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Inside: Eleven experts share strategies to help your dealership outperform the market

THE GUIDE TO

IN 2015

SALESSUCCESS

FEATURING 3 MDCE Speakers

THE GUIDE TO SUCCESS IN 2015SALES

PRESENTED BY: WWW.LHMEDIASOLUTIONS.COM 2

Dear MRAA Retail Member,

Welcome to the MRAA Guide to Sales Success in 2015, available exclusively to you, retail members of the Marine Retailers Association of the Americas. MRAA produced this guide in partnership with Lighthouse Media Solutions, MRAA’s endorsed provider of marketing solutions, to help you improve your dealership’s sales and profitability in 2015.

This is one of four Guides to Success that MRAA is publishing this year for association members, as part of our commitment to providing resources, tools and benefits you can put to work to grow your business.

This invaluable guidebook is a compilation of contributions from experts who offer you benefits through the MRAA Rewards Program and who speak at MRAA events, like the Marine Dealer Conference & Expo. Together, they offer you and your team dozens of tips, ideas, strategies and best practices for boosting margins on pre-owned inventory, managing consumer leads, implementing cloud-based sales tools, selling extended service agreements, obtaining proper business insurance coverage, generating referral sales, and much more.

Articles published in the MRAA Guides to Success in 2015 are designed to complement the incredible value offered to members during the MDCE. When combined with the notes, contacts and new ideas you’ll collect at this year’s event, you can’t help but enter 2015 prepared for new levels of success.

Thank you for supporting MRAA and its partners. We’re here to serve you with training, tools, resources, products and services designed to make a difference for your dealership. Got an idea for how we can serve you better? Please stop by the MRAA Rewards Pavilion at MDCE, give us a ring or drop us a note. We look forward to hearing from you soon!

Sincerely,

Lindsey Johnson Mike AllevaContent Manager Vice President of National Accounts & Account ManagementMarine Retailers Association of the Americas Lighthouse Media [email protected] [email protected]


Page 4 Improving Margins on Pre-Owned Boats By David Parker

Page 6 Benefits Before Buck$ By Jan Kelly

Page 7 The Benefits of Bargain Shopping By Jeffrey Gitomer

Page 9 Calling All Dealers: Manage Phone Leads to Boost Sales By Jeff Scherer

Page 11 3 Steps to Running a Financially Successful Dealership By Jeff Wyatt

Page 13 Taking the “Ice” Out of Price By Jan Kelly

Page 14 To Boost Sales, Reach for the Clouds By Kris Thayer

Page 16 Why Your Sales Process Doesn’t Work By Jeffrey Gitomer

Page 18 Extended Service Agreements Offer Additional Dealer Profit By Kurt Harbeke

Page 20 Increase Customer Credit Apps Through Marketing By Laura Smith

Page 22 Insuring Your Business: 4 Keys to Obtaining Proper Coverage By Mark Yearn

Page 23 The True Value of Insurance Referral Programs By Paul Sexton

Page 25 4 Keys to Generating More Referral Sales By Ryan Estis

Table of Contents



Improving Margins on Pre-Owned BoatsBy David Parker

I’ve come to find that most dealers are not making as much money as they could be on pre-owned boats. Do you make 25 to 30 percent gross margin on pre-owned boat sales? Is your pre-owned boat sales volume 25 to 50 percent of your new boat sales volume? If you answered “no” to either of these questions, there are several things you can do to realize these goals.

ACTUAL CASH VALUE/WHOLESALE VALUE There’s an old saying that the profit on a pre-owned boat is made when you buy the boat. In other words, to make the most money on a pre-owned boat, it must be bought (or traded) at the right price. Determining the right market or retail price is the first step to finding the Actual Cash Value (ACV) of the boat.

There are a couple of ways to assess the market price of a boat. One informal method relies on gut feel. The salespeople in the dealership estimate the boat’s retail value based on what they think it could sell

for in the next 90 days.

shop rates. The remaining amount is the ACV, or Wholesale Value, of the pre-owned boat.

Trade-in Appraisal Worksheets are a more formal way to determine the boat’s ACV. Two main components make up the worksheet: Condition and value.

The “condition” section consists of a list of questions about the age and physical condition of the boat. Some categories include: Engine, Accessories, Canvas, Gelcoat and Trailer. Each listing has a grade scale ranging from 1 to 10. It’s especially helpful when the boat is not present while its value is being determined. If the customer says the boat is a

10, for example, but it comes in with significant dock rash, there’s a legitimate point to negotiate a

reduced value. Make sure you have a place for the customer to sign the worksheet.

Right above the signature line ask the question “Is there anything

All the salespeople disclose their estimated value at the same time and come to an agreement. Surprisingly, a consensus typically is determined rather quickly using this method.

After determining the probable retail or market price, the ACV must be calculated. Multiply the market price by the anticipated gross margin — 20 to 30 percent or more. After subtracting the gross margin dollars from the market price, deduct for repairs and cosmetic work at normal

you are aware of that would affect this boat’s value that we have not discussed?” This is what I call the “Conscience Clause.” Most customers will reveal something at this point if it has not been discussed previously.

The “value” section of the Trade-in Appraisal Worksheet should include suggested prices from two or three trade-in guides and the average internet asking price for the boat you’re assessing. Keep in mind these



ABOUT THE AUTHOR:David Parker is the founder of Parker Business Planning, which offers dealerships individual, on-site consulting to create “Strategic Profit Plans” for clients; unique monthly management reports for multi-location dealers; online budgeting service with monthly variance reports; and multiple 20 Groups, producing monthly financial reports for each member. He has been involved in nearly every aspect of the marine business since working at his family’s Sea Ray dealership, including sales, service, rigging, F&I, parts, service management, and accounting.

are internet asking prices; the actual selling price typically will be 10 to 15 percent lower. An adjustment factor should be applied for above-average and below-average condition, and how popular the style of boat is (or is not) in your market area. Once the market price of the boat is determined, you can calculate the ACV.

EVALUATE THE TRADE EARLY It’s good to require that trades be delivered to the dealership at least one or two weeks prior to new boat delivery. This allows time for the service department to check the boat for any major flaws that were not disclosed by the customer. This practice has saved dealers thousands of dollars by discovering significant problems prior to closing the deal.

One pricing philosophy that makes it easier to take a trade is to start at a higher asking price on the new boat sale. The customer almost always wants more for a trade than it’s really worth. If a dealer starts negotiating by deeply discounting the new boat, it’s harder to get the ACV needed on a trade.

One solution is to start the first price quote closer to retail, and then apply the extra discount to the trade-over allowance. It’s much easier to make the sale to most customers with trades because they typically want to see a higher trade-in value on their boat, and that becomes possible with a higher starting price.

When you book the trade, put it into inventory at the ACV and reduce the selling price (on your copy of the sales invoice, not the customer’s) by the amount of the trade-over allowance. This lets your balance sheet properly reflect your pre-owned boat inventory.

Often, dealerships with a dedicated pre-owned boat manager make more money from pre-owned boat sales. Usually, a seasoned pre-owned boat manager is responsible for determining the ACV on all trades and for buying all pre-owned boats. He or she makes sure the boats are in tip-top condition before presenting them to the public. This individual also is charged with keeping the pre-owned boat pages of the dealership’s website up to date and for listing all pre-owned boats on various internet sales websites. Make sure you have several photos and a video of each unit on the website(s).

A quick response to all internet inquiries is critical. A reply within minutes is optimal; otherwise, try to respond within a maximum time frame of one hour, if at all possible.

TAKE TRADE-INS, SELL MORE BOATS This may sound like a no-brainer, but I still run across dealers today that do not accept trades. These dealerships require customers to sell their boats on their own, or the dealership will offer to sell it for them on a consignment or brokerage basis. The problem with this no-trade philosophy is that the dealership is vulnerable to losing the sale of a new boat to a competing dealer who does take trades. Customers find it’s easier to do business with dealerships that allow trade-ins.

In addition, having a pre-owned boat floor plan ensures that funds are available to take trades and to buy pre-owned boats. The pre-owned floor plan amount should be at least 20 to 25 percent of the dealership’s new boat floor plan limit. A dealer with a pre-owned boat floor plan can take trade-ins during the off-season, when cash flow is tight. They also are now in a position to buy pre-owned boats when the deals become available.

The quickest and most profitable turnaround on pre-owned inventory will come from cleaning and reconditioning the boats before putting them back on the market. When setting the ACV, be sure to allow enough money for the make-ready so that the dealership can afford to have the boat properly reconditioned before showing it to the public.

These are some of the best, most effective ways to increase your margins on pre-owned boats. How many of these strategies are you currently employing…?

The pre-owned floor plan should be at least 20 to 25 percent of the dealership’s new boat floor plan limit.



Benefits Before Buck$By Jan Kelly

Many dealers ask me if I advocate menu-selling. My typical response is that I advocate, promote and preach value-added presentation of all products, and then I bring out the menu to use as a tool to negotiate the protection plan that best fits the customer’s needs and budget.

There’s a huge difference between bringing out a menu (in any form), reading off the categories, and asking which one you want; versus completing a proper interview, establishing the customer needs, and presenting the products and services as solutions to those needs — then talking money.

Negotiate the benefits. Some customers only can afford a five-year service agreement, yet so many service managers only talk about a seven-year service agreement.

When only one choice is presented/discussed the question becomes a closed-ended one. The options for customers is reduced to: Do you want it, or not? When given this choice (or lack thereof), the customer more often than not chooses no coverage.

A better venue is to create value and provide alternatives. A choice between something and something will yield something; a choice between something and nothing will yield nothing.

Rather than reducing only the price of the products being offered, establish a standardized price for those products and provide

alternative terms with a variety of prices attached. Choices; customers love choices!

Menus should have retail prices listed, in addition to all the disclosures required by Regulation Z/Truth in Lending Act (TILA). When prices are discussed first, the customer seldom gets beyond the dollar figure. Prices without benefits usually equates to no sale, no profits and unhappy customers.

You may be wondering: What determines value? Value is measured in terms of the solutions you provide to the customer’s needs. First, we identify the customer’s needs, and then we present him or her with a solution, followed by the required investment for that desired solution.

Customers do not spend money to save money; they spend money to protect what they already have. They spend money for convenience. They spend money to ensure ease of ownership in the future. They spend money to provide them with peace of mind during the period of ownership. They spend money to satisfy their needs; and the greater the need, the more willing the customer is to accept the monthly payment.

Dealers frequently ask me: How can my F&I team improve selling ancillary products? The answer lies in your team learning how to complete a value-added package presentation independent of a menu. F&I professionals need to present product benefits before they discuss bucks. They also must have faith in the products and services they are representing.

The first step in developing an effective package presentation is writing out the presentation word for word. Have the manager read it aloud. Ask them why they are using those particular words; why they are asking those particular questions. Every word, every question must have a purpose. The presenter must know in what direction the words will take them.

Customers do not spend money to save money; they

spend money to protect what they already have.

ABOUT THE AUTHOR:Jan Kelly is president of Kelly Enterprises. She is an educator and consultant, convention speaker, and writes frequently for industry publications. For information about educational venues or joining an F&I 20 Group, visit JLKelly.com or call 800-336-4275.



The Benefits of Bargain Shoppingby Jeffrey Gitomer

I’m spending the day at Marché aux Puces, the antique flea markets of Paris. Also known as the “Puces” or “MAP,” it hosts 14 named market areas that offer an authentic, one-of-a-kind atmosphere. The market, steeped in history, brings together antique dealers, designers, artisans, artists and customers from all over the world.

It’s a powerful business location. Picture 2,500 antique dealers ready and willing to sell items ranging from bric-a-brac and advertising memorabilia; to designer jewelry and handbags, vintage fashion and furniture; all the way to museum-quality pieces dating back centuries.

It’s more than the eye can imagine, and way more than the wallet can afford!

I’m bringing my “A game” to the market because the sellers are both seasoned and knowledgeable. It’s clearly a “buyer beware” atmosphere, and cash trumps credit cards by as much as 20 percent.

There are three types of sale prices at the market: Retail, negotiated and wholesale. Retail prices are for the unsuspecting customer who’s willing to pay what is marked on the item or what the dealer asks for. Negotiated prices are for the savvy buyer who’s able to negotiate the listed price and pay something he or she is more comfortable with.

Wholesale prices represent the real amount the seller is willing accept to part with his or her cherished item.

Of course I’m trying to buy things with a price somewhere between negotiated and wholesale; meanwhile, the dealer is trying to sell at a price somewhere between retail and negotiated.

LET THE GAMES BEGIN! After buying a few negotiated items, as luck would have it, I ran into the great Michael Andrew Wilson, a longtime friend and professional shopper.

To give you a frame of reference, Michael purchased all of the furnishings for every Ralph Lauren store in Europe. He has spent millions of Euros at this market, and every seller and dealer knows him personally.

I’ve been to the market 20 times. Michael has been to the market 1,000 times. He knows everyone. I know no one. But just by walking around with him, I had “wholesale” prices wrapped up.

One other advantage that Michael has: He speaks fluent French. I speak broken French without verbs. When the buyer and the seller speak the same language, it’s much easier to complete an agreed-upon transaction. It’s also much easier to haggle for a lower price.

All in all, it’s a buyer’s marketplace… unless the buyer wants something badly. And, if the seller is savvy, he or she will hold out until they find out just how badly the buyer really wants the item. Luckily, those sellers are few and far between.

Most of the dealers at the market realize their sale is “of the moment,” and when a buyer walks away, it’s likely they’ll never return. The more conversation the seller engages in, the more questions the seller asks;

and the more the buyer feels like they’re getting a “deal,” the more likely it is that he or she will part with their cash.

The seller’s fatal flaw also is the buyer’s fatal flaw: Impatience, and the need for immediate gratification. The more profitable sale is exactly the opposite. It’s patience combined with extended emotional engagement.

WHICH KIND OF SELLER ARE YOU? How would you be able to win the sale among more than 2,499 other competitors, all within walking distance on a sunny day in Paris?

To me, the answers are obvious; but maybe that’s because I’ve been there many times before. Let me share a few ideas with you so you might be able to engage your customers in a way that they’ll buy from you rather than your competition:

All in all, it’s a buyer’s marketplace… unless the buyer wants something badly. And, if the seller is savvy, he or she will hold out until they find out just how badly the buyer really wants the item.



ABOUT THE AUTHOR:Jeffrey Gitomer is the author of 12 best-selling books, including “The Sales Bible,” “The Little Red Book of Selling,” and “21.5 Unbreakable Laws of Selling.” His books are now available as online courses at GitomerVT.com. He was the Opening Keynote speaker at the 2013 Marine Dealer Conference & Expo and is featured in MRAA’s Interactive Virtual Training System. For information about training and seminars, visit Gitomer.com, GitomerCertifiedAdvisors.com, or e-mail Gitomer directly at [email protected].

1. Find out how the buyer will use what he/she purchases. Where will it go? Who will see it? Will their family and friends admire it? Have they ever bought anything like this before? How much do they know about this particular product? How long have they been thinking about purchasing this kind of product? Do they think the value is there?

2. Try to uncover the buyer’s urgency for purchase. Why do they want this now? Do they understand that this is one of a kind? How much do they love it? How much do they want it? How

much do they need it? Make certain that you’ve explained affordability based on value and that perceived value is the basis of their desire. Everyone thinks most sales are made based on price, and everyone is wrong. Sales are made based on desire, need and perceived value, combined with urgency and utility.

Take a look at your sales presentation. Record it and then take a listen. You’ll see in an instant just how engaging you really are, and how well you let the customer have a chance to buy. Or not.



Calling All Dealers: Manage Phone Leads to Boost SalesBy Jeff Scherer

Our word of the day today is consumerism. Merriam-Webster defines it as “the belief that it is good for people to spend a lot of money on goods and services.”

As businesses, we cherish that word: Consumerism. An expanded definition of the word indicates that it also means “the promotion of the consumer’s interests.” That is definitely befitting of consumers today. Compared to just 10 years ago, today’s consumers certainly have moved the seller out of the driver’s seat, strapped themselves in, and taken charge of the wheel.

SHIFTING GEARS Ten years ago, as the internet was still blossoming, we were training seasoned salespeople how to properly respond to e-mails in a timely, palatable manner. For many, this was a difficult task; up until that time, salespeople were accustomed to shaking hands, talking on the phone, and writing up sales with a pen and paper. A decade ago, there were so many leads coming in from this new-found communication channel that, quite honestly, companies didn’t suffer much if a few inquiries slipped through the digital cracks and went unanswered.

Fast forward to today, and I think Bob Dylan sums it up best: “The times, they are a changin’.”

The internet certainly changed the way that we live (and buy); but today’s change is primarily centered around the influence that mobile devices have in supporting our “always on, always

reachable” lifestyles. Sure, we still use e-mail in never-ending ways, both as businesses and consumers, but e-mails are steadily being pushed into the back seat in favor of mobile searches, which result in a phone call. This being the case, we’ve seen stagnant growth in e-leads (and in many cases significant decline) and a huge rise in favor of phone calls. Some of our partners receive 10 call leads for every one web lead.

Jumping back to the training that we used to offer regarding e-lead response… salespeople were given a process map that instructed them to respond via e-mail, and then how to get the prospect on the

phone. The phone provides a much better tool to help qualify, establish rapport, and get that critical commitment to agree to meet at the store/dock at a predetermined time. No one argues that in general, a live phone call provides a much better opportunity to sell something than a monolog-ish, back-and-forth e-mail conversation. An inbound phone call also demonstrates that prospect has genuine interest in your product.

Here’s another eye-opening fact to consider: In the marine industry, many e-leads still go unanswered; however, dealers typically answer their phones 100 percent of the time. A Top 100 Dealer of ours says that they see a 50 percent closing rate on phone leads versus a 10 percent closing rate on web leads.

NEW TOOLS REQUIRED While most companies today have some sort of lead management or CRM program allowing them to manage their e-leads, they often don’t have a tool to help them manage phone leads — hence the need for a Call Management platform. A Call Management platform allows companies to see, hear, manage and report on phone calls that come into their business.

The advantages of a tool like this are that it:

• Does not require any installation or IT setup; every user has a phone number and a phone, which are the only requirements

• Reveals some important truths (good or bad) that are happening in the business and may help define areas that need attention (via a recording feature)

• Gives instant notification of missed calls or voicemails (every business gets these, but most just don’t know it)

• Provides technology that can assure prospects are getting to the correct person/department to help them with their needs

• Helps reveal the marketing tactics that are working, and the ones that are not

There are some great additional features that come with Call Management. They include the ability to:

• Ring multiple phones simultaneously



• Automatically re-route after-hours calls

• Add vanity phone numbers

• Customize greetings and free voicemail

• View previous calls from same customer

RING THAT BELL So now that you have your Call Management platform in place, let’s explore some ways to fill the funnel with calls.

The first suggestion (and the easiest) is to replace your website phone number with a unique call tracking number. You can use a local or toll-free number for this.

Second, make sure you have a mobile presence for your prospects. The reality is that if someone does get to your website on their mobile device and they find that it’s not mobile-friendly or hard to navigate, they quickly bail and don’t come back. Obviously, if your mobile site fails you, you don’t get to take a swing at those prospect calls because the phone’s not going to ring. Call Management platforms let you track calls generated via mobile marketing separate from other media.

Comscore is the leading industry internet tracking company. The chart below demonstrates that more than 60 percent of time spent on the internet is now on mobile devices. We simply cannot ignore this trend, as the “big change” took less than a year, and it’s still steadily trending upward.

Mobile searchers are much more inclined to follow that search result with a phone call, as illustrated in the Figure 6 graph below.

Small-to-Medium Businesses (SBMs) have rated phone calls as their number-one quality lead source (see Figure 1 graph).

A third consideration is to use individual tracking numbers on the various sales and marketing mediums you employ. For example, you

might use a designated unique number for e-mail campaigns, a different number for newspaper ads, a different number for service postcard reminders, etc. Doing this will allow you to instantly compare the number of calls generated through specific channels and then determine your cost-per-

lead to see if it merits repeating that campaign, or perhaps allocating more dollars to the channels that are working versus those that aren’t as effective. This also allows you to determine investments on a cost-per-lead basis.

SUMMARY Phone call leads should be a much more important part of your overall business. With some simple implementation, you can manage your phone leads in a similar fashion to the way that you manage your e-mail leads.

Call tracking can provide valuable metrics and insights into things that are happening today in your business. Nearly every business can improve on its handling of customer phone calls.

Mobile is the new preferred medium for today’s buyers. You should have a mobile presence for your business in order to accommodate these new shoppers. Your mobile presence can help generate high-quality phone leads.

ABOUT THE AUTHOR:Jeff Scherer is director of client strategy for Lifestyle Integrated Inc., a leading marine multi-media provider, and Teletraxx, a premier call management platform. He’s helped develop digital marketing, CRM and business management solutions for the largest automotive and marine manufacturers and dealer networks. Scherer has presented several times at marine industry gatherings, including the Marine Dealer Conference & Expo, along with various OEM dealer conferences. He is a frequent contributor to Marine Marketing Tools and various marine industry publications. Scherer was a consultant to the MRAA team that developed the Marine Industry CertifiedDealership Program. You can reach him via e-mail at [email protected] or by calling 855-558-7299.



3 Steps to Running a Financially Successful DealershipBy Jeff Wyatt

In business, there are no guarantees. There’s no way to eliminate all risk, but you can improve your chances of success with good planning, sound reporting and thorough evaluation. I worked in small businesses for years and learned the value of planning the course, generating financial statements and tracking progress. But when I owned and operated my own business, I did none of these things consistently. My time was spent on what I thought were much more important tasks and decisions; and besides, no one routinely demanded to see my financials. This was a huge oversight on my part, as decisions were made based on gut feel.

By following the three steps below, you can learn from my past mistakes and create a plan for success for years to come.

STEP 1: CREATE A BUSINESS PLAN At certain times in our life, it’s fun to “wing it” or “go with the flow.” A few of you might hearken back to your college days, when you piled in a car with buddies and made a road trip over Spring Break. You were young and naive and had very little idea of where you were going, where you would stay, and how much it would cost. That didn’t matter then, as you were up for whatever happened. On the business side of things, however, an over simplified approach; “winging it,” will cost you more than you might think.

A business plan should be written annually with a simple and realistic approach. If you’re a new dealership owner, talk with others in your industry, check on relevant data and read about industry standards in order to get started. If you’re an existing dealership, break down the basic areas where your revenue comes from and outline the keys to making your revenue work.

For example, if you sold approximately 200 new units each year for the last three years and expect to sell 250 next year, how will you accomplish that? Once your revenue is understood, plug in the estimated cost of sales and take a close look at your margins. Decide whether they are healthy or should improve. If they need to improve, note how and what the plan is to make it happen. Look at your expense structure from last year and use it as a guide to create next year’s expectations.

Evaluate your bottom line net and determine if you are satisfied with it. Spend a lot of time on this critical point. For example, if your planned bottom line net is 2 percent of revenue, is that what you’re after, or can you do better? If you then decide to improve parts of your plan, note them and what your assumptions are. Lastly consider your cash flow requirements for the upcoming year and whether you are set up to succeed.

STEP 2: GENERATE MONTHLY FINANCIAL STATEMENTS Once you have a plan in place, consistently compiling monthly or quarterly financial statements is a necessity. Doing so is not cheap and

requires a commitment to slow down and routinely take an honest look at where you are compared to where you want to be. As the months go by, there’s typically no one clamoring for your financials until year end, and business owners can be guilty of running their business on the same optimistic gut feel as I once did.

As a previous small business owner, I know the daily grind can bury you in crisis, juggling today’s cash flow with tomorrow’s demands, and you forget how important it is to have accurate and timely perspective on what’s working profitably and what is not. Combine these factors, and it becomes easy to avoid the most critically necessary information to any small business. This leads to a lack of proper perspective on your financial position and then defers sound decision making.

In my current role at Priority One, a recreational F&I company, I’ve seen numerous financial statements over the last several years where a dealer’s year-over-year revenue dropped by 40 to 50 percent with no adjustment in overhead costs, which, in turn, produced a large operating loss. Many dealers were in the dark and did not have the information and perspective to properly adapt and impact change. As a result, unnecessary losses occurred and personal capital had to be contributed.

The primary purpose for compiling monthly statements for small business is to use them internally as a gauge to improve and change course before your resources are depleted. For example, if a boat dealer carries five lines of new inventory and for the purposes of keeping things simple lumps them all together as “new sales,” there’s no perspective on what is profitable and what is not. There could easily be an unprofitable product line buried in a healthy total. The sooner this is understood, the sooner pricing and inventory levels can be adjusted and incur fewer wasted resources to your company.

There’s a saying in the world of personal finance: “Act your wage.” It simply means don’t spend more than you make. On the business side, if your revenue is slowly trending down and you are unaware of the impact, you may not have the ability to adjust other parts of your expense structure in order to maintain healthy margins. In a nutshell, you may be spending more than you are bringing in, and this



could easily lead to net operating losses and, once again, the need to contribute personal capital.

If your financials are not reviewed or audited by a CPA firm, the burden is on you to make sure they follow Generally Accepted Accounting Principles (GAAP). There are a multitude of rules, some of which can be quite complex. If no one in your office knows GAAP, your financials could be in the wrong form and could mislead people — including lenders — that rely on them. This risk can be avoided by having either a competent person on staff or by turning your books over to a CPA to prepare your financials.

Be sure to use the accrual basis of accounting. Evaluating your financial position strictly on cash received or paid will lead to inaccurate conclusions on your position. Accrual basis captures the economic events that have actually occurred, regardless of when something is paid. For example, if a customer puts a $25,000 deposit down on a new unit to be delivered in six months, accrual basis would reflect a sale when the unit is actually delivered, not when the cash changes hands. On the flip side, if a unit is sold and a customer does not pay for 60 days, the sale should be recognized when the customer takes possession of the unit. Most software packages easily accommodate for cash based on accrual. Cash-based accounting may make tax returns easier, but the priority should be on making sound business decisions based on timely financial information. Let your CPA sort out the cash conversion to file your returns.

Your financials should be clean and easily understood in a summary format. If they are more than a few pages for each year, there may be too much unwanted detail. If there are negative account balances, be sure they are investigated, as they may present the wrong picture to your lender(s). I’ve seen several financial statements that show all liability and equity accounts as negative amounts. These were not errors; just that the software package presented them as negatives or deficits. Equity balances are critical in the eyes of lenders, and it’s possible that these could be viewed incorrectly and a decision could be made to deny credit to your company.

STEP 3: USE BENCHMARKS Times have been tough recently, cash may be tight and customers may not buy the way they used to. If you don’t know whether or not you are succeeding, you won’t have the conviction to force change. On the flip side, sales could be up and you may be feeling great about business and not have the appetite to uncover the profit leaks. Something happens to a small business owner when there appears to be money in the bank. It’s called blind optimism. Don’t let your revenue and cash balance totals create complacency in making solid decisions.

In order to accurately measure your revenue, implement a system of benchmarking using financial statements to hold your company accountable to your expectations. This is an extremely difficult task to commit to, as it will almost always appear to be low priority and there always will be other critical tasks to tackle. The key is to hold a competent person responsible for compiling information and telling you how you are doing compared to your expectations. Note the word competent; if the information is sloppy, late and inaccurate, the entire process will bring no value and drain resources.

The designated individual should benchmark your financial statements against industry information, along with other relevant data. There are multiple sources available (some are offered at the end of this article). This information can be used to gain insight on key areas of your business in reference to what healthy gross and net margins look like, how much should be spent on marketing and legal fees, what percentage of your revenue should be spent on payroll, average insurance expense, and so on.

For example, if the average company in your industry spends 1 percent of revenue on marketing and you are spending 4 percent, it may be worth itemizing your marketing spending and deciding which elements actually work. Another useful example: The average gross profit on pre-owned sales in your industry could be around 30 percent. If you are running at 18 percent, this could be a critical exercise to evaluate which part of the pre-owned sale process is too low. It all starts with timely information and proper perspective.

Think back to that college road trip. You probably have good memories of that time, but you’d likely pass on doing that trip again today. As a business owner, you have responsibilities to family, employees and customers that count on your success. These steps may seem daunting at first, but creating a plan, generating financial statements and tracking the process will pay off in the end.

General Benchmarking Resources

The Retail Owners Institute

ValuationResources.com

BizStats.com

Wolters Kluwer

QuickBooks Add-ons and Resources

Intuit Apps

ABOUT THE AUTHOR:Jeff Wyatt is controller for Priority One Financial Services, the recreational industry’s oldest and largest F&I outsourcing provider, has been in the F&I industry since 2009. Prior to joining Priority One, Wyatt owned and operated a home building and modular construction company with residential and commercial projects throughout the Gulf Coast of Florida. He also has served for more than 15 years as a controller and vice president of finance for some of the nation’s largest homebuilders, including Lennar Homes, Mercedes Homes and Lexington Homes, where he was responsible for all aspects of financial reporting and cost control.



Taking the “Ice” Out of PriceBy Jan Kelly

We’ve all been taught that when value exceeds price, a customer will generally decide to purchase a particular product or service. The price may still leave a bitter aftertaste in the customer’s mouth, so the challenge is: How does one take the sting of the “ice” out of the price of goods being sold?

The process begins with first determining the buying motivator(s) of your customer. Is it increased security? Peace of mind? Affordability? Convenience? Ease of ownership? Dependability of the dealership or product name? No matter the reason, determine the answer during the customer interview process using keen observation skills and by asking the right questions.

If your finance department has not brushed up on its people-reading skills, get staffers to invest some time in doing so. The ability to read body language — and to determine the customer’s personality — cannot be overstated. Having this skill set saves time, deals, and add profits to the bottom line.

I’ve worked with the DiSC Personality Profile system for almost 30 years, and I find it’s an excellent teaching tool. Most dealerships use some form of personality test for employment candidates, as this is typically part of the hiring process. I see value in taking it one step further and teaching the skill set to individual employees in your dealership’s finance department.

In years past, the finance department of a boat dealership was traditionally made up of one person, who manages no one, yet answers to everyone. This individual is generally the last person your customers see during the sales process and the first one they remember — regardless of what happens with the unit. The impression this person leaves with the customer can be positive or negative.

Obviously, we all desire a positive experience coming from the finance side of the boat-buying process. Investing time and knowledge yields a positive result with customers when it comes to financial transactions.

After the needs-assessment part of the process is complete, your in-house financier will know how to approach the subject of providing additional protection for the new purchase. The goal is to first identify a specific customer need(s), then present a suite of products

and services as a solution to that need(s). Timing is essential, and remaining on point is equally as important.

Using a presentation book keeps your F&I manager and the customer engaged in the process. If you don’t have a presentation book, I encourage you to build one and use it.

To use — or not use — a menu is a question that I’m frequently asked. The real value of a menu is as a closing tool. Menus itemize and summarize the various protection packages you offer. In order for a menu to be effective, the dealership should have the ability to vary benefits of the packages.

Example: If your dealership has a menu with three different categories, then perhaps the service contract you offer could include a selection of either a 5-year, 4-year, or 3-year plan. You might even vary the deductibles. The idea is to provide a choice between something and something else and avoid the choice between something and nothing.

Menus also should itemize the transaction, making the cost of each individual product and service obvious and detailing what the additional charges do to the payment. A best business practice is to make the transaction transparent; leave no hint of impropriety. No hidden costs, and no surprises to the customer.

When customers enter your dealership’s financial center, they have a sign on the face that reads: “What is in it for me?” Your team should be able to identify why the customer is making the purchase. Learning to read customers’ signs is the key to presenting intangible products and services successfully, and in a way that makes customers want to buy from you.

The golden rule is to present product benefits before talking price. If a customer doesn’t see the value in your products, then price always is going to sting and the sale will be lost. Remember: Benefits before buck$!

ABOUT THE AUTHOR:Jan Kelly is president of Kelly Enterprises. She is an educator and consultant, convention speaker, and writes frequently for industry publications. For information about educational venues or joining an F&I 20 Group, visit JLKelly.com or call 800-336-4275.



To Boost Sales, Reach for the CloudsBy Kris Thayer

I find it interesting and a bit ironic that the expression “Get your head out of the clouds” suggests it’s wise to stay grounded and refrain from daydreaming if you seek to maintain sharp focus and get things accomplished; yet as it turns out, my best solution for running a financially successful dealership turned out to be right there — in the clouds… or via a cloud-based sales tool, that is.

Two years ago, our south-central Michigan-based dealership, which our family has owned and operated for nearly 30 years, adopted a new cloud-based sales tool that’s literally changed the way we do business (selling both new and pre-owned boats). Its implementation roughly two-and-a-half years ago now has, to date, resulted in a gross margin increase of 4 percent at the dealership; that amounts to a significant jump in profits!

Sound too good to be true? Trust me, from one dealer to another, it isn’t. You also can experience the same impressive results at your dealership — if you consider incorporating cloud-based sales tools as standard business practice.

A NEW (AND BETTER) MOUSETRAP For years, our dealership struggled in its search for solutions to everyday dilemmas like employing professional sales techniques and enforcing proper inventory management controls. I always found it awkward — and even borderline offensive at times — to whip out a clunky, cumbersome dealer manual and desk calculator right in front of a customer each and every time he or she asked me to add or subtract an option from a new boat, not to mention how embarrassing it was to keep shuttling back and forth from the sales floor and leaving the customer unattended for long periods of time. Then, once a purchase decision finally was made, it could take hours to finish the necessary paperwork and officially seal the deal, gobbling up valuable time for both dealership personnel and the customer.

Implementing a cloud-based sales tool solved all those problems at my dealership, and then some. It gave me the advantage of always being prepared to answer a buyer’s questions regarding price and available options, including taxes, tag fees, dealer-added equipment, freight, and rigging, as well as available payment options. And all this information became available to me through a few simple keystrokes. I no longer had to hunt and peck for the bits I needed; they were all right there, in one, concentrated, constantly updated location.

Suddenly, everything I needed to effectively and successfully run my business was literally in the palm of my hand, accessible via a cloud on a tablet or smartphone and keeping me and my staff mobile and capable of always sticking like glue to our customer’s side, regardless of the questions he or she sought answers for.

Gone are the days of hand-written purchase agreements and credit applications; now, all those documents are stored in the cloud, completely automated and accessible from inside the dealership, working a boat show, or lounging on a beach in Fiji. Having this unlimited, unrestricted access to information means you can help customers 24 hours a day, seven days a week, from literally anywhere

in the world. What better way to provide stellar customer service than being able to answer buyers’ questions right when they call or e-mail?

HOW IT WORKS Cloud-based sales tools like the one our dealership is using are accessible via the internet. We can use it to configure custom retail quotes, control margins, complete sales and customer loan applications, and monitor existing inventory in a simple, timely and professional manner. Before this solution, it used to take us hours



and, in some cases, days to pull the sum total of information I needed to complete a sale from start to finish; now, that collection process is instantaneous.

Today, our sales team enjoys immediate access to all our current inventory — both new and pre-owned boats — and is easily able to quote a new model for customers that may or may not be available in stock. Our salespeople work the showroom or boat show floor with tablets in-hand, giving them high-speed access to answers for questions that potential customers typically ask; whether those inquiries are related to product knowledge or pricing. The entire sales team now has the ability to price option upgrades on any in-stock unit or completely build a boat from scratch to fit that particular customer’s needs — all without ever leaving their side.

By strategically placing wireless printers in our showroom, sales personnel are never more than a few steps away from presenting clear and accurate sales quotes, which keeps the customer interested and engaged throughout the entire process. By using manufacturer MSRPs, quotes always will distinctively show the customer a MSRP, associated discounts (printed in red), and a final sale price.

We found that through this pricing strategy, customer negotiation dropped off significantly — shifting from quibbles over thousands

of dollars, to a simplified, drilled-down focus on small items they’d merely like to see included in the sale. If a customer requests the actual sale price of all items included in the deal, our cloud-based system has the ability to print out a PDF of the dealer sale price quote, clearly showing the actual sale price of the boat and its complete list of options.

All dealership sales team members can access preset sale prices via the tool’s margin control function, set by sales management, and our minimum sales price if negotiation is required to capture the sale without management approval. Through the tool, management can set a minimum retail margin. It also includes a comprehensive lead management system to track e-mails and contact information regarding one particular sale, or any other customer looking for

something special. This ensures not one, single lead goes unattended or gets lost in the shuffle, especially during the height of busy season.

If you want to exponentially boost your dealership’s bottom line, consider implementing the latest cloud-based sales tools and technology in your business. You’ll see your sales grow, even in this relatively weak market, and watch your closing rates skyrocket.

How’s that for daydreaming?

ABOUT THE AUTHOR:Kris Thayer is president and co-founder of Marine Dealer Technologies and a partner in Thayer Marine Inc. in Jackson, Mich., a 30-year-old, family-owned and -operated dealership. After many years of searching for solutions to the everyday challenges of perfecting sales techniques and inventory management, Thayer and his family decided to create their own, customized solution. Marine Dealer Technologies’ suite of digital products provide marine dealerships across North America with the tools they need to increase margins, improve presentation skills and heighten professionalism among staff. For more information, visit MarineDealerTechnologies.com.

If you want to exponentially boost your dealership’s bottom line, consider implementing the latest

cloud-based sales tools and technology in your business.



Why Your Sales Process Doesn’t WorkBy Jeffrey Gitomer

Are you being forced to sell someone else’s way? Are you uncomfortable using a “system” of selling?

I recently read a report stating that 70 percent of all sales systems and sales initiatives fail. I have no idea who created that number (personally, I use 74 percent for my statistical reports), but the point is clear: A system of selling and its accompanying sales process are pretty much doomed to fail before they begin.

Please don’t e-mail me, telling me that your system is the greatest and that it totally works. Somebody is staking their claim that 70 percent or more don’t work; and if yours is among the few that do — congratulations! If your system works, it means that you have a small sales force, or that your system has been in place for so long, that it’s refined to favor the customer, not the company.

For years I’ve written about why systems of selling fail, but please don’t misunderstand my core belief: Almost all systems of selling do not work, and along with them come failures of the manipulative sales processes that are attached.

I’m about to tell you why most systems don’t work, and then offer up strategies for the ones that do work. Maybe it will help you build awareness and improve your decision-making process as you try to elevate your sales skills — or your sales results, or even your sales team — to a superior level.

Failure #1 The sales system is all about the company that prepared it. It’s not relevant to the salesperson, nor engaging enough to the customer. It’s too much perceived work on the part of the salesperson for not enough results. It’s too much of a hassle. The person that trained it sucked.

Failure #2 The sales process is at odds with you and the market. The process doesn’t include mobile application. The process is old. The process deals with manipulation. (“Find the pain,” “what keeps you up at night,” and “qualify the buyer.”) The process deals with things that are uncomfortable for the salesperson. The process is not compatible with the way the company does business.

Failure #3 The sales leader who bought it isn’t convinced it’s going to work; he or she is using it as a CYA tactic. There’s forced participation rather than joint buy-in. The sales leader is more interested in his or her salespeople being accountable to him or her for their activity; not being responsible for themselves and their outcomes.

Failure #4 Senior management has not endorsed or used the process. Senior management won’t use the process themselves.

Failure #5 The salesperson thinks it will cost them sales. Period.

Need a few more reasons that systems fails? Here’s a bunch, in no particular order:

• No buy-in from salespeople before the purchase

• No collaboration with the people who will actually use the system

• The system and/or process is too manipulative

• Lack of proof that the system actually works in your environment

• Lack of proof that the system or process actually works in your market

• The system does not match the salesperson’s style or personality

• The system is not in any way customized for your salespeople or your customers

• The system is not flexible

Almost all systems of selling do not work, and along with them come failures of the manipulative sales

processes that are attached.



• There is natural resistance to change

• Fear of lost sales

• Resentment for being forced to participate

• Poor training by the launch person

• Too much work perceived for not enough sales

• Sales are down right now, and this is a stab at resurgence

• Attempting to fit a round sales peg in a square sales hole

It’s more than likely that many of these reasons apply to you or your system. Damn. The result is that you lose sales, lose salespeople, and there is lower morale. Yikes!

Sales is not a system, nor is it a manipulative process. It’s a series of strategies that are in harmony with salespeople and their customers.

Here are some sales strategies that do work:

• Create a go-to sale strategy that everyone is comfortable with; friendly, engaging, value-driven, conversational, and backed with proof from video testimonials

• Everyone should participate in creating the sales strategies, from the CEO down

• Collaborate with the sales team; they’re the ones that will use the strategies

• Create strategies that are flexible and comfortable; have several different opening questions to choose from and offer alternative ways to engage or close the sale

• Have a “value proposition” in favor of the customer

Whatever sales strategies you employ, they must:

• Start with social attraction

• Work in your environment

• Be easy to use and time efficient

• Be state-of-the art and state-of-the-market

Here’s a tip: Collaborate with existing customers. Get them involved

in and accepting of the sales strategies that you use.

Sales are all your revenue and all your profit; and salespeople are the

conduit for all that revenue. Why would you jeopardize your money and

your profit with a system that everyone will fight?

ABOUT THE AUTHOR:Jeffrey Gitomer is the author of 12 best-selling books, including “The Sales Bible,” “The Little Red Book of Selling,” and “21.5 Unbreakable Laws of Selling.” His books are now available as online courses at GitomerVT.com. He was the Opening Keynote speaker at the 2013 Marine Dealer Conference & Expo and is featured in MRAA’s Interactive Virtual Training System. For information about training and seminars, visit Gitomer.com, GitomerCertifiedAdvisors.com, or e-mail Gitomer directly at [email protected].

Collaborate with existing customers. Get them involved in and accepting of the sales

strategies that you use.



Extended Service Agreements Offer Additional Dealer ProfitBy Kurt Harbeke

The value in offering your customers a marine extended service agreement is two-fold: It provides peace of mind to customers purchasing a boat by protecting their investment and it creates an additional revenue source for the dealership. Extended service agreements likewise provide dealers with another customer touchpoint that can result in repeat business.

So… why don’t more dealers offer extended service agreements for their customers?

MAKING THE CASE Some dealers may be satisfied with the revenue they bring in simply from selling boats, parts and accessories; still others may be concerned about the liability and responsibility of handling claims, neither of which affects the dealership. Others might be concerned about ruining a sale by throwing in an added expense for consumers that could add hundreds or even thousands of dollars to the final cost, depending upon the length of the contract, type of coverage, and region where the contract is sold.

For dealers willing to look beyond the “unknown,” selling extended service agreements has its rewards. The closing ratio for service contracts can vary by product and cost of the boat. Making the case for offering service agreements comes through training and education. It’s crucial that dealers know what service agreements are and what they cover.

THE FINE PRINT Just what are service agreements, and what should dealers look for if they want to sell them?

Both dealer and consumers often confuse service agreements with warranties, which are product guarantees from the manufacturer. They also may believe that service agreements provide “bumper-to-bumper” coverage. Service agreements can have different options that cover all types of vessels. The “options” could be for additional benefits or specific items the boat may include based on the needs of the consumer.

The contract coverages available are easy to understand, as they are what’s known as “Stated Component” contracts. “Stated Component” contracts will list everything that the contract covers. If it’s listed, it’s covered; if, on the other hand, it’s not listed, then it’s not covered. Simple as that.

Service agreement coverages have expanded quite a bit over the past five or 10 years. The biggest change has been in covering technology-related parts and products.

TALKING SHOP The service agreement should be brought up in the conversation with consumers as early as possible; otherwise, making the case for purchasing one becomes harder.

Dealership personnel also need to know how to handle customers’ objections, as well as fully explain the coverages available and how best to use the programs offered. Furthermore, experts say, dealers must be committed to selling service agreements, know what they are and how they work, and have a system or sales process in place for getting consumers to buy them.

There’s a lot that goes into selling vehicle service agreements other than price. It’s all in the presentation. In the past, some companies — including ours — have provided dealers with an “evidence book” to show consumers what their service costs could be, both with and without service agreements. I recommend that each month, dealership F&I personnel pull a current monthly repair bill that includes items covered by a service contract (after redacting the customer’s personal information, of course).

Showing your customer a repair order that was just recently completed at the dealership, sometime within the current month, has a much greater impact than putting national averages on brochures or marketing pieces that may be months or even years old. Another impactful suggestion is to show customers an actual failed part from the service department — the idea being they’ll see the damaged part and make the connection that with a service agreement, this type of failure is covered.

I recommend dealers include service agreements as part of their menu offerings. Equally important is making sure F&I, sales and other dealer personnel are trained and given the proper marketing materials — like brochures, posters and stickers — to help advertise and explain the service agreement offered.

REPUTATION AND SERVICE When dealers are looking for a service agreement provider/administrator, experts recommend that dealers find companies offering a fully-insured product. This provides the consumer with coverage on his or her marine vessel, whether or not the provider/administrator or dealer remains in business. The dealer support process



is equally as important. The dealer must be aware of current changes not only in the industry, also but with state and federal laws.

It helps if the service agreement provider/administrator has a good reputation, long history in business, and good customer service track record. Companies that have been around a long time know how to handle claims.

BUSINESS CENTS So how much of a profit can dealers really expect to make from selling service agreements?

In most states, dealers can establish their own markup, allowing for different profit margins. Florida, for instance, is one state that regulates the selling price of service agreements. But the markup can only go as high as the lenders are willing to finance.

Boosting profit through marine service contracts is attractive. Dealers can take this profit structure one step further by

enrolling in what’s known as a Reserve Participation program.

Two common types of Reserve Participation programs are Retro

and Reinsurance, the latter being an option for dealers with a high volume of service agreement sales. Some Retro programs offer dealers that sell as few as 10 contracts per month the ability to get money back once the contract has earned out. These checks are sent to dealerships on a yearly basis.

Reinsurance is more of a longer-term investment and takes considerably higher production to make it worth participation.

Some Reinsurance companies

are U.S.-domiciled, while others are located offshore.

Offshore companies that wish to be designated as U.S. taxpayers must

meet certain IRS requirements. Like with any other programs affecting your dealership profit or tax structure, advice from your

accountant and/or tax adviser always is recommended.

THE FINAL ANALYSIS In the end, it’s up to you to decide if selling

service agreements is the right thing for your particular business. Still, companies that sell or

administer such contracts say that it’s a win-win scenario: To earn profit on a product that likewise helps

customers protect their investment.

ABOUT THE AUTHOR:Kurt Harbeke is national sales manager for American Guardian Warranty Services. Growing up, he was involved in a family-owned business in Northern California; a multi-location dealership selling mobile- and motorhomes, travel trailers, motorcycles and Jet Skis. In 1996, Harbeke left an RV dealership in Marietta, Ga. and went into the vehicle service contract business. He was given the task of creating a new program for RVs, managing agencies and developing dealership F&I departments on a national scale. Harbeke has been a speaker at several national and local conventions and provided information and commentary for industry magazine articles. He can be reached via e-mail at [email protected] or by calling 678-787-9744.



Retailers spend significant time and marketing dollars to get customers to walk through their doors and purchase their products. But for boat dealers like you, for whom the sale of products greatly depends on the availability of financing, your marketing efforts can’t just be aimed at getting them in the door.

Marketing the availability of financing to ensure the customer drives off the lot with one of your units equally is as important. But all too often, dealerships forget to focus on this key area of marketing. In this article, I’ll show you a few ways to promote financing in order to increase customer presence at your dealership, increase your chances of securing the sale, and increase income generated through your F&I department.

TAKE ADVANTAGE OF LENDER PROGRAMS AND PROMOTIONS Lenders offer numerous promotions throughout the year. Consumer show specials, changes in interest rates or program guidelines, and zero interest or no payments are great opportunities to freshen up your marketing and reach out to potential customers. Show specials create a sense of urgency. Advertise different specials throughout the year to encourage interested buyers to fill out a credit application immediately in order to take advantage of limited-time offers and promotions.

PEAK INTEREST ONLINE The vast majority of today’s boat buyers do some research online before walking into a dealership. If your website doesn’t advertise

the availability of financing, you are losing potential F&I income, or, worse yet, potential unit sales. By making sure your customers know they can finance their purchase at your dealership, they don’t have to spend time shopping for financing through outside sources. Any time a customer has to reach outside of the dealership, whether it

be for financing, insurance or service, you lose control of the sales process. Show them that you are a full-service dealership, offering not only the boat they are seeking, but also the means by which to pay for it. Provide an online credit application, payment calculators and information on product protections offered through your F&I office, such as extended warranties. Consumers want to educate themselves before coming into the dealership. Give them everything they need on your website, and you can be sure to maximize the number of online shoppers who turn into boat buyers.

INCORPORATE ON-SITE MARKETING Once you’ve got the customer in the door, ensuring they know financing is available is more important than ever. At this point, the customer probably has a pretty good idea of what they’re looking to purchase. Make this task even easier by displaying on-site signage advertising financing, and have credit applications easily accessible for customers to complete. Use “Payments as low as…” hangtags showing estimated monthly payments for units on the lot. Aside from billboards and physical displays, there is perhaps no greater tool to market financing than your sales staff. Encourage them to mention financing early in the process and ask for an application from every

customer at every sale. By doing so, sales staff help prevent customers from leaving the dealership to seek financing, exposing the customer to outside influences that may eliminate your dealership’s opportunity to generate F&I income or, worse, jeopardize the sale altogether. Many dealers provide incentives to their sales teams for completed credit

Increase Customer Credit Apps Through MarketingBy Laura Smith

If your website doesn’t advertise the availability of financing, you are losing potential F&I income, or, worse yet,

potential unit sales. By making sure your customers know they can finance their purchase at your dealership, they don’t have to spend time shopping for financing through other sources.



applications, making it easier for them to remember offering financing options to customers.

USE YOUR EXISTING CUSTOMER BASE Existing customers who have purchased from you in the past may be ready for an upgrade. In addition to using this database of contacts to promote dealership events and new product lines, reach out to previous customers and remind them that you can help them finance and protect their next purchase. Even if they aren’t ready to purchase today,

they will be reminded of your dealership when they are ready, or may refer your dealership to family or friends. Sending direct mail is a low-cost way to keep in touch with your customers and promote dealership financing.

REMAIN COMPLIANT Keep in mind that the Federal Truth in Lending Act provides very specific guidelines relating to the advertising and disclosure of closed-

end credit. Make sure you review Regulation Z and follow its guidelines when marketing any payments, rates or promotions. Seek council for clarification or questions relating to disclosures to ensure you don’t violate these federal provisions, as the penalties can be severe.

One of the keys to maximizing sales and F&I income is increasing the number of credit applications completed by customers. Promoting financing should be a critical component of your dealership’s marketing activities. Dealerships should make sure at every contact

point — online, in print, on air and in store — that the customer knows financing is available. Doing so will help ensure your dealership has the best chance to attract and capture every customer while creating the greatest number of opportunities to assist with their purchases. Recognizing the value of marketing financing will help create happy, loyal customers, ensure the sale, and generate additional income through your dealership’s F&I office.

One of the keys to maximizing sales and F&I income is

increasing the number of credit applications

completed by customers

ABOUT THE AUTHOR:Laura Smith is the marketing manager for Priority One. Before joining the Priority One team, Smith worked in marketing for several boat manufacturers, including Wellcraft Marine and Hydra-Sports. She holds a degree in Journalism from the University of Wisconsin Madison, and her experience working with dealers made her a perfect fit for the Priority One family. Smith moved to Florida 11 years ago from the Midwest in order to boat year round. She and her husband own a Formula PC and enjoy boating in the Tampa Bay area.



Everyone purchases insurance to protect their business. Whether you’re a dealer, marina or boatyard, every business owner spends his or her hard earned-dollars to offset risk through the purchase of insurance coverage. There are four critical areas to consider when putting together the insurance program for your business. It doesn’t matter whether you’re a small dealership operation or a large marina facility, failure to understand some of your insurance particulars could wind up costing you millions.

Let’s take a closer look at the four most important factors to consider when insuring your marine business:

1. Replacement cost valuation The easiest insurance to purchase is on your buildings. The best advice I can offer in this arena is to insure to replacement cost valuation. Make sure you have a sense of what your buildings will cost to replace should a total loss occur and spend the extra money to insure them to value. It will save you thousands if — or when — you do have a loss.

2. General liability General liability is simple insurance to purchase, regardless of what type of business you’re in. The best advice I can offer here is to know whether or not your carrier plans to conduct an audit. Many carriers will audit all your receipts to determine the cost of your insurance, and some will even charge you a minimum and a deposit. A few recreational marine insurance companies do not require audits at all.

3. Dock protection If you’re a marina, boatyard or a dealer with docks, well… now things are getting a bit more complicated. Again, you always should insure to value. Many carriers are now requiring replacement cost valuations from a reputable dock manufacturer in order to even consider insuring your docks. If you have this secured in advance, it will help you in the long run. Insure to replacement value and protect this asset. I cannot tell you how many of my clients said that they will never experience

a total loss, only to one day have a total loss and lose millions. It can happen to anyone who owns a dock system, particularly in this changing weather environment, regardless of location.

4. Use of inventory Many insurance companies treat inventory as a simple form of insurance, but not all insurance coverage is created equal. Did you know that most inventory insurance policies exclude personal use by dealership employees? How many of you take boats out for personal use, or allow your staff to use boats for personal use? That entire activity is more often than not excluded from insurance coverage. Another key inventory exclusion is towing. Most inventory policies do not allow for towing during a demo. Thoroughly review the insurance protections allowed under your current insurance policy as it pertains to inventory and double check that you have the proper coverage in place to adequately protect your operations.

Buy from marine-knowledgeable agents and insurers Many agents have access to insurance products that will protect a boat dealership, boatyard or marina. They offer terms and conditions with an attractive price. A word of caution, however: Don’t buy on price alone! If one company is offering rates that are significantly less expensive than everyone else, chances are you’re giving up something in order to realize those savings.

Purchase your insurance from a specialist who knows your business. Does the agent know and understand your dealership or marina? Has he or she read the insurance policy they are trying to sell you? Is the agent willing to put his or her reputation on the line in order to sell you the insurance they’re offering?

Heeding advice in the four above-mentioned areas will help your business in the long run. More often than not, the cheapest does not mean the best. Never forget that.

Insuring Your Business: 4 Keys to Obtaining Proper CoverageBy Mark Yearn

ABOUT THE AUTHOR:Mark Yearn is national program director for Norman-Spencer Marine Insurance Services, which has been providing business insurance and risk management service to members of the Marine Retailers Association of the Americas since 1988. For more information, contact Yearn at [email protected] or visit norman-spencer.com/programs/marine.



Every marine retail business has long-lasting relationships. Good relationships are at the core of the recreational marine industry. It’s one of the things I’ve grown to appreciate throughout my career.

For every facet of your operation, you probably have your “go-to” person: Your manufacturers rep, parts vendors, banker… even the claims adjusters you see frequently in your shop.

One commonly overlooked or underused partner is the insurance agent for your customer’s boat insurance. You, of course, know your business insurance agent like family. You remember 15 years ago when he or she had your back during that bad claim and handled it like a pro — and that’s why you do business with him or her to this day.

Do you have a similar (and trusted) relationship with a boat insurer for your customer’s new purchase? Have you considered having that reliable connection can further strengthen the relationship with your buyer? Do you show customers that you care about what happens to them after they take delivery of their boat?

It may sound simple, but your endorsement of a knowledgeable boat insurance partner — and the subsequent purchase of a quality

insurance policy — will go a long way towards making your customers’ boat purchase a positive one.

Much of my 20 years in this industry has been focused on point-of-sale partnerships. I consistently hear that last-minute struggles with closing a loan are a pain; dealing with the lender at the eleventh hour when a customer has a shoddy policy can be a hassle; and insurance is just one more thing dealers have to worry about, and it drains their valuable time and resources. Or, worse yet, I hear about problems that

happen after the insurance policy purchase. When your customer finds out what he or she bought wasn’t what they thought or expected, well, that’s when things can get ugly.

Unfortunately, your service manager often bears the brunt of customer insurance complaints; like when the customer sees a bill for service that the insurance company did not cover. While this scenario can happen with just about any boat insurance policy on the market, it

The True Value of Insurance Referral Programsby Paul Sexton

It may sound simple, but your

endorsement of a knowledgeable boat insurance partner — and the subsequent

purchase of a quality insurance policy — will go a long way towards

making your customers’ boat

purchase a positive one.



shouldn’t be the norm — and proper counseling from a boat insurance professional can help alleviate the likelihood that issues like these will occur.

You can — and should — do what you can to help your customers with their insurance needs.

Generally speaking, if you don’t ask your customers what they’re doing regarding insurance coverage, they certainly won’t ask you. Always ask. If they say they have it under control or they’ve “got a guy,” give them another option. In a perfect world, they’ll bring proof of quality insurance to satisfy your lenders. That frequently isn’t the case.

If you have an existing partnership that works for you, that’s fantastic! Take care of your customers. And enjoy the ease that it can provide during the closing process (or when it comes to future sales).

If you don’t currently work with a trusted insurance partner, make it a priority to establish a relationship with a reputable boat insurance agent; one you can trust and feel confident endorsing. A knowledgeable agent can make the insurance transaction a positive part of the overall boat-buying experience for your customers — not to mention making you look that much more reputable and trustworthy yourself for having endorsed them in the first place.

If you endorse a particular insurance agent and your buyer decides he or she does not want to use the referral, that’s okay, too. At the very

least, you’ve planted the seed of expectation, and they will likely show up prepared (i.e., with insurance coverage secured in advance) to take delivery of their new boat. If they are unprepared and show up last minute without insurance, does your partner provide after-hours and weekend service? Many of your deliveries happen when most insurance agents are closed. Consider that when you choose.

Remember: Insurance referrals should be easy. Give the endorsement early. Get the buy-in for the referral. The insurance agent should take it from there; not pile more work and requirements on your shoulders. They should contact your customer. They should sell the policy. They should take the customer’s payment. And at the end of the transaction, they should send you proof of insurance for your files. That way, you can move on to more important things, like selling more boats.

This process goes a long way towards creating a positive experience for customers. Over the years, I’ve seen it work well with involved dealerships. On the flip side, I’ve heard others tell horror stories, and that’s why you need to make sure you’re placing your valued customer in the hands of a pro.

Finally, don’t overlook referral fee programs. They’re out there. At a minimum, make sure you ask about them. In many instances, you could be missing out on thousands of dollars a year by not participating. Just keep in mind that what you do and don’t get paid should not be the ultimate reason why you do — or don’t — do business with a particular insurance agency. Service standards and quality insurance programs should be your number-one priority when weighing your decision.

If you have a great relationship with an insurance agent, fabulous — keep it up, and use it to help your customers. Good relationships (and good customers) are harder to come by these days. If you’re in need of an insurance partner, do your homework and find someone that can help you — and if you earn some additional revenues in the process, well, that’s not a bad thing either, right?

You can - and should - do what you can to help your customers

with their insurance needs.

ABOUT THE AUTHOR:Paul Sexton is vice president of Norman-Spencer Marine’s boat and yacht division, insuring more than 25,000 customers nationwide. He joined Norman-Spencer in 2010 after 17 years of product management and underwriting experience with a large specialty marine insurance company. Prior to his career in marine insurance, Sexton proudly served in the United States Army for seven years and is a Gulf War veteran.



4 Keys to Generating More Referral Salesby Ryan Estis

How can I generate more referral business?

I was asked this question during a recent event. It’s an important question, since we know that referrals are becoming a primary mechanism for how we make decisions.

A 2012 Nielsen study found that 92 percent of consumers trust word-of-mouth or recommendations from friends and family above all other forms of advertising. A Texas Tech study found that 83 percent of consumers are willing to refer after a positive experience — yet only 29 percent actually do.

How can you take advantage of the opportunity to close that gap? If you’re a sales person or entrepreneur, referrals can be the catalyst to drive exponential growth in your business or territory. The question is: How do you get them? How do you get a referral engine going? Here are my four tips:

1. GET CONNECTED Find a way to get and stay connected with people you meet. People who are interested in your work, people who you’re interested in, people you can help — they’re all valuable relationships, and it’s never been easier to stay connected. I generate a lot of connections and referrals through LinkedIn. I’m always looking for ways to grow my “engaged audience.” I’m not interested in paying for 500,000 Twitter followers who have no real interest in my work. I’d rather connect with 10 people who I’ve met, that care and might benefit in some way from what I’m working on.

2. MAKE YOUR OWN REFERRALS Referrals are a two-way street. Look for every opportunity to help, connect and support people in your network. How can you give value first? Get proactive about making your own referrals, without expecting anything in return. It’s very rewarding to connect other people and watch the results. I look for every opportunity to reward my long-term vendor partners with referral business. Making referrals helps everyone succeed.

3. STAY TOP-OF-MIND This is the new sales challenge: How can you stay relevant to someone else so that they think of you first when the time is right? If you meet someone at an event, connect on social media and then never communicate again, how valuable is that connection three years later? Timing is everything, and the strength of a new connection diminishes over time if you don’t nurture it.

To stay top-of-mind, you have to be strategic about providing value. For me, blogging is the best way to consistently add value. Every week, my connections have the opportunity to see articles from me on LinkedIn, Facebook and Twitter. Blogging helps me stay relevant and produce new connections, conversations, introductions and close sales.

But you don’t need a blog to contribute. Share information that you think your connections will find relevant and helpful. Create mutually beneficial connections. The key is to consistently contribute and look for ways to add value.



4. ASK Asking for referrals can be powerful, but to get results you have to earn the referral.

The key is to give value first, without expecting anything in return. If you’re working with a customer, deliver more than expected. Create reasons for them to want to reciprocate and help you. When your work is great, people are inclined to share.

People also are more inclined to help when they trust the relationship. Instead of leading with the ask, earn the right to ask for a referral over time. You’re much more likely to get a positive result. I’ve found that so many people want to help — and are more than willing when asked. You just have to create the right conditions.

Here’s an example. During a recent event, I shared a story about one of my customers. After the keynote, a woman who was in the audience

introduced herself to me, handed me her card, and immediately asked for an introduction to that company’s CEO. That puts me in a tough spot. I don’t know anything about her or her business, but she’s asked me to leverage my relationship with a client and friend. It wasn’t a great ask — she didn’t earn it.

A better way to ask for the referral: Give first. Think about how the situation would have been different if she had introduced herself, made the connection with me, and then followed up by delivering value. What

if she’d sent me a package a week later with sample products and a handwritten note, referencing my keynote? She would have advanced the relationship, and I would have been more inclined to help her.

Networking proactively takes time, but it makes sales easier. Reputation and relationships precede referrals, and that’s exactly why investing time in helping others and expanding your network always is time well spent.

ABOUT THE AUTHOR:Ryan Estis is a former chief strategy officer for McCann-Erickson Advertising and now serves as the chief experience officer in his own training organization. He is a leading expert on sales effectiveness, leadership and the future of work, and was recently recognized by Meetings & Conventions magazine as one of the “best keynote speakers seen or heard” alongside Tony Robbins, Bill Gates, Colin Powell and Coach Mike Ditka. Estis works with category leading brands, including AT&T, Mayo Clinic, Adobe, MasterCard and the National Basketball Association. He delivered the Closing Keynote at the 2014 Marine Dealer Conference & Expo.

Create reasons for them to want to

reciprocate and help you. When your work

is great, people are inclined to share.

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