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More than two-thirds of the planet is covered in water. So when the COVID-19 pandemic turned life on dry land upside down, many sought refuge from the world’s turmoil on a boat out on its oceans, seas, rivers and lakes. Exploring those watery expanses aboard a vessel, big or small, offered a special way to escape the germs, the crowds and the restrictions.
Little wonder, then, that boat sales soared during these unusual times, particularly in North America. It’s an increase that boat dealer MarineMax certainly noticed, with its own business spiking over the pandemic period to deliver record sales, profits and margins.
“When the pandemic hit, things were unknown for a couple of months, and then all of a sudden, people wanted to be out on the water with family and friends.”
“When the pandemic hit, things were unknown for a couple of months, and then all of a sudden people wanted to be out on the water with family and friends. It was something they could do,” President and CEO Brett McGill tells The CEO Magazine.
“Really, from that period on, we saw so many people enter boating for the first time, or re-enter boating after a long time being away.”
While many predicted that the craze would swiftly fade and newly purchased boats would quickly fall out of favor, McGill says the reality is that the majority of new boat owners gained a real appreciation of their new hobby and decided to stick with it.
“Even if it were just half, that would be great for our industry, which has always struggled to bring new people in,” he reflects. “But in recent times, people were exposed to new things, or new experiences.”
The return of weekend sports games and worldwide travel has done little to dampen this newfound zest for boating, according to McGill. “We look at our fuel sales and our marinas, we watch people’s activities, and our getaway events continue to be booked and sold out, so people are still boating,” he says.
However, he admits that some are opting out, as the routine of normal life resumes. Rising interest rates are also impacting sales, starting at the lower end of the spectrum and gradually creeping up into larger boats.
But this ebb has not impacted MarineMax to a great extent, thanks in large part to its long-term emphasis on diversification.
The business had learned valuable lessons during the global financial crisis of 2008, when plummeting sales encouraged MarineMax to add a few more strings to its bow.
“We decided to get more into marinas, bring higher margin businesses to the company and be less reliant on just boat sales, although that’s still a big part of our business,” McGill explains.
Acquisitions have played a vital role in this strategy, with MarineMax adding some boat dealers in the United States to its portfolio over the last couple of years, as well as offering additional superyacht services to the mix.
Most significantly, in 2022 it purchased the world’s largest superyacht marina network, IGY Marinas, in a US$480 million deal.
“That was the most transformational acquisition in our company history. We now own and operate some of the largest superyacht marinas in the finest destinations around the world,” McGill reveals.
“Now we have somewhere for people to go with the larger product. We were in the marina business, then we decided to go out and see what we could do to offer more for the superyacht customer.”
IGY Marinas has 23 facilities, including in European locations such as Porto Cervo, Portisco, Cannes and Sète. In the Caribbean, it has a presence in Saint Martin, Saint Lucia and Saint Thomas, with another facility in Cabo San Lucas on the edge of Pacific Ocean.
This broad network means MarineMax can now offer its superyacht customers a seamless experience, using just one platform and providing them with a service that more customers would want to use.
While the deal required a hefty outlay, McGill is confident it will deliver a major source of income over time.
The company has added a few more subsidiaries since then, including a small dealership in Minnesota, but its main attention has been on bedding down its 16 acquisitions since 2019.
“We took a deep breath, partially because interest rates were rising and the cost of capital was going up. So we are just looking at efficiencies within the company while trying to plan for the future,” he says.
“We now own and operate some of the largest superyacht marinas in the finest destinations around the world.”
MarineMax expects to see more customers taking up its offerings, not only with IGY Marinas, but also with its Fraser Yachts and Northrop & Johnson brands, as it tries to fill a gap for customers at that end of the market.
“It’s about continuing to enhance, that so that if you own a 50-meter boat, you can come to us and we have all the services you’d need,” he says.
“Your captain knows that you can have a slip at each of these marinas in the hottest or the best times of the year. We can provide management of your yacht, we can provide crew placement and the list goes on and on. If you want to sell your boat, charter your boat, buy a new yacht, we’re there for you.”
Beyond that, the company remains focused on growing its boat dealership business, which accounts for a substantial chunk of MarineMax’s business. Worth almost US$2.3 billion in revenue, the dealerships showcase leading brands such as Aquila, Galeon, Grady White and Azimut while also being the world’s largest retailer of Brunswick Corporation brands, including Sea Ray, Boston Whaler, Harris and Mercury Marine.
“Then we have our manufacturing business where we build the innovative Intrepid Power Boats and Cruisers Yachts, and we’re going to continue to grow that and focus there. There might be some additional growth strategies in the manufacturing arena, and in terms of our boat dealership marinas, we’ll keep looking at that,” he says.
When McGill contemplates the record sales of the past few years, he is matter-of-fact. “We really can’t take credit for all the boats we sold. I mean, it was just a crazy dynamic,” he admits. “We have great products, which brought people to us, but it’d be hard for me to say, ‘Oh, we did such a great job selling all those boats’.”
However, where MarineMax did excel was in delivering an exemplary customer experience to those it did business with – something that has positioned it well for future growth.
“I am most proud of our net promoter score, which went up every year, and it’s at a record level,” he notes. “It wasn’t easy to keep every single customer happy. More than that, we’re exceeding their greatest expectations.”
Every meeting that takes place at MarineMax involves a discussion about its net promoter score (NPS), which measures its customer satisfaction. McGill and his team refer to it as their ‘FANS score’.
“We know that this is how you get future business,” he says. “You’re not going to go to a hotel, have a bad experience and go back. You’re just not going to. And so we took that same philosophy.”
Particularly in the face of supply chain constraints over the last few years, with many new boats just not arriving on time, excellent customer service has been essential from a satisfaction perspective – and it seems to have worked.
MarineMax now benchmarks its performance with an NPS of 80. “Many world-class companies are at 37, so to have a fan score of 80 is beyond world class,” McGill says. “But internally to our company, that’s our benchmark. Because you can’t buy a million-dollar boat and have it go just OK.”
This is where MarineMax’s approach makes all the difference. Rather than simply acting as a vendor, the company sells an experience, McGill explains.
“We don’t just sell boats,” he stresses. “We’re blessed to have some of the finest manufacturers and products available to us, but they come to us because we offer the entire experience and an easy way to get to that experience.”
It helps that it’s an experience that displays well, with social media making it easy for boat owners to illustrate the virtues. Kenyon Grills often teams up with MarineMax for social events that showcase the best of both brands to help boat owners make the most of their time on the water.
“We’re blessed to have some of the finest manufacturers and products available to us, but they come to us because we offer the entire experience.”
“Our customers are very well off and they want to know that when they show up on Friday with their family, the boat’s going to work. It’s going to be ready to go, sitting in our marina. We’re there to help them if they need it, so they can go to the Bahamas without any stress.”
MarineMax’s prioritization of a diverse portfolio over the years places it in the perfect position to provide a one-stop-shop solution to its customers, thus enhancing their experience.
It’s a strong position to be in, which is important during these turbulent times. “The biggest challenges for us are obviously the things you can’t control. Economic or sociopolitical unrest is not good for anything,” McGill says.
“But we know this: people don’t just decide they don’t like boating because things are tough. They might spend a little less, they might not go on such long trips, but they’re still in love with boating.”
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