Benchmarking your Boat Dealership

The number of boats your dealership sells annually is often seen as a dubious metric. In addition to the type of boats you sell and the size of your dealership, we know that COVID-related supply chain issues are affecting both inventory and demand. That being said, boat sales per year is still an important metric to pay attention to and will become more important when boat sales begin their (inevitable) return to “normal” levels.

Why? It can provide you with insight into how successful your current sales strategy is and if you need to make changes going forward. When partnered with lead data, it can give you a quick estimate of how many leads you need to generate to get a single sale. This will help your team break annual lead and sales goals down into monthly, weekly, and even daily goals that are easy to monitor, manage, and contextualize.

Benchmarks for annual boat sales are dependent on the size of your dealership. In general, 31–80 sales per year is good for small and medium dealerships. Larger dealerships generally want to be above 80 sales per year. If you find your dealership falling short of or surpassing these benchmarks, it’s more important that you understand why this is happening.

While Dealership Advantage can’t change the number of boats that your OEMs are shipping, we can help your dealership sell more boats. By reducing the days-to-sale, you increase your throughput and can sell more boats in a given period.

Margins are arguably the most important type of metric to track for your boat dealership. They allow you to understand the true profitability of your dealership and can give you direction on which aspects of the dealership need more of your time, energy, and resources. We recommend calculating a general average across all products as well as calculating the margin percentage for each model. This will allow you to identify which models are performing below average and which are performing above.

If you want to capture new customers and retain the ones you already have, you need to listen to their needs. That is where customer satisfaction surveys come into play. These surveys allow you to directly measure a customer’s perceived satisfaction with the service you provide and define it numerically as a Customer Satisfaction Index (CSI).

This feedback produces a number of benefits for your dealership. At their most basic level, these surveys show customers that you care about their opinions and that you are working to better your dealership, but they also allow you to identify areas of your user experience that need improvement and others that are working just as intended. Additionally, because you are receiving feedback directly from your customers, you can reach out to those that had a negative experience and try to make things right.

There are a variety of customer satisfaction surveys, including CSAT, CES, and NPS. So, examine each and determine which is most appropriate for your dealership. The key is to consistently measure — and work to improve — customer satisfaction. Regardless of which survey you choose; Dealership Advantage can help you implement and track customer satisfaction across all areas of your business with integrated email and SMS messaging.

This benchmark is essentially a measurement of how effective your service technicians are. How much billable time is produced each day, week, and month.

With constraints on new boat manufacturing, it’s essential that your other departments, such as Service, are operating as efficiently as possible. To measure your service efficiency, divide your billed service hours by the actual time clocked on the work order. For example, if you bill a customer 3 hours and it takes your tech 2.5 hours to complete the work, you're operating at 120% efficiency (3/2.5 = 1.2 or 120%). If you bill for 2 hours and your technician spends 4, that’s 50% efficiency.

100% efficiency is the perfect number to strive for as it means you are accurately quoting your services, however, anything above 76% is good, and above 90% indicates operational excellence.

According to OutboundEngine, acquiring a new customer can cost five times more than retaining an existing customer. Additionally, the success rate of selling to an existing customer is 60–70% while the success rate of selling to a new customer is generally 5–20%. These statistics alone are reason enough to measure and prioritize customer retention for your dealership. Assuming the customer had a good experience with your dealership the first time around, selling to them again is exponentially easier than selling to a new customer. An existing customer is already familiar with your experience, already trusts your dealership to some degree, and you already have their contact information.

If your customer retention rate is average or poor, consider implementing tools to support your service technicians and support teams. At Dealership Advantage, we offer dynamic visual management tools as well as automation, so your team can stay on top of any incoming requests and exceed your customers’ expectations.

Much like service efficiency, turnaround time can either be detrimental or beneficial to the customer experience you offer. A short turnaround time impresses customers and keeps them coming back. Slow turnaround times can lead to bad reviews, complaints, or even abandonment by the customer. It is absolutely crucial to track how long it takes your dealership to complete work orders and service tickets. There should be an ongoing focus on decreasing the amount of time it takes to respond to customer requests and eventually fulfill them. Similarly, you should make it a goal to meet or beat the estimated timelines you provide customers. A customer may not care whether or not you service their boat in five days or seven, but if you promise five and it takes seven, you can bet they won’t be happy.

To improve turnaround times, we recommend implementing automated emails or text messages, so users receive an immediate response from your dealership regardless of if any of your customer service reps actually have time to respond.

The Finance and Insurance (F&I) department at a boat dealership offers financing options, insurance plans, and add-on services. These plans help customers gain warranties, asset protection, and additional benefits for their newly purchased boats. With these service contracts, customers can add value to their assets and dealerships can generate additional revenue. It is important for your dealership to examine F&I revenue as a percentage of total revenue because F&I services are often the most profitable for dealerships.

If you currently don’t offer F&I services, there is no need to worry. We offer stand-alone F&I services to boat dealers across America. When combined with our Finance module, you get a one-partner solution for maximizing revenue from F&I.

The penetration rate is the percentage of your boats that you finance over a given period of time. You can calculate the penetration rate by dividing your number of boats financed by the number of boats sold. For example, if you sell 150 boats in a month but only financed 20 of them, your penetration rate would look like this:

F&I Penetration Rate is important for all boat dealerships to measure and track because a low penetration rate indicates that you’re missing out on additional revenue opportunities and, more importantly, losing sales. If you don’t offer good financing options, your buyer might walk and choose a dealer that does. Your penetration rate for F&I should be at least 25% and ideally as high as 75%.