© 2019 by DSN&A

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Syndicated Column

DSN&A authors an internationally syndicated column entitled NATCHEZ ON THE WATERFRONT regarding marinas and recreational boating.

Current Column:

Natchez on the Waterfront

Know Your Market

 

One of the easiest questions to ask and one the hardest to answer: what is your market?  Some would define it very broadly, some very narrowly and others in between. 

 

I would venture to say that knowing your market has three basic components – where you have been, what is current and where is it moving to for the future. 

 

Where you have been is certainly the easiest of the three, though I am continually surprised how often it gets forgotten.  There is clearly value in taking some time to look back at what things were like in the past, both recent and longer term.  How have things changed?  How are they the same?  Are there things that have fallen through the cracks?  Who were your best customers last year?  How about ten years ago? Are there common denominators?  The better we know the past the better we can understand where we are and where things might be heading.

 

What’s current should be obvious, though it seems we often get so caught up in the day to day that we don’t stop, look and listen.  Stopping might actually be the hardest part.  There are always too many things to do, so how can we stop to read an article, to go to a boat show or conference?  But these kinds of “breaks” are important.  So is stopping and looking at what’s happening at your own facility and in your own “neighborhood.”  And above all is the importance of stopping to talk to your customers – and not just chit-chat, though that is also useful, but to really talk to your customers and LISTEN to what they are saying, get THEIR impressions of the good, the bad, the ugly and their unfulfilled desires.  It’s one of the best ways to adjust the big picture to your part of the world, and infinitely helpful as you look to interpret the tea leaves as to where your market may be heading in the future.

 

So what’s happening in the big picture?  There are numerous trade magazines that suggest new boat sales are up and boat chartering is growing at a rapid pace.  And while generically on a global that may be true, the devil is always in the details, and it may or may not be true for you.  Basically there is a lot more to it.  For example, it’s not unusual to see an article about boat sales being up but in the same issue there are stories of brands or dealers going out of business.  Other articles say units are down, but at the same time some lines are sold out.  My takeaway is that overall sales have been improving but are still a bit mixed.

 

With respect to chartering, it certainly appears as though mega and super yacht chartering is up, but the big dollars associated with it tend to skew the overall boating statistics to look better than they otherwise might be.  And since chartering mega and super yachts is not realistic for most facilities in most places, one needs to be sure to look at what the market looks like for your particular location.

 

That’s not to say that chartering or various rental/shared ownership options might not be a viable and growing market where you are, just be sure to do your homework and not count too much on the too big picture.  In fact today boaters have more choices than ever as to what types of boating they would like to participate in, what they perceive as a desirable boating experience, what the other demands on their time are and how much can actually be allocated to boating. 

 

Taking a real assessment of your location is always a good place to start.  The type of boating that has and can take place in your area and surrounding water bodies is critical to a meaningful assessment.  You might be surprised at the number of facilities in shallow water that have asked us for mega yacht designs.  The fact that they do not have enough depth on a sustainable basis (even including dredging, which in many places is an endangered species) has not entered their thinking.  Add to the mix things like the surrounding demographics, are you a point of destination for transients – short term or long, are you a seasonal or year round venue, what is the competition … and on and on.  While the list can become long, these types of simple questions start to build up a realistic evaluation of where you are and potentially the path for tomorrow.

 

The truth is that every site has its attributes and challenges (a euphemism for problems).  We are a big believer in capitalizing on a site’s attributes, such as deep water, safe protected harbor, great fishing grounds or whatever.  We also believe that once a site’s challenges are recognized, in most cases they can be turned around to meaningful approaches, such as providing covered slips for smaller shallower draft boats in shallow water. 

 

When I hear that the boater demographics are changing to an older population, I agree that this is something to take note of (and have also written about), but it is not necessarily a reason to panic.  There are, in fact, any number of expanding niches, as well as signs that there is more disposable income being made available for boat purchases or rentals.  That may not filter to all markets, but look, for example, at the inland lake and river markets, where the pontoon market is expanding rapidly.  They are great for shallow water (and some would say the relatively inexperienced boater), and while they were once thought of as nothing more than a cheap party raft (nothing against cheap party rafts!), they now run the gamut from that to increasingly expensive vessels with a wide range of capabilities.  And what surprised me most during a recent series of inland marina visits was the number of young kids (preteen – college) out on their family pontoon boats enjoying all sorts of water activities from tubing (which I still maintain was invented by chiropractors) to wake boarding to numerous other variations.  Those party barges clearly have evolved, and it’s not too hard to draw a line from these increased sales and uses of pontoon boats to the current apparent boom in sales of specialty wake/waterski and similar boats.  In fact these specialty boats had sold out productions in most countries last year – and they are not inexpensive!   

 

Another niche showing promise for areas that are good venues for sailing has been catamarans, with both sales and chartering increasing, especially in the warm climate destination markets.  Pontoon boat manufacturers also seem to be increasingly testing the salt water, with new lines and models designed to handle this very different environment – and it just may be worth keeping an eye on.

 

These various bright spots together with the signs of increased consumer spending do seem to be making their way to the docks, with the overall word I’ve been getting from most places this year, whether urban, suburban or rural, is that boat slip occupancy has increased in most categories, with the possible exception of the former sweet spot for 28 to 38 foot boats.

 

So the secret in seeking to know your market and where it is going is to really analyze your position within the area of the facility.  What makes your facility different? Why should they come (other than your charming personality)?  Why should they stay? 

 

Years ago it seems that the market trends would change gradually, and some would even say sluggishly.  Today the markets are moving at warp speeds, in part spurred by the electronic age – internet, social media, and television.  That can make it hard to keep up, particularly with your infrastructure, so as you consider changes or improvements to your facility, particularly your dock layout, it is becoming more important than ever to seek designs that provide the greatest flexibility.

 

Boaters old and young are also becoming more demanding, especially the young.  They do not want to know that things are not working – heck, not fun, chuck it – and off they go onto the next thing.

 

The reality is that customers do have options and are exercising them in ways not previously seen.  Most are willing to pay the cost of the experience if they believe that they are receiving value for the expenditures.  A successful future is predicated upon understanding that and seeking to satisfy those desires, which today are demands.  In reality there are niches and hotspots out there for various types of boating from paddle boards to megayachts.  Knowing your market is to recognize how your facility, with its particular attributes and challenges, best fits into your corner of the boating universe!

Previous Column:

Natchez on the Waterfront

Profit Making Ideas

There is absolutely no question that all in business would like to add to their profits.  Some are more successful than others.  Perhaps one of the most successful direct marketers to customers is Disney.  And who are the motivators?  Well, the kids, of course.  And how are they motivated to urge the purchasers (parents) of an almost endless variety and supply of goods?  In large part, it comes down to strategic planning.  At the end of every activity the customers have to navigate their way through a maze of displays with a multitude of items for purchase, all placed at just the right height for their targeted audiences.  Then, as you head to the next attraction, there are the ice cream and other enticements placed along or in view of the long lines of customers waiting to get in.  It does work well.  I suspect they also can count on parents being more inclined to give in to those desired purchases so as to keep their children satisfied in what is meant to be the happiest place on earth!

 

Zabars is a world renowned delicatessen/ gourmet foods store in New York City.  The attractions may originally have been the owners and their style, building a clientele of high-end food lovers.  However, it also became a major example for retailing. Every area was continually measured for popularity and profitability per square foot of display area.  If it did not work for that area – it was changed.  And if it worked for a time but then was seen to be lagging, they would not hesitate to change it as tastes (no pun intended) evolved.  They continually monitored customer trends, were not afraid to try something different, and if it did not work as desired – to replace it with something else.

 

One of the take aways is that both are constantly seeking to better understand their target audiences and continually study what motivates them – and thinking strategically.  Is there a way to have your customers exit through the gift shop?

 

I am not suggesting the marina line every dock with stuffed toys, but am suggesting that marina operators would be well advised to pause and take fresh looks at their customers, their changing attitudes, desires and expectations as well as the attributes and challenges of one’s facility.

 

Can you add elements along your customers’ path of travel that might entice them to buy something, and/or is there a way you could better guide your customers to where they might have more opportunity to buy something?  A picture of a juice or other drink, a sandwich, sunglasses, sunblock, first aid on a small cute sign can trigger impulse buying.  One marina‘s sign caption read “did you forget anything - have great time on the water”

 

No one likes to wait, but when your customers are waiting, whether at the office, the gas dock, for their boat to be launched or even on the phone, are there goods or services you might be able to sell them.  At the gas dock it might simply be a sign for your ship’s store and where to find it, or perhaps coolers full of beer and bait for sale.  Many service dock displays sun block – a large seller.

 

One marina we have been working with had a snack bar set fairly far back from the water.  It did ok but was often overlooked.  By extending an outdoor seating area out to one of the main pier entrances, they were able to greatly improve its visibility and patronage.  One thing led to another, and now they not only have the outdoor tables but put up a seasonal tent and have bands playing on the weekends.  Off season it all goes away and is available for winter storage.

 

While visiting another facility and taking a tour with the owner, we came to the upper end of the marina where there were no boats and he was bemoaning the fact that it was dead space primarily due to lack of water and boat navigational issues. 

 

I looked at it as a potential for turning it around as a profit center.  The area was not large or deep but would be great for a launch or storage area for paddle boards, jet skis, canoes, kayaks and other personal watercraft.  We put together some quick numbers and showed that not only would the minimal investment be able to be paid off in one year, but that area could be turned into a desirable profit center.

 

A mistake that is often made is that one thinks of profit centers as having to be a major contributor.  While major profit centers are certainly desirable and needed – there are lots of potential areas and activities that are viewed as wasted space or just too insignificant to be turned into desirable profit centers, but they can be by meeting the needs and desires of customers.

 

For those providing repair services, one of the most successful approaches that has been employed is calling the customer as work is being undertaken and offer to meet the customer at the facility in the evening or weekends at their convenience to show the progress.  An alternative is just to discuss on the phone the progress.  If there are things that have been found that could use attention, but not on the service order, point them out which can result in more work,  But more importantly customers many times forget to related the “small’ things that bother them and once a dialog is created – one might be surprised at the additions to the work orders.

 

As we increasingly move into the Millennials era, there are more and more studies attempting to ascertain their tastes.  And while the answers may change with various cultures, climates and locations, there are also common trends, including the following: desiring instantaneous satisfaction; very demanding; wanting everything to work; not interested in excuses; enjoying showing off their toys; and seeking a more informal lifestyle but with all of the accoutrements.

 

When it comes to the recreational marina, they are looking for an enjoyable hassle-free time. Boats are expensive, many times more than their cars, as is the operation and upkeep of the boat.  They like being catered to, and if they are happy with the results are happy to pay for it.

 

Having employees on the docks trained to interact with boaters to ask them is the anything they need from the store, snack bar, office, etc., caters to the Millennials’ desires.  Combined with neat, clean and bright outfits produce meaningful results. 

 

This opens the doors for various profit making opportunities, but once again they revolve around knowing the customers desires and expectations.  Oceanco certainly made a splash this year at the Dubai Boat Show with their 345 foot Esquel concept superyacht – billed as a superyacht specifically catering to potential Millennial buyers, and incorporating just about everything one could imagine!

 

On a much more mundane level, but important for attracting Millennials and maybe even most everyone else, are the basic decisions marina operators need to make relative to pricing for the most normal activities at the facility, such as water, electricity, Wi-Fi, trash collection, dock hand assistance, etc.  Does one want to have all-in pricing, à la carte pricing, or a combination?  It may not seem like is should be a big deal, but it can be.  

 

I recently visited a marina where the owner was explaining that he was having trouble attracting new customers to his facility, even though it was in good shape, clean, friendly and pretty inviting.  He had chosen an à la carte menu – and at the top of his list was charging for Wi-Fi.  I happen to have a personal bias against being charged for Wi-Fi and other basics.  When I walked the docks without the owner, one of the biggest complaints I found was the à la carte menu, and they had no hesitation of talking about it.  What was interesting was that they were willing to pay more for their slip rental with free Wi-Fi, electricity and other basics – rather than being “nickel and dimed.” 

 

That does not mean that one gives everything away, but it does mean one should selectively look at what one charges extra for. And if one selects all in pricing, do not be bashful at advertising it and continuing to talk about it.  It does make a difference and customers will talk about it on the social circuit

 

As I have often mentioned, running events, regattas and other happenings can generate both traffic at the facility and more usage of the boats, along with increased discussion among boaters, applying to both existing and potential customers.

 

Providing a concierge service, whether it is for transients or seasonal boaters, is a most appreciated service for customers. After all, we all have times when that extra assistance is meaningful, and it can be a way to not only promote what’s available beyond your facility, but at or through your facility as well. 

 

For those marinas that have upland amenities such as a swimming pool or other sports facilities, it might make sense to create a “club” and allowing non-boaters to join.  These types of shared approaches are becoming increasingly common, and can be particularly helpful where a marina’s clientele alone might not support having some of the extra amenities on their own.  And any time you can get non-boaters to the marina, there is always the chance you may be able to convert them. 

 

After all, once you are down the waterfront, how can one resist!  It’s as hard as saying no to your three year old daughter who really wants that mermaid T shirt at the gift shop.

 

Happy boating.

 

In the following Publications:

US - MARINA DOCK AGE

Asia - ASIAN MARINE, BOAT ASIA, MARINA ASIA PACIFIC

Australia - MARINE INDUSTRY NEWS

Canada - MARINA NEWS

Europe - MARINA EURO-REPORT, EUROMARINA

French West Indies - ALL AT SEA

Hong Kong - AHOY!

Korea - KCOMIA'S MARINAS

Malaysia - BUILDING PROPERTY

Middle East - WORLD OF YACHTS

New Zealand – SEA SPRAY MAGAZINE

Portugal - NOTICIAS DO MAR

Puerto Rico - LaREGATA

Singapore - ASIAN MARINE, BOAT ASIA, RAFFLES

South Africa - LEISURE BOATING, CARAVAN PUBLICATIONS

Spain - SKIPPER REVISTA NAUTICA

Turkey - YELKEN DUNYASI

United Arab Emirates - SEASPORTS MAGAZINE

United Kingdom - MARINA MANAGEMENT INTERNATIONAL
                                THE WORLD OF YACHTS & BOATS and 
                                MARINA INTERNATIONAL

Venezuela - CAZAYPESCA NAUTICA INTERNATIONAL.

Worldwide - FORE & AFT

Previous Columns:

2018 - 2019

May- Know Your Market

March- Profit Making Ideas

February- Regulatory 101 - The Do’s and Don’ts of the Regulatory Process

January- Combining Maintenance, Operational and Capital Planning

November- Stimulating Traffic to Marinas?

October- Pollution, Red Tide & Fish Kills - What Does It Mean to Marinas

September- What Customers Want Most

2017 - 2018

May- If You Had Three Wishes

March- Dredging & Relocation Of Dredge Materials

February- Managing Stormwater In a Meaningful Manner

January- Dry Stack V's In-Water

November- All Mixed Up - Marinas Within Mixed Used Developments

October- Trends - Road Map For Recreational Boating - Let's Not Miss The Boat

September- ADA Making It Work For You

2016 - 2017

July- Chains vs. Independents - the Yin-Yang

May- In the Spotlight with Regulatory Views

March- Marinas / Boaters / Online

February- The Changing use of Boats

January- Glitz Sells - Substance Sustain

November- Clean and Green

October- Trends - Meeting Tomorrow's Challenges 

September- Just Old Fashioned Service