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Good results for public boating companies to close out 2015

The final quarter of 2015 proved to be a good one for the publicly traded companies in the industry, with Brunswick, MarineMax, Malibu, Marine Products and MasterCraft all showing growth.

Several of the companies reported challenges in Canada and overseas, but that was offset by strong numbers for the U.S. market.

Brunswick reports 7 percent sales increase for 2015

Brunswick Corp. reported higher sales and earnings for the year and the fourth quarter.

Sales for the marine portion of Brunswick’s business were up 6 percent for the quarter and 8 percent for the year.

“Our full-year revenues increased by 7 percent; 11 percent on a constant currency basis,” said chairman and CEO Dusty McCoy. “Our top line reflected strong growth rates in fiberglass sterndrive/inboard and outboard boats, outboard engines and marine parts and accessories.”

Sales in Brunswick’s engine group were up 6 percent in 2015.

Sales in Brunswick’s engine group were up 6 percent in 2015.

Company executives expressed optimism about 2016 as well.

Overall, Brunswick is forecasting revenue growth of 9 to 11 percent in 2016, with mid- to high-single-digit growth in both engine and boat sales.

Sales for the marine engine segment (which includes parts and accessories) were up 6 percent for the year at $2.3 billion and up 2 percent for the quarter to $474.7 million. The boat group had sales of $1.27 billion for the year, up 12 percent from 2014, and $336 million for the quarter, up 14 percent.

Outboard sales continue to grow, especially in the saltwater, commercial and repower markets, as new engines introduced last year are driving market share gains. Sterndrive sales continue to be “challenged,” although Mercury’s market share is stable, Schwabero added.

Sales up 33.2 percent for Chaparral, Robalo parent

Marine Products Corp., manufacturer of Chaparral and Robalo, grew sales, profits and income for the fourth quarter of 2015 on the strength of outboard sales, the company reported.

For the quarter ended December 31, 2015, Marine Products generated net sales of $49,881,000, a 33.2 percent increase over the $37,441,000 for the same period in 2014.

The company credited higher unit sales of Robalo outboard sport fishing boats and Chaparral Suncoast outboard boats during the quarter.

“The 2015 retail selling season was strong, and the dealer and customer reception of many of our new product offerings has been positive,” said Richard A. Hubbell, Marine Products’s president and CEO. “Unit sales growth among our Robalo sport fishing boats continues to be strong, particularly in sales of our new Robalo 160 models.  Chaparral SunCoast outboard sales continued to grow as well and we continue to be optimistic about the SunCoast models that we introduced for the 2016 model year.”

Gross profit for the quarter was $11,117,000, or 22.3 percent of net sales, a 49.5 percent increase compared to gross profit of $7,434,000, or 19.9 percent of net sales, a year earlier. Higher production volumes, which led to improved manufacturing efficiencies, helped boost those numbers, the company said.

“Early results of attendance and sales from the 2016 boat show season are favorable, and our order backlog is higher than at this time last year,” Hubbell said.

MarineMax reports higher revenue, sales for Q1

MarineMax, Inc. reported higher sales and revenue results for its first quarter of fiscal 2016 ended December 31, 2015.

Revenue grew more than 7 percent to $169.5 million for the quarter ended December 31, from $158.1 million for the comparable quarter last year. Same-store sales increased 8 percent, building upon the 45 percent same-store sales growth in the same period last year.

“The growing interest in new boats from our manufacturing partners and our focus on enhancing the boating experience is resonating with our customers, as evidenced by our strong results to start fiscal 2016, which exceeded the extraordinary growth we produced in the same quarter last year,” said chairman, president and CEO Bill McGill.

Last year’s fiscal first quarter (the final quarter of 2014 calendar year) was the first December quarter to be profitable for MarineMax in several years, said McGill during an earnings call discussing the results.

“We challenged our team … and they delivered,” he said. “Many categories showed increases for the month of December. We believe our growth outpaced that of the industry, resulting in market share gains.”

MarineMax increased new unit sales by about 20 percent, besting the industry average.

Outboard-powered boats were the key to growth for Marine Products in 2015.

Outboard-powered boats were the key to growth for Marine Products in 2015.

New products from Sea Ray, Boston Whaler, Azimut and others are helping to drive growth.

For the second consecutive year, the company produced a profitable first quarter with net income of $889,000 or $0.04 per diluted share for the quarter ended December 31, 2015, compared to $214,000, or $0.01 per diluted share, for the comparable quarter last year.

“The excitement we generated in the December quarter, has continued into the boat shows that we have participated in since the start of January, which is the beginning of the winter boat show season,” McGill said.

McGill also discussed the recent acquisition of the Bahia Mar Marina in Pensacola. The marina’s large number of wet and dry slips will help improve cash flow, and its on water location will make for a good future home for the company’s currently landlocked Pensacola location, he said. MarineMax has had a Pensacola location for 13 years but will be moving its operations to Bahia Mar Marina.

MarineMax also continues to explore other acquisitions.

“We are in discussion with several larger dealers,” McGill said. “The chances of something happening sooner are greater than it was six months ago or a year ago.”

Malibu sales up 9.1 percent for quarter

Malibu Boats, Inc. announced higher sales and profits for its second quarter of fiscal 2016 ended December 31, 2015.

“Malibu completed another successful quarter, meeting or exceeding our internal financial and operating targets for the eighth straight quarter since our IPO,” said CEO Jack Springer.

Highlights for the second quarter of Fiscal 2016:

• Net sales increased 9.1 percent to $60.5 million compared to the second quarter of fiscal 2015.

• Unit volume increased 2.4 percent to 867 boats, including 81 units from Australia, compared to the second quarter of fiscal 2015.

• Net sales per unit increased 6.5 percent to $69,787 and net sales per unit in the U.S. increased 7.5 percent to $72,526 compared to the second quarter of fiscal 2015.

• Gross profit increased 12.1 percent to $15.9 million and gross margin increased 73 basis points to 26.2 percent compared to the second quarter of fiscal 2015.

• Adjusted EBITDA increased 7.0 percent to $11.2 million from the same period in fiscal 2015.

• Adjusted fully distributed net income at $5.8 million was in line with the second quarter of fiscal 2015 and adjusted fully distributed net income per share increased 15.4 percent to $0.30 over the same period.

MasterCraft reports 12 percent sales increase for quarter

MasterCraft grew sales, income and margin for its fiscal 2016 second quarter, ended December 27, 2015.

“We continue to deliver outstanding top- and bottom-line increases and unit volume growth,” said MasterCraft president and CEO Terry McNew. “These gains are driven by continued demand for performance sport boats across all models, in particular overwhelming demand for our X23, growth in our MasterCraft NXT line of entry-level models and our newly released X26.”

MasterCraft-only net sales for the three months ended December 27, 2015, which exclude the terminated Hydra-Sports manufacturing contract, increased $6.0 million, or 12.2 percent, versus the prior year. The net sales gain was primarily due to a rise in MasterCraft unit volume of 48 units, or 7.4 percent. Net sales per MasterCraft unit grew by 3.9 percent, chiefly stemming from greater adoption of higher-end option packages, new product launches and price increases, the company said. Net sales for the three months ended December 27, 2015, were $55.2 million, up $2.4 million, or 4.5 percent, compared to $52.8 million for the three months ended December 28, 2014.

“Like most marine manufacturers, international headwinds, particularly in Canada, are partially offsetting U.S. results. However, we expect to maintain our sales momentum as MasterCraft continues to drive sustainable, profitable market share gains,” said McNew.

 



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How to build a top-notch sales operation

Today’s customer is a complicated individual. They are more skeptical and less impulsive, and they do more online research before purchasing than ever before. They are interested, but their lives are so busy that they can’t stay focused. They have more money than during the recession, but they aren’t sure if they want to spend it just yet. How do salespeople keep up to close the sale?

Show me the proof

Getting past the skepticism is dependent upon providing proof. There’s a difference between saying your manufacturers are the best and your customer service is top-notch, and providing specific reasons why.

“When people are shopping, they’re looking for the answer to the question ‘What is the best decision I can make?’” said Matt Sellhorst, founder of Boat Dealer Profits. “‘Because we have the best warranty,’ ‘because we have the best service,’ is meaningless, but if you just add a little bit, go another step or two to explain what you mean by that in more specific terms, I think you can overcome that skepticism a lot quicker.”

For instance, the FIVE STAR program at Springline Yacht Sales, LLC is a delivery and training service the dealership provides customers, which is similar to what most dealerships likely do these days, but is formalized and presentable to the customer during the sales process.

“It’s part of easing their fears,” said Rick Dieterich, president of Springline Yacht Sales. “Having the formalized program that we can share with somebody … is a big selling tool right upfront.”

Giving customers an opportunity to demo the boat they want to purchase is a key selling tool for proving just how the boat can benefit a family’s leisure.

Constantly training your team builds value and profit in the sales department.

Constantly training your team builds value and
profit in the sales department.

“We make to make it easy for them to decide on [the boat]. People appreciate when they do that and they see it’s a positive effort from us, and they’re most likely to purchase a boat from us, even if they don’t purchase that boat in particular,” said John Kutuk, co-owner at Marine Connection.

Social proof also helps ease customers’ fears. After all, what our peers have to say often has more impact than what a salesperson claims. (You can read about Sellhorst and social proof in the Boating Industry 2015 Best Ideas White Paper on BoatingIndustry.com.)

Stay on their radar

So you’ve shown them proof, now your prospect wants time to think at home. That prospect is about to get busy and be hard to reach.

The answer to this problem is diligence. One follow-up is likely not enough. If you send an email, the chance of someone seeing it based on open rates is about 20 percent. Even if it is opened, there is a 50 percent chance they will actually read it. That means there is a 10 percent chance that the prospect opens your one email and reads it.

Sellhorst recommends sending 50 “contacts,” which include emails, phone calls, direct mail (depending on the quality of the lead), event invites and more. This will have an impact on that busy customer.

“You can’t be annoying. It can’t be like ‘Are you ready to buy a boat now? Are you ready to buy a boat now? How about now?’ It’s got to be interesting, it’s got to be fun, it’s got to be valuable content,” said Sellhorst. “You’ve got a much better likelihood to cut through the busy-ness of their lives and sell the boating lifestyle.”

When looking at engaging customers during the follow-up, it is important to use personalized content to get their attention. Even through automating the follow-up process, dealers can create messages that appear personal in nature.

Marine Connection uses its customer relationship management (CRM) tool to record the information of every customer that walks through the store. The salesperson notes the customer’s buying timeframe, what they looked at, what activities they want to use the boat for or even if they were “just looking.”

“We have an automated system where the salesperson will, with the click of a button, send them a thank you email that day. That way, the customer will have the salesperson’s information,” said Kutuk.

Springline Yacht Sales utilizes its association resources for training.

Springline Yacht Sales utilizes its association resources for training.

The customers are enrolled in the Marine Connection newsletter program and the dealership watches if they are clicking on and responding to the emails. It also allows Marine Connection to set reminders for the salesperson to call back within the customer’s timeframe.

“Even though these systems are great, we can only close a sale when the customer is actually in the store. The objective is to bring them back to the store,” Kutuk said, “and CRM allows us to facilitate that and allows the salesperson to organize themselves.”

People, not process

Part of what helps keep salespeople energized and able to connect with today’s prospect is constant training. Having the opportunity to build skills and learn new ideas keeps salespeople refreshed and more likely to close the sale.

At Springline Yacht Sales, Dieterich and his team attend as many seminars and conference calls as possible through the associations in which the dealership participates, such as the Yacht Brokers Association of the Americas, Sail America and more.

Association involvement “gives you connection and networking with other industry leaders. The fly-by-night guys and the guys that don’t do things right aren’t at all the conferences and training sessions, and they’re not involved in the industry associations,” said Dieterich. “It gives you an opportunity to talk with them, speak with them and find out ‘how do you handle this situation? How do you do this?’”

DSC_0171No matter what sales training you conduct or processes you implement, Sellhorst said the most successful sales department are those that focus more on the people coming to the showroom.

“Everything they look at is ‘how should this process be different? How can we make it easier for us internally?’ The culture that I think wins every time is a client-focused culture. When you have a client-focused culture, you can answer this question: ‘How can we deliver the best experience for our clients during the shopping process, the delivery process and the ownership stage?’” Sellhorst said. “Once your culture looks at the business that way, then everything else falls into line.”

A “necessary evil”

With the changing attitudes of prospects, are boat shows still a worthy sales tool? The short answer is yes. If you’re looking to meet people “off the street,” so to speak, you need to be at the show.

“It’s the best place to get leads. It’s the best place to display your products. It’s the best place to meet and talk to people. Because of the Internet age, people don’t walk into the showroom anymore. It’s very rare that someone is coming into this office that hasn’t already established a long line of communication with us, via email or telephone,” said Dieterich.

The trick with boat shows is to deconstruct how we see them. In the past, dealerships were closing deals regularly at the show, but that’s not happening anymore. However, it is still an essential method to allow customers to see the product and make the leap to visit the showroom.

“Even though they don’t really come in and do the paperwork at the boat show,” said Kutuk, “we see a lot of customers come back to our showroom or stores, and they usually mention what prompted [them to stop by], and people say the boat show.”

The dealership uses digital displays, comfortable lounge areas and more to create a professional-looking setup that attracts customers in and eventually leads to them visiting the store. Marine Connection won Best Boat Show Strategy for the Boating Industry Top 100 in 2013.

Dieterich agrees that the boat show is all about presentation, but not just the booth. He said the presentation of salespeople is the most important aspect of a dealership’s boat show. That means being “on” for everyone, even if those people don’t look like the typical boat buyer.

“You’ve got to remember that everybody that walks on board that boat is a potential client,” said Dieterich. “You have to be on stage for everybody. I know it’s tough, I know you’ve got to talk to 100 people to find one that really might be interested, but you’ve got to treat all 100 the same until you figure out whether they’re interested or not.”

Dieterich will, as long as there is someone else at the booth, ask salespeople to take an hour break from the booth if they are getting burned out, because he would rather have employees come back refreshed and reenergized than ignore someone who comes in because they “might be just looking.”

“That’s the best thing we can do at the shows, is really pay attention to everybody like they might buy a boat,” said Dieterich. “Don’t sit there and go on Facebook on your iPhone and watch 30 people walk by because you’re tired of talking to people. You can’t do that. You’ve got to maintain that game face and that stage presence.”

Sales aptitude

Building a top-notch sales operation starts with having the right salespeople. Hiring people with a passion for boats is a helpful start, but it does not make one automatically successful in the art of selling boats.

“You can have a great attitude, you can be positive, you can be confident and persistent, but if you just don’t have the aptitude for sales, you’re going to be miserable and you’re not going to be very successful,” said Sellhorst.

Sellhorst encourages managers to ask applicants or salespeople or existing employees to take a sales aptitude test to determine whether or not those individuals are right for the job. This will help find out information you may not be able to glean from the interview process or a “gut feeling.”

Here is a list of several sales aptitude tests you can use:

The Rainmaker Group, Inc. (therainmakergroupinc.com/sales-personality-test)

Asher Strategies (salesaptitudetesting.com/sales-aptitude-test)

PsychTests (testyourself.psychtests.com/testid/2162)

Beacon Worldwide (beaconworldwide.com/sales-knowledge-quiz)

Proof is in the product knowledge

Sellhorst says product knowledge needs to be a top priority in any sales team’s training agenda, as it helps build the proof needed to tackle the obstacles created by today’s customer.

“To get to the factory, to get the three or four key things that you have to talk about on every boat, that should just be second nature to you. You should be able to just peel those off,” said Sellhorst.

He added that product knowledge goes beyond your own brands. Salespeople need to know enough about their competition’s brands to be able to offer proof for why their own brands are better.

“You don’t want to be derogatory to any one brand, but … you’ve got to then know what the competition does that you can take advantage of,” said Sellhorst. “[You should know] ‘OK, I know when I am competing against XYZ manufacturer, here’s how they compare to our top three or four things, and I know I need to point that out.’”

Want more ideas?

Sellhorst is the author of the book “Marine Marketing Strategies” and Head Profits Coach at Boat Dealer Profits. Sellhorst was also the winner of the MDCE Best Ideas Contest, Boating Industry’s Movers and Shakers Bold Moves award, a top producing boat salesman, and a speaker and presenter at the Marine Dealer Conference and Expo.

Sellhorst has written several articles for Boating Industry to help dealers build a top-notch sales operation. From utilizing video to time management, to getting out of a sales rut, dealers will find a wealth of ideas for adding to the bottom line.

In “Are you giving your clients what they really want?” Sellhorst asserts that it is the job of business owners to deliver what the customer really wants, not just what they say they want.

“If you ask most buyers what they want when buying a boat, they’ll say, ‘we want the lowest price.’ But, is that what they really want? Certainly not. If they wanted the lowest price, they would go to Craigslist and buy the cheapest used boat they could find.

“What they truly want is to know they bought the right boat for them without over paying or being taken advantage of by the dealer. They want to make a buying decision with confidence. To know they made a smart choice that they and their friends will recognize as a smart choice.

“If that level of confidence is not present, they default to negotiating price because then, at least they can brag about getting a ‘great deal’ … or, they don’t buy at all. If you agree with that thought process, it begs the question: ‘How can we ensure our prospects have a high level of confidence in their purchase from us?’ …

“The answer is different for each business owner. For some, it leads to a guarantee. For others, it leads to a bold promise. For others, it leads to a change in sales or delivery process. And, for others still it leads to just communicating everything they already do in a more powerful and confidence building manner. Bottom line, the more you reduce the risk from the buyer’s position, the more profitable your business tends to be.”

Find more at BoatingIndustry.com/mattsellhorst.

 



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Boat & yacht market update: Smooth sailing

Savvy agents and brokers can take advantage of carriers' healthy appetites in this market, where low gas prices helped buoy sales of recreational watercraft in 2015.
Savvy agents and brokers can take advantage of carriers’ healthy appetites in this market, where low gas prices helped buoy sales of recreational watercraft in 2015.

As summer approaches, boat owners look forward to spending weekends cruising lakes and waterways. However, this past winter served as a reminder that a boat doesn’t have to be at sea to be at risk: January snows collapsed docks and boat slip roofs at marinas in Kentucky, severely damaging hundreds of boats and even pushing several craft past the point of reclamation.

Fortunately for insurers, these types of claims have not been enough to turn the tide of profitability they have enjoyed in recent years. “We had just a phenomenal season [in 2015] for boating, with no significant catastrophes,” says Todd Shasha, managing director of Travelers’ personal insurance boat and yacht unit.



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NMMA releases outboard sales report, new schedule for statistical abstract

The National Marine Manufacturers Association announced Tuesday a new format and release schedule for the 2015 U.S. Recreational Boating Statistical Abstract, which contains thousands of data points and insights on the boating industry. Each section of the Abstract will be released individually as the statistics are available, making this critical industry data much more timely and valuable.

“NMMA’s annual Statistical Abstract is the most comprehensive collection of industry data available and a trusted source for recreational boating statistics—our revamp of the format and corresponding release schedule makes the data even more valuable because it’s now timelier and therefore much more useful to the industry,” said Thom Dammrich, NMMA president. “With the data being available immediately after it is gathered and analyzed by our team, the industry can utilize it to better understand our changing industry.”

The first section report to be released is an 11-year look at outboard engine sales trends: NMMA Outboard Engine Sales Trends 2004–2015. This report is now available for download by NMMA members here. Members must be logged in to NMMA.org to access the report.

Highlights from the outboard engine report include:

  • Outboard engine retail sales were up 8.7% in 2015, reaching a post-recessionary high.
  • Growing demand for high-powered engines was reflected by a 23.2% increase in average horsepower.
  • Outboard engines are a leading indicator for boat sales – four out of five new boats sold are outboard-engine propelled. (A similar report on boat sales will be available in May).
  • Detailed information on total dollar sales, units sold, average prices, and top 20 states can be found in the complete report, with historical data trending.

Below is the release schedule for the Statistical Abstract’s remaining data sections:

  • March: Sailboat Sales Trends
  • April: Pre-owned Boat Market; International Exports/Imports
  • May: Cruiser, Watersport, and Off-shore Fishing Boat Sales Trends; Powerboat Sales Trends; Total Industry Sales by Category and State
  • July: Total Boat Registrations
  • August: Full Report

NMMA members receive unlimited complimentary access to the digital versions of each section as they’re available in addition to the full compilation report, which will be released in August. Print editions of the full report are available for $200 for NMMA members and can be pre-ordered now.

The 2015 U.S. Recreational Boating Statistical Abstract is also available for purchase by non-NMMA members. Contact stats@nmma.org to order the report(s) and get immediate access to pertinent boating industry market research.



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