Tag Archives: AirBnB

The Perfect Storm, Part 2. Fixing “Pale, Stale and Male”

  • The mood at last week’s Miami Boat Show was sunny, like the weather.  Enthusiastic shoppers, lots of shiny new boats, and based on conversations with manufacturers, not enough new boats to meet demand.

Miami Show Crowd

However, as previously posted, some clouds on the horizon foreshadow the powerboat industry’s vulnerability in a way that will redefine the landscape over the next 10 years.

  • The core buyer base is aging. The 55-60 year old buyer base (let’s generalize and call them Boomers), are committed and usually repeat buyers.  And they look a lot alike  (in the words of one industry executive: “pale, stale and male”).
    But there aren’t enough younger first-time buyers (generalized as Millennials) to replace their unit or dollar sales.  Over the last 15+ years, the share of new boats sold to first-time buyers has dropped dramatically.
    It’s the same old dudes buying more boats.
  • Recession bites. The next recession, like the last one, will flood the market with used boats when owners sell, crushing new boat sales – – a sales circuit-breaker if enough Boomer owners exit the market permanently.  Remember, older buyers generally buy the more expensive boats.
Older fisherman

Typical core new boat buyer

This post tries to explain why there are not enough younger boat buyers, and offers some ideas of what can be done to prepare for the future.  While a bit longer than my typical post, there are lots of pictures, so please read on.

Boater_Age_NMMA

Source: NMMA

Following our Miami visit we circled back to get input from senior leaders representing manufacturers, dealers, Freedom Boat Club (the leader in this segment) and the NMMA, the leading trade association.

The upshot:  the core appeal of powerboating is not going anywhere, but the industry will need structural changes to address some fairly major challenges to sustain health (read: sales) over the long term.

And the current pace of innovation is not enough to drive the changes necessary.  Disruptive innovation is needed in everything from boat design, mode of power, sales/distribution channels to marketing.  This is not about reducing price or offering new colors or more horsepower.

Disruptors transform the way a basic demand is delivered.  Myopia has led to the downfall of many former market leaders.

  • Home Video: Blockbuster (VHS/DVD) yields to Netflix (streaming)
  • Personal photography: Kodak (film) yields to digital / smartphones
  • Books: Borders (bricks & mortar) yields to Amazon (online)

Based on appearances, the powerboat industry seems headed this direction – – focused on maximizing revenue with the current model (largely fiberglass gas-powered outboard boats sold through dealers).

There are signs that disruptors are at work — but there is a long way to go.

Buying Cycle - Boating

To explain where the industry has been and where it needs to go, we compared the buying process of legacy (Boomer) core buyers with considerations of potential Millennial buyers, in a 4-step process.

INTERESTEXPERIENCEPURCHASEHABIT

So what are some paths to long-term growth? 

Here are some ways the industry can take action (with some examples):

  • Before addressing new buyers, the industry must keep current owners around as long as possible.
    Slow down defections – – aggressively court current owners and build relationships through CRM, owner events and personal outreach – build loyalty and maybe get another purchase

To encourage Millennial first-time buyers:

INTEREST

  • Accelerate development of more agreeable, alternative power sources:
    • GM’s experimental marine division, Forward Marine, introduced a 100% battery-powered boat. With a max speed of 20mph and a range of 1 hour at that speed, it’s not ready for prime time yet, and won’t get you many dates, but this is the direction some of the industry will go.  Think Tesla.  Maybe a hybrid as well.
GM Boat

GM Forward Marine prototype

  • Indmar just introduced EcoBoost, the marine version of Ford’s EcoTec engine – gets the same horsepower and torque with 4 cylinders as a typical V-8. More environmentally friendly.

    EcoBoost

    Indmar EcoBoost

  • Torqeedo is an established German company offering quiet, efficient electric motors. Due to relatively low gas prices and a maximum of 100 hp, growth is slow but it is steady.  They’re getting traction.
Torqeedo

Torqeedo Deep Blue 80R

  • BlueGas Marine has developed economical natural gas power for boats. Traction is difficult for the above reasons as well as infrastructure (need the gas equivalent of charging stations), but the equation can change quickly if oil prices spike.

More aggressive marketing

  • Cross-market! Boating should not just be for insiders anymore!  Visibility must be increased by pursuing prospects with related affinities:  skiing, hiking, etc.  Not just a booth at the boat show.
  • Be more inclusive, diverse and experiential. Feature a range of age, ethnicity, interests.  Leverage social media to reach prospects beyond the familiar core demographics.

700-00039414

Wakesurf photo

 

  • Innovate beyond current offerings – materials, design, features
    • New boaters don’t have the burden of tradition and will likely be more open to unconventional but more functional approaches (after all, someone had to buy the first Prius)
    • RIBs – Rigid Inflatable Boats (Axopar, Technohull) offer more efficient performance using different hull design and materials. They are really cool, perform great, look different, and that’s ok.
Technohull

Technohull (top); AxoparAxopar

  • Powered catamarans look different but offer advantages of smooth ride and more space

EXPERIENCE

Leverage technology to reduce fear as a barrier to purchase

  • Self-docking boats will be available in 2020
  • On-board digital video tutorials can provide much more effective learning than paper manuals
  • Controls are shifting from analog to digital, to mimic/integrate with smartphones

 

 

OWNERSHIP

  • Offer more versatile/multi-use boats at attractive price points – not single purpose (e.g. fishing) but can handle a variety of activities on any given day (analog: SUVs), making purchase more acceptable
    • Sea-Doo introduced a jet ski that converts to a fishing craft – – and it starts at $15k

 

 

  • Yamaha’s 2018 Boat of the Year (the FSH 210) is an affordable, do-it-all boat that is an excellent choice for first-time boaters.
  • Don’t require purchase to participate
    • Freedom Boat Club is a franchisor with 178 locations, with a model based on eliminating some key barriers to purchase (includes lessons, takes care of maintenance and insurance). The goal – make participation frictionless.
    • Members pay a monthly fee for unlimited access to a variety of boats in a huge number of locations, rather than committing 6-figures for a single boat.

FBC logo

  • Other similar models such as peer-to-peer rental, fractional use, etc. will undoubtedly increase as there is less reliance on solely purchase
  • More fully integrate the internet in the shopping/buying process – as in the auto industry, reduce reliance on aggressive final-mile dealer salespeople.

HABIT

No surprises!

  • Full transparency in the sales process, specifically costs/ obligations of ownership
  • Continuous on-boarding/learning  from the dealer, not just 2 hours when the boat is picked up
  • Aggressively encourage new boater networking to share tips, experiences, and create peer communities
  • Mentoring programs linking experienced boaters with new boaters.  Older boaters would love to pass along insights; a no-judgment setting makes it a win-win.

Mentor

These are just a few things the industry can do to mitigate unavoidable changes.  It will take foresight, patience, and investment – – and may not pay off immediately.

lots-of-boaters.jpg

But an industry that proactively and creatively adapts to the needs of new boaters with great product and a great experience, will be much more successful than what we currently seem to have – – an industry that asks potential new buyers to adapt to the way things have been.

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The Pain of Not Having Hand

Posted on

Don’t you hate it when you want your money back and have no leverage?  Explanation of this (and ‘Hand’) follows.

This is about companies who put barriers in place to enable them to hold onto your money until they wear you out.  A war of attrition.  Things like unreachable customer service, phone personnel with no names who cannot be recontacted, endless phone wait times, etc.   We’ve all been there.  Some of you are probably on hold with someone right now!

My goal is always to have a ‘So What’ in my posts but other than stopping transacting altogether, I am not sure how to preemptively protect against this!  So I’m open to suggestions.

So that’s your challenge, dear readers.  For the good of humanity, help us find a solution.

The basic model has been around:  exploit human nature.

gift cardskitchen junk drawer

It used to go something like this: you get a gift card and the issuer gets the revenue and records future redemption as a liability. You put it in the kitchen ‘everything’ drawer next to your frequent shopper cards from 1995, never redeem it, company books revenue with no expense. Nice! Called ‘breakage’ in accounting, commonly known as ‘slippage’ in consumer goods.  Coupons are issued, people don’t bother redeeming, etc.

This new version is more insidious and aggravating. As George Costanza might say, we have no hand!  And they know it!

Here’s how it works (examples below):

  • You transact something online
  • You provide payment via credit card
  • Something goes sideways, not due to anything you did
  • Supplier has your money, and very little motivation to give it back
  • You now spend considerable unplanned time and energy fighting with the supplier to reclaim your own money

Case study 1: Booked AirBNB for about $1600 for a week; they (and owner) got payment in advance. Upon arrival, property has significant water leaks, which are being repaired, rendering it uninhabitable. AirBNB is contacted, situation explained, they offer $400 refund afterward and refuse to discuss the matter further.  Boo, AirBNB!

Case study 2: Rented car with GPS. GPS didn’t work. Took over an hour and several emails just to get back the $30.  Boo, Fox Car Rental! 

Case study 3: Moved across the country. $17k total bill, which required payment in full ahead of time (apparently this is standard operating procedure, which is itself worthy of a separate conversation). Move happened 3 days late, which created additional expense for friends who flew in to help with the move, and which technically qualified as a ‘late delivery’ by the mover.  Several items broken. After huge effort and many hours and emails, result was a check for $20 we got in the mail. Zero hand in this one.  Double Boo, North American Van Lines!

Case study 4: WSJ inexplicably stops being delivered one Friday. Go to handy online notification area but service is down. Chat is not manned yet (it’s before 8). Phone line also not available. Paper doesn’t come on Saturday either, make several online entreaties to both email and chat. Now start getting 2 (identical) papers on Monday. Issue finally settled on Tuesday.  Boo, WSJ!

I could go on.  I’m sure we all could.

In fairness, these infuriating episodes are balanced by the transparency and customer satisfaction focus of many excellent online retailers, who understand something about customer satisfaction and loyalty.

In all of the cited cases the supplier messed up, but the burden was on the consumer to spend the significant effort to (maybe) get a satisfactory reimbursement.  There is no Online People’s Court to help resolve these issues.   I personally resent having to spend precious time just to claim what is mine in the first place!

Sure, over the long haul corporate reputations can be harmed, penalizing bad behavior.  But I don’t want to wait for the long haul.

How can we fix this?

Battle of the 2017 Super Bowl Ad Reviewers

Battle of the 2017 Super Bowl Ad Reviewers

Last year The Armchair MBA presciently foreshadowed our country’s potential slide into anarchy – – and we take no pride in noting that we appear to have been right.

Be that as it may, this glass case of emotion that we call the US must go on, and of course the Super Bowl is still the tentpole of our national identity.  So in the spirit of national unity, we herewith put forward our ratings and reviewer compilation of the advertising from this year’s Brady Bowl (or as some might call it from the Falcons’ perspective, the choking chickens Bowl).

super-bowl-montage
And as a perfect reflection of society, there is very little agreement among the dozen major reviewers we looked at.  This year we’ve added a feature of averaging the critics’ scores so you can see how YOU stack up.

At the bottom of this post is a chart comparing major reviewers for all the spots run during last Sunday’s game.
NOTE: ads are grouped by my rankings of green/yellow/pink and are now ranked by the reviewers’ average within those groups.

A few observations (all Super Bowl ads can be found here):

NO ANIMALS THIS YEAR!  Unless you count the dead (Spuds McKenzie), the 2-dimensional (Yellow Tail wine) or the sidelined (Rob Gronkowski).  I miss these furry diversions and was hoping the lack of reliance on a lowest common denominator would indicate lots of great spots.  Alas, twas not to be.
But there were some themes at work…

itsa10

High concept does not necessarily make for great advertising. The Armchair MBA is not a fan of co-opting a high-minded theme just to make a statement- often comes off as stilted or forced.
– Audi, 84 Lumber, Budweiser, AirBnB, and It’s A 10 Haircare (I know – who, right?) all went for the high road by tying into the topical (often sideswiping the President, the Real DJT).
Unfortunately, for this image-driven work to be effective it needs to create a strong link to the brand among a group that might be interested in the product (this is advertising, after all).
– It’s A 10 Haircare is a new brand and while their ad was cheeky and visually interesting, they could have done more to tell us why we should care.
– 84 Lumber is a regional competitor to Home Depot and Lowe’s and ran an emotional immigration spot that, partially due to network censorship, required a visit online to see the conclusion.  The average demo for this vertical is male/50, not necessarily a strong bet for following up online or changing their go-to building supply outlet without a reason. It did generate brand awareness, though.
– Audi made a passionate pitch for gender pay equality (with no apparent reason given for why this is related to Audi), then undermined the message by putting Dad (not Mom) in the hot sports car.

walken-timberlake

You simply cannot go wrong with Christopher Walken. He did it for Kia Motors last year, and this year changed sponsors to team with a deadpan/mute Justin Timberlake for one of the best-received spots – for Bai Antioxidant Drink.

mccarthymalkovich

Actually, celebrities were out in force, probably to the greatest degree ever, and generally to good effect.  In this high-stakes, high-octane environment, celebrities provide one of the only reliable ways to guarantee eyeballs. In addition to Walken:
John Malkovich’s arresting visage gave Squarespace breakthrough
– The Coen Brothers directed a Mercedes-Benz spot featuring Peter Fonda
– Kia traded Walken for Melissa McCarthy (and a few draft picks) for a generally entertaining spot for the new Niro
– A newly nerdly Justin Bieber drew attention for T-Mobile in his own polarizing way
– Other celebrities included Terry Bradshaw (Tide), Cam Newton (Buick), Kristen Schaal (T-Mobile), Lady Gaga (Tiffany), Martha Stewart and Snoop Dogg (T-Mobile), LeBron James (Sprite), Morgan Freeman (Turkish Airlines), Tom Brady, even Bill Nye the Science Guy!  And the list goes on (including a slew of very amusing high school yearbook celebrity photos in a Honda spot).

honda-yearbook

Generally well-accepted spots had breakthrough and were straightforward (usually with some humor)
Honda, Bud, Avocados from Mexico, Skittles, Ford made this list.  Inexplicably so did a Bud Light spot featuring an exhumed Spuds McKenzie.

bieber

There were also some universally unloved spots, mostly due to lack of wit, relevance or originality.
American Petroleum Institute (paaaarrrty!) headed this list, followed closely by the generic twins Fiji Water and LIFEWTR, Yellow Tail Wine, KFC and Michelin.

Finally, our annual check-in with Weather Tech – for this, their 4th effort, they did kick back and have a beer (not while driving) and the result was a looser, more fun spot.  Well done.

This table compares 12 major reviewers, who clearly do not all see things the same.  (did you really expect Vogue to feel the same as the WSJ?) 
Simply click once or twice on the table
 to make it readable.

superbowl2017

Footnotes:
My evaluations are generally based on the Kellogg ADPLAN approachAttention
–Distinction
– Positioning
– Linkage
– Amplification
– Net Equity – – along with some personal gut feel.

Reviewers and links to reviews (if you were involved in any of the reviews and feel I got something wrong, let me know):
Kellogg Graduate School of Business – Northwestern University
Adweek
Ad Age
Bleacher Report
Chicago Tribune
Entertainment Weekly
The Guardian
New Yorker
USA Today
Variety
Vogue
Washington Post
Wall Street Journal

That’s it for this year – – as always, with The Armchair MBA, you get what you pay for!

Plus, I want that new Alfa Romeo.

See you next year!