Dr. Jouko Huju

“He who makes a trip has a story to tell” is a quote from the German poet Matthias Claudius (1740 – 1815). In today’s business world we call them trade missions, study tours or maybe fact finding trips.

The competition in the boating industry (or any industry for that matter) between various brands, products or services is fierce. The consumers can easily inform themselves over the whole offer of the industry in a matter of hours.  The competition though, that our industry should fear more, are other hobbies and activities. Be it caravans, motor homes, motorcycles, golf or travel, to mention a few.  The need for home renovation or a new car can delay a boat purchase.  We need to present the lifestyle too.

Although the marine industry competes against each other we should also be able to develop some sections together.  The better, more innovative and practical our products are, the better the services and maintenance and the easier the whole chain of a consumer’s boating experience is, the better chances we all have to succeed in increasing the number of boat enthusiasts.

Intercultural, open exchange of ideas and methods can be very productive. Should we close our doors to competition or should we let them in, see and hear what they think?   I think we should be more open. That is what the Finns have been doing for a very long time.

Since the 1970’s the Finnish industry has been travelling the world.  Well, even earlier because the first Finnish joint stand was at the Paris Boat Show in 1946.   We have been to all continents, numerous countries and visited together over 250 boat factories, marinas, equipment producers and associations.  We have been given the chance to learn about production technology, marketing, dealer networks and advocacy to name a few.  This all has been a very eye-opening experience.  Sometimes we learn and can apply new things, sometimes we find out that we do things better ourselves.  But all in all, it raises the bar and helps companies understand what the consumers around the world wish to have and where we stand ourselves.

In January 2022, during the worst pandemic of modern times, 16 people from the Finnish marine industry visited eight producers in Florida.   We had agreed on safety precautions and proceedings.  Full vaccinations, negative tests, full time mask wearing were the requirements.  And by the way, no one contracted the virus.

The demand for production boats at this very moment may be the highest through history.  We have to be able to ensure that the production is flawless and ensure that we are in control of the supply chain, which we are unfortunately not able to do at the moment. The companies know what is needed but there are things beyond their control.

The companies that we saw produce thousands of boats. The biggest number we heard for one company was 15.000 boats!!!  Their turnover was bigger than that of the whole Finnish marine business.  Economics of scale are interesting (and sometimes even frightening) to see.

But we saw a lot, we made notes, discussed and the delegation members returned home rich with ideas. Was the trip worth the time spent (a week)?  Absolutely. The next trip is already in the planning.

I am encouraging all to travel even more. Send your people to boat shows and events.  Even people that normally do not travel. It can be very productive.

Dr Jouko Huju DBA, GMBA-Finland
+358 40 5509310
jouko.huju@gmba.blue

Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA

The proper use of information made available by media and various organizations depends on the ability to understand the information needs, where to find and retrieve it and the proper evaluation of the quality of the accessed information.

Media and other information providers play a central role in knowledge gathering processes of the companies also in the marine and boating industries. They are a way of communicating information, although the role is somewhat broader than just that. The media, especially trade media, are defined, in most cases anyway, as sources of credible and current information created by journalistic and accountable values. On the other hand, the extremely wide and diverse selection of information and content, especially on the Internet, varies greatly in accuracy, reliability, and thus in value too.

In my view it is of utmost importance though, that you will not take the retrieved data at face value. All data is subject to misinterpretations. To begin with you need to ask yourself, why the data was required in the first place?

Let’s talk about why data is important for the boating industry too.

1. Data=knowledge

Correctly retrieved and interpreted data provides usually indisputable facts. Data will help you justify your arguments.

2. Results

You will need the data to follow and carry out your company’s strategy.

3. Solutions

Possessing the correct data will enable you to more easily assess the cause of problems.

4. Internal advocacy

Illustrating arguments through the use of data will allow you to demonstrate why changes are needed

5. Efficiency

Effective data collection and analysis will allow you to direct resources.

6. Know where you are

Good data allows you to establish benchmarks and goals because it allows you to measure.

To sum up for what purposes the data is needed:

• Finding new customers
• Increasing customer retention
• Improving customer service
• Better management of marketing efforts
• Tracking social media interaction
• Predicting salestrends

GMBA Australia’s MaryAnne Edwards says: “The boating industry is bombarded with information from a huge number of sources. There are many on-line newsletters that simply regurgitate press releases and in some very little journalistic work to verify facts is undertaken.  However, these newsletters do provide information as a basis for further research if it triggers an interest for a particular business. There are also industry surveys produced by various sources that are often skewed as businesses do not want or do not have time to be completing questionnaires, providing financial or sales data for these surveys.  I would always caution companies to take the information they read and then take steps to verify it if they are using it for business decision making.”

Countries often have in market reports on their government websites and generally these are not too bad as governments often have access to data media do not.

The big question is how people in the industry filter all this information and decide what is valuable and based on actual facts.  Also, do businesses have a good understanding of what information they even need to drive their business successfully.

So, in my view, when you read the news, think where it came from, who wrote it, could the writer really have had access to the data and has he/she interpreted it correctly.

I would say that in general the trade press in the boating industry is very reliable and the writers make sure to double-check the information. They then form, with their archives, an important and wide based source of information for strategic planning of the marine industry.

I would still urge everyone to have an open mind and not take anything for granted.

Dr Jouko Huju DBA, GMBA-Finland
+358 40 5509310
jouko.huju@gmba.blue

Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA

Who is responsible for being vocal about improving boating related services?

The economic impact of boating is huge.  Cities, communities and governments earn in form of taxes and other income.  In my view the question is, if those who earn are investing back to improve boating related services.  The Island Council, appointed by the Finnish Government, commissioned a study (2021) to find out what the real impacts in the economy and employment are.  It is good to remember that Finland has the highest per capita boat density in the world with over a million boats (5,5 mill inhabitants) and a season on max 5 months.  The question is if the industry and boaters are vocal enough to demand better services in return?

The overall findings show that the growing popularity of boating creates a total income of over 400 mill. € in terms of direct spending of boaters. This income employs directly over 2500 people and indirectly another 3800 people. In this country those are big numbers. The biggest shares of spending go to fuel, restaurant services, service/maintenance purchases and groceries.  The boaters from their side wish better waste collection and recycling points, places to empty septic tanks, places to get drinking water and fuel stations.  Fuel is a big problem in Finland’s vast archipelago.  The season is short and all kinds of safety regulations are becoming more stringent. The study shows that boaters want to be responsible and they wish to ensure that boating is environmentally sustainable from all angles.  The newest generation of boaters are busy people and they want to spend their time on water just boating.  They wish to be able to buy most services and not spend time maintaining the boat or worrying about winter storage or engine service.

Boat sales are soaring in most boating countries around the world.  Some say even with production boats the whole production of 2022 is booked. Companies report double turnovers and huge demand. The production at the moment is concentrating on its own problems of delivering what has been sold.  This is only natural. Who is then responsible for making noise about boating related services out on the water?  You might say that it is the boaters themselves.  And the related organizations.  In many countries though, you would need a joint voice of the boaters, the industry and the respective organizations. I also believe this topic should be covered by the media more than it is now.

The pandemic has been a major reason for the increased sales. In many cases the new boaters may expect that boating related services are just as good as e.g. with cars. There may be some disappointments. I am sure there are many working groups and committees dealing with these matters as we speak. The road maybe slow but for a sustainable growth in the number of boaters, one septic tank emptying place, one more recycling station or waste deposit place already make a huge difference. In the North European waters finding fuel stations starts to determine your routes.  To improve any of these a co-operation between private entrepreneurs and regional/national authorities is needed.  In my country a lot of good people already work on these issues.

The question is if the improvements can be done quickly enough to ensure that we can keep all those new boaters we now have.

Dr Jouko Huju DBA, GMBA-Finland
+358 40 5509310
jouko.huju@gmba.blue

Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA

The average size of marine companies around the world is rather small. They have limited resources for marketing in terms of personnel and funding. In the past years, competition has taken new forms. The digital world has changed the ways of marketing in its various forms totally. The customers can easily and in a short period of time get comparing offers for the same boat or engine or accessory.  Customer relations management, especially managing customer knowledge and customer accessibility, can generate new revenue.

There is an increasing recognition of the importance of managing customer relationships. Marketing has moved from a brand-centered focus to customer-centered  and lifestyle approach. The ability to acquire, manage, and model customer information is the key to sustaining competitive advantages.

The primary motivation for a firm to implement CRM applications is to track customer behavior and to gain insight into customer tastes and evolving needs. Customer relationship management applications facilitate organizational learning about customers by enabling firms to analyze purchase behavior across transactions through different channels and customer touch points.

Firms with greater deployment of CRM applications are in a better position to leverage their stock of accumulated knowledge and experience into customer support processes. In addition, firms with a greater deployment of CRM applications are likely to be more familiar with the data management issues involved in initiating, maintaining, and terminating a customer relationship. This familiarity gives firms a competitive advantage in leveraging their collection of customer data to customize offerings and respond to customer needs.

CRM is a strategic approach that is concerned with creating improved shareholder value through the development of appropriate relationships with key customers and customer segments. CRM unites the potential of relationship marketing strategies and IT to create profitable, long-term relationships with customers and other key stakeholders.

CRM provides enhanced opportunities to use data and information to both understand customers and co-create value with them. This requires a cross-functional integration of processes, people, operations, and marketing capabilities that is enabled through information, technology, and applications. CRM is a strategic tool to create another competitive advantage.

On the other hand, one needs to understand that it is not always easy for a small company to break away from the daily, cash bringing routines for any business development activity.

CRM is a process that addresses all aspects of identifying customers, creating customer knowledge, building customer relationships, and shaping their perceptions of the organization and its products. In general, one can say that more attention should be paid to the customer and the goal should be to get to know the customer better, develop a relationship with him or her. We should not only be interested in closing a deal and that the relationship should cover more than just the moment of closing the deal.

Producing data which helps a dealer to know his customers better is a key competitive advantage. Especially in the case of the rapidly changing marine business, retaining customers by better CRM is an important competitive advantage and a key to future success.

It is important to gain an understanding which components or competencies CRM is generally composed of. The four cornerstones of CRM are:

1. Customer knowledge
2. Relationship strategy
3. Communication
4. The individual value proposition

Knowledge of the individual customer is essential in order, ultimately to develop a long-term relationship and to supply customization. The individual customer information must be used to develop a long-lasting customer-supplier relationship. In other words, a marketing or other type of strategy must be implemented which truly differs from a strategy which merely focuses on stimulation of transactions.

Communication may, on the surface, seem to be a simple task, yet every customer who recalls experiences with suppliers will quickly arrive at the conclusion that the quality of conversation remains somewhat basic. This leads to the conclusion that many companies have no experience in carrying on a dialogue of any substance. This becomes even more complicated when multichannel communication environment is involved. An organization that takes the initiative to get to know an individual customer, to develop a relationship with him or her, and to carry on a dialogue cannot avoid also offering these customers an individual proposition.

There are four process selection criteria of CRM. First a small set that addresses tasks critical to the achievement of the organization’s goals. Second, each process should contribute to a value creation process. Third, each process should be at a strategic or macro level. Fourth, the processes need to manifest clear interrelationships. These cornerstones are very often totally missing from the scope of a marine company’s marketing plan or customer data management.

Customer knowledge relies on the quality of customer data. Incomplete, inaccurate, outdated data will not help us to understand the customer. The quality of relationship data becomes apparent to the supplier from the response it receives to a marketing campaign. The customer database is of good quality if it corresponds to current reality. Further the data needs to be complete, correct and unique. The set-up and maintenance of a database with customer data requires spending and investment. It is necessary for companies to become aware of which expenses must be incurred in order to collect, register and keep data up to date. It is just too easy to register everything that we run across only to find out that ultimately just a small portion of collected data has some value.

Integrated customer knowledge eliminates the unintentional overlap that leads to redundant sales efforts or serial communications among multiple departments. In addition, integrated customer knowledge can better synchronize product development to customer requirements and simplify customer-facing processes. Handling data improperly leads to only a portion of data’s potential value being realized or to a situation where the value of the data is nullified. There is a potential danger that data investments are not incorporated as an essential part of a company’s strategy. Another big challenge for the companies is the insufficient knowledge of available data and the manner in which it can be converted into useful information. The contents of data keep changing in a rapid pace and in many cased the superfluous data are not deleted but still require continuous attention.

Optimal knowledge management means segmenting information before analysis. Failure to do so will prevent us from extrapolating knowledge on specific clusters of customers. Through segmentation we are able to classify and categorize customers based on certain features which will help us better serve the customers. For instance, segmenting customers by their income levels will lead to a richer analysis of predictive buying behavior than simply grouping all customers together.

Communication may make a contribution to the “customization” of the customer contact and relationship management. It can provide us with better customer profile that can assist us in being of better service to the customer. One practical problem is to combine data from different sources.  Traditionally the databases’ strength lies in their ability to supply behavioral data and in term of market research, their suitability is to provide data on customer as a user.  The information obtained during personal contact with the customer serves to further improve the profile. Turning the information into knowledge requires integrating customer data across the enterprise, from the billing to the shipping department, to provide panoramic views of their requirements and activities. Decision support and other business intelligence tools are used to analyze information in order to highlight emerging trends, uncover potential problems, and give customers independent insights.

The competition for customers in the marine business is very hard. It is not only just one marine dealer against another. There is a fierce competition for the consumers’ leisure investments and the marine business has to fight against mobile homes, summer houses, travel, motorcycles and many more. Developing ways and knowledge of how to target marketing communications in a more cost-effective way is now a key factor for many to stay in business. Companies/associations would need to start the planning process with a professional CRM training company. However, it is important that the process is not too long, too costly or too time consuming. Again, a small business is too tied up in the daily routines to be able to spend too much time or travel too far for any training. The stress must be on making the dealers informed about the importance of customer specific approach and the importance of analyzed, segmented customer knowledge. They must also learn how to communicate in a customer specified way and at regular intervals. The big challenge will be to get the dealers committed to another somewhat time-consuming project. A clear advantage in a more personalized training is that it will eventually lead quicker to the development of personal relationships with key customers in a dealer’s own region.

Dr Jouko Huju DBA, GMBA-Finland
+358 40 5509310
jouko.huju@gmba.blue

Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA

Now there’s a challenging head-line.  I dare to write about it after having been involved in it for 25 years now.  I have had a chance to follow the industry from the very hands-on work all the way to the top of the organizational food-chain. The overall economic development has always played an important role in the success of any discretionary recreational activity of the consumers. The 2008 financial crisis had a devastating impact on the marine industry.  Quite a few countries saw a sales drop of almost 50% in just one year. It took 10 years to recover. The present situation is unexpected to say the least but when you think of it it’s quite natural.  You can’t travel so you come up with things to do in your home grounds. Summer houses almost sold out, so did boats too.  But not quite.  Even though the demand is high and unit registrations are up by 33 % in the first 5 months in Finland there are boats available.   The increased demand has mainly occurred in smaller power boats.  In this country it means in and around the 5 m range and 50 hp engine.  The effects of the pandemic are not seen in the sailboat business, at least not yet.  New sailboat deliveries before the 2008 crisis were in the level of 200 units in Finland.  In the last few years, and even this year, the sales may go up just to 20 units.

After a few phone calls to manufacturers and meeting with a few dealers, they really struggle with deliveries as everybody wants to have their new boat for Midsummer (end of June here).  The crazy staycation phase started already last year with registrations up by 17 %.

Now let’s stop here for a while. 50% of Finnish population is vaccinated by now.  The writer already has both jabs.  Last winter I did not get to spend the winter months in Spain as planned but now our flights are booked for early October.  And I firmly believe I am not alone.  The long built-up urge for travelling will eventually start to unravel.  This need is built in the nature of the present day individuals. Now we may ask what will happen with the domestic recreational investment boom. It will slow down and that’s only natural. We will, at the end of 2022 and in 2023 start descending to 2018/2019 numbers.  After looking at the financial results of some companies even in these extraordinary good times it makes you wonder what has been done wrong.  I do not wish to start speculating on the reasons, there may be quite a few.

So where do we go from here in terms of building up a sustainable future for the industry? In good times it is just so easy to forget or simply put aside all “unnecessary” marketing costs.  The fact remains that without a continuous and heavy enough investment in promoting boating the future will not be all that bright.  The sustainable growth evolves from long lasting and cleverly targeted campaigns that are not planned just for one season.  They need to be on all the time.

One may also ask if the products the industry offers to the market represent the expectations of the present-day consumers in style, design, usability, connectivity and resale value/plan.  There are plenty of really good examples where all this has happened.  Unless we carefully monitor and evaluate the rapidly changing buying and other habits of the consumers, there is a danger that we will start losing people to other hobbies. This danger is evident especially in countries where the season is limited to just a few months.

This leads me to discuss a subject always on the lips of the industry: the boat shows. The shows are often seen and discussed just as an expenditure.  This is, in my experience, a false approach.  In Finland the main boat show is visited by 70.000 – 80.000 potential buyers (note: some 7.000 – 8.000 new boats are sold annually).  Every 68^th Finn visits the Helsinki International Boat Show.  How good is that.  Very good. It’s a world record of visits per capita to a boat show. Things keep changing though. The pandemic year has taught many of us skills to compensate the physical shows with virtual ones.  This has been an attempt to keep the boating discussion alive.  Will these replace the physical boat shows.  I do not think so. Boaters always want to come, feel and experience.  The show here is a real start for season.  So, yes, it will come back.  And will return with a bang.  But, no doubt, there is an evident need for improvements and changes. The industry/shows will need to engage the public. A potential boater’s journey will very likely begin at a boat show.  And the organizers have a responsibility to facilitate that. Education and boating community participation need to be enhanced.  The consumer needs to leave the show with a positive mindset that will at the end of the day turn them to a life-long boater. On-site activities including entertainment and restaurant services will grow in importance. Virtual exposure is here to stay so the show producers need to invest more in new types of pre-show communication.

Boating and boat shows will both have a bright future. We just need to rethink how shows should be constructed in the digital era.  The industry needs to acquire more knowledge and make use of that.  They need to be ready for even radical changes.   The industry also needs new people who can carry out the needed changes.

Dr Jouko Huju DBA, GMBA-Finland
+358 40 5509310
jouko.huju@gmba.blue

Disclaimer: Global Marine Business Advisors and its associated website www.gmba.blue are not registered legal entities. GMBA is a network of independent marine industry advisors. In all articles the opinions expressed are those of the author and does not necessarily reflect those of GMBA