standard hourly rate will justify itself. At that point, it doesn't matter what the competition has quoted for service. A competitor can quote anything he wants. How long will it take him to do the work? Does he have the proper experience for this job? Does he have the right tools on hand to do the work properly?

As long as your customer realizes that your shop will protect his investment for a reasonable price, he will continue to bring his boat into your facility for service. If your labor rate happens to be US$10 an hour higher than your competition, a customer will gladly pay that extra US$10, or even US$20, on typical service for the peace of mind you have given him.

Importance of routine maintenance

Industry surveys show that most consumers don't bring their boats in for routine maintenance because it is viewed as a hassle and inconvenient. Dealerships should make a concentrated effort to work routine maintenance into their work schedule with the least amount of downtime as possible. This practice will not only solidify the consumer/business relationship, but it will help eliminate one of the biggest reasons boaters become dissatisfied with boating. By doing so, you will let your dealership stand out against the competition and help separate itself from the rest of the pack. Once again, look at service as an opportunity and not an obligation.

Service is the marine industry's future profit center

Many dealerships view their new boat sales as the company's true profit center. However, if the service department is managed properly, it not only becomes a powerful profit center, it also serves as a conduit to supply customers to the new boat sales department. As I said earlier, if your customers continue to use your business as their "one stop" for all their boating needs, your dealership is the place they will come when it's time to purchase that new boat.

This practice not only bodes well for your business, but it also establishes and maintains deep roots of true boating enthusiasm. Since the downturn in the economy, and the 9/11 attack, it is evident that the service department can help solidify our industry when boats aren't selling. A solid service commitment, industry-wide, is necessary in order to stabilize our industry. This is the only way the industry will grow.

Once we can maintain our current customer base, then bringing new consumers to our industry will result in growth, something our industry has been lacking for many years. Let's take heed of the industry's survey that shows the No. 1 reason consumers leave the marine industry is due to poor or incompetent service. Let's make a concentrated effort to stop this problem, by focusing on how important this issue is and finding ways to work together as an industry to provide excellent technical service.

Joseph J. De Marco

Vice President

AMTECH