The famous criminal Willie Sutton was once asked why he robbed banks, and his response was simple, eloquent, and humorous:
“Because that’s where the money is.”
I remember the day I finally found out where the money was in business. I was having a conversation with my mentor when he suddenly said: “You know Vince, there is absolutely no correlation between being good and getting paid, but there is a HUGE correlation between being good at sales and marketing and getting paid.”
It was like time had suddenly froze. I realized how much effort I had wasted focusing on things that didn’t really matter for my business. From that day on, I decided to become a student of sales and marketing.
Now, when we talk about sales and marketing, this is the real problem: The rules of sales and marketing have completely changed over the last few years.
In fact, according to Mary Barra, CEO of General Motors, “Sales & Marketing Has Changed More In The Last 5 Years Than In The Last 50.”
As a result, if you don’t adapt the way you market your products to the way people buy in 2019, you’ll face extreme difficulties!
Let me explain:
A few years ago, customers were doing 33% of the research on their own and 67% of their buying journey was done with the help of the salesperson.
The game has changed and today’s customers are doing, on average, 85% of the research on their own (via the Internet) and the 15% remaining with the salesperson.
What does this change mean to you?
Marketing now counts for 85% of the buying journey and represents the core of your business. If things are not working for you, it is probably because you are stuck in “The Old Model” and haven’t moved to the highly leveraged, profitable and predictable “NEW Model.”
You are still acting like it’s 2005. Just like an ostrich with its head stuck in the sand…unwilling to admit that your market has dramatically changed.
Here is how marketing has changed:
When the USA had only 3 television networks, it was easy to reach a large amount of prospects and get exposure with a single commercial. When the majority of the American households started subscribing to newspapers or tuning into local radio, it was also easy to reach them with few targeted media campaigns.
Those days are over.
Prospects today are spread around thousands of different channels (tv, cable, radio, publications, websites, social media, YouTube, podcasts, magazines, newspapers, apps, etc…)
Let’s take TV for instance:
From 1977 to 2015, the number one TV show in the US went from a rating of 31.5% to 7.3%. That is a 200% drop in exposure!
This massive drop didn’t only happen in television but on all other channels available today.
I was talking to a journalist from IBI at the last Dusseldorf Boat Show and he told me that there are over 350+ magazines and thousands of marine boating websites in our industry right now. Consumers are volatile and focusing on a couple of traditional marketing channels is nothing else than a guarantee for failure.
You Are Competing For Attention!
Consumers are bombarded with information on a daily basis and their attention span is becoming shorter and shorter.
A few years ago, an average consumer was exposed to 300 to 500 commercial messages a day. Today, we are averaging nearly 5000 per day or 1.6 million per year. If you think that a couple of tweets, emails or magazine ads every month is enough, you have to reconsider your entire strategy.
It has never been so challenging to captivate the prospects’ attention and compete in the marketplace. Traditional communication channels such as TV, radio, newspaper, magazines, etc. are becoming fragmented and obsolete.
The fastest and easiest way to spread your product is to leverage super-platforms. They literally communicate through hundreds of millions to billions of people!
Let me show you the benefits of the super platforms below:
Super platforms don’t only offer nearly 10 times better CPMs (cost to reach 1000 people); they also offer a much better targeting option, which makes the results exponentially better. They also offer the ability to track interested viewers so you can retarget them. You can also upload your entire email database to them and reach your prospects or clients directly.
So my goal today was to bring awareness on the dangers of traditional advertising methods. They are just not providing enough ROI anymore to keep your business afloat.
Let’s review some of them for example:
At the last Fort Lauderdale boat show, I was talking to the president of one of the largest brokerage firms in the industry. He was telling me how results at boat shows are not what they used to be:
He said: “10 years ago when we were bringing 10 boats at a boat show we were able to sell, on average, 8 of them. Today it is more like 2 out of 10.”
Another example came from a conversation I had a few months ago with a friend and CEO of a well-known yacht company. He told me that he remembers the days when they had an article or an ad published in a new magazine. They could see the difference from the day the magazines hit the stands as the phones were ringing much more than any other day of the month. But today, they don’t notice a difference anymore as prospects are volatile through hundreds of different channels.
It is even the same for multiple listing sites. Let’s look at Yachtworld’s data for a moment.
In their media kit, Yachtworld reports that they have 112.379 listings, 3 million visitors monthly and receive 45k leads per month. They also reported 2,443 boats sold during the month of March 2016.
What does all this data translate to?
At this rate, and based on their number of listings and monthly sales ratio (around 2%) you would need approximately 50 months or nearly 4 years to sell an average listing.
Now let me make things clear, I am not sharing my personal opinion but simply observations. I have nothing against boat shows, Multiple Listing Sites or magazines, and I am not saying that you should stop using them. I think that they are necessary in our industry as long as you don’t rely on them solely and invest your marketing efforts in super platforms and digital marketing.
The decline of those traditional marketing channels could be explained by a fundamental law in marketing called “The law of the shittiest clickthrough.”
I heard about it for the first time while reading a fascinating article by famous growth hacker and venture capitalist Andrew Chen. The article was called “Growth Hackers Are The New VPs Of Marketing“
The law of the shittiest clickthrough states that the effectiveness of new marketing campaigns will significantly diminish over time.
For instance: The first banner ad on HotWired’s website in 1998 debuted with a clickthrough rate of 78%. Today, an average CTR on a banner ad is 0.05%. This law can be applied to offline marketing too. Remember the 200% drop in TV ratings we discussed earlier. Now the converse of this law is that if you are the first to market on a new channel, you can get amazing results and ROI because of the novelty and lack of competition.
Once you take advantage of this law, you can get amazing results.
The average advertising expenditure per capita in the USA in 2016 is $548. With so much noise, spending money on brand awareness towards people who will never buy your boat is the most ineffective thing you can do in 2019. Too many yacht builders still focus too much on brand exposure. It might have worked 10 years ago, but the consumers are exposed to so many messages today that it is a waste of money.
It is essential to focus your marketing efforts on reaching your desired targeted audience and then focusing on building relationships, sales and referrals. Once you have identified qualified prospects or audience, you can use retargeting or remarketing to build your brand awareness.
So while it has never been so challenging to be heard and get some attention from your audience, it has also never been so easy to target prospects.
Use technology and super platforms to your advantage and always remember that boat sales is usually a very selective market so: Don’t count the people you reach but reach the people who count!
— Vincent Finetti
Founder & Instructor
Yacht Sales Academy
P.S. Try a listing strategy from my FREE Listing ebook here.
P.P.S. I’m doing an exclusive virtual Listings & Sales Workshop with a small group next month to go deep in applying my best strategies to your brokerage business.
Would you like to join us? If so, go here and enter your name and email for more details!
P.P.P.S Check out my client results here.