Picture this… in a major recession two dealers in a prime boating market independently pondered how to deal with it when the bottom started to fall out of the economy. Dealer A said, “A recession is hitting me hard. Business is getting to be really bad. So I had better pull back almost all of my advertising and promotion and cut other expenses wherever I can.” He did just that and sure enough, his prophecy was spot on… business was really bad.
However, Dealer B in the same market thought, “We are being hit by a big recession, so I need to cut the expenses I can without hurting business and sending customers the wrong signal. And I really need to continue promoting but spend my ad dollars wisely to get the most bang for the buck and keep as much business as I can until it turns around.” And sure enough, he kept as much business as possible…much of it business that used to go to Dealer A who pulled in his horns too far.
As an industry, how have we dealt with this recession so far? It appears partly by following Dealer A’s strategy and cutting the Grow Boating/Discover Boating programs. Huh?? If ever programs like this were needed, it has been since this recession started. I just received a recent MRAA bulletin that made the following announcement regarding these programs:
“MRAA welcomed the news the Grow Boating Board of Directors had been reconvened and was taking action to re-launch the program. MRAA was disappointed with the news that full funding was not being restored to Grow Boating immediately. With only 15% of the engine assessment going to fund the ongoing Discover Boating Internet marketing and public relations efforts not much can change in the media marketing effort.”
Only 15% to fund Discover Boating? Huh? It sure looks like the “Dealer A Syndrome.”
So here we are, struggling to come out of a major recession, the worst downturn since the Great Depression, and this is all the industry can do?
On top of that, we have the big oil spill in the Gulf that is putting a big hit on dealers in Louisiana, Alabama and Mississippi… and soon to some dealers in Florida. And beyond Florida, who knows where that oil might end up. Ed Lofgren, owner of 3A Marine, Hingham, MA and Chairman of the MRAA, expressed his concerns about the oil spill when he e-mailed me this comment, “The economic impact of the Gulf Oil Spill could potentially ruin the Gulf economy and perhaps even throw the national economy into another tailspin or at least extend the recession we are trying to recover from.” He added, “And what happens to the East Coast recreational marine industry if the oil from this spill gets into the Gulf Stream? One model projects oil debris landing in Maine.”
To combat this recession and the catastrophic oil spill, I think the boating industry needs to get on the stick and promote the Grow Boating/Discover Boating programs with gusto – not with a scaled-down, lackluster effort. What else can the industry do? It can help dealers to survive this current season so we can have healthy retailers when the recession finally climbs out of the abyss. How? Boat builders, who have also been struggling for survival, need to find ways to help dealers with boat inventory. Offering a few boats on consignment and/or floorplan help in some manner would be a great start. And certainly introducing 2011 models in the fall like some builders are doing can also be a big help to dealers.
This industry should not follow the pattern of “Dealer A” in the example above. Let’s be like “Dealer B” and kick start this business with more well planned promotion and additional help for dealers.