We’ve heard anecdotally over the past few months that many of those customers who have purchased boats this year are first-time buyers. And new data is showing that is, in fact, the case. More than one-third of those who have purchased new and pre-owned powerboats this year are first-time boat buyers, Info-Link has confirmed.
The thought is that as people are still living socially-distanced lifestyles without vacations, a boat is that getaway we all need, a place to get out on the water, away from others, remove the mask and watch something other than the TV, as highlighted by this recent Associated Press article.
While first-time boat buyers are coming in at a higher clip than they have been since about 2014, the concern still lies that we may lose those boaters going forward, as their regular activities, lifestyles and vacations return. Looking at the Info-Link First-Time Boat Buyer purchasing chart, you’ll see that the industry averages about one-third of sales to first-time boat buyers.
But the issue is in the second chart here. When we look at the five-year attrition rate — how many buyers remain in the sport within five years of buying at boat —we’re losing 42 percent of first-time boat buyers before they hit that milestone. Forty-two percent! So what good is it bringing in new buyers, if we’re not going to keep them? All we’re doing is using our funnel to refill a bucket that has a big hole in the bottom of it.
That’s why we all need to be focused on the customer experience, as we have been with Operation: Keep Your Customers Boating. This isn’t a new problem — it’s something NMMA, Discover Boating, MRAA, Info-Link and others — have been discussing for at least the past few years, but it’s an issue that has really been brought to the forefront by the number of sales that have occurred in 2020.
If we want to build on the momentum we’ve built this year, we have to help our customers by showing them the boating lifestyle is THE lifestyle they want to be a part of, and a boat is something their family just can’t part with. If you look back at the Operation: Keep Your Customers webpage, you’ll see there are a variety of ideas to drive a positive customer experience, and the list of things to do may seem long, but the data shows that effort pays off. Once you get the customer to buy a second boat from you, the five-year attrition rate shortens to 24 percent, then down to 18 percent and 12 percent as they continue to buy, for an average of 19 percent for boats two through four.
As Jack Ellis, managing director at Info-Link shared, “One certainly can’t expect a 19 percent attrition rate for FTBBs (first-time boat buyers), but the information on this graphic suggests that it’s perfectly reasonable to think we could improve the attrition rate a bit. There are currently about 400,000 FTBBs each year, so if we could improve retention by just 5 percent, this translates to another 20,000 people we could keep in boating each year, rather than have them run off to a different activity.”
Converting those first-time boat buyers into second-time boat buyers is the key to plugging that hole in our sales bucket. Let’s, as individual businesses and as an industry, do what we can to fill that hole by improving our customer experience.