From the Lighthouse
Customer Support #1
A major component in our Northpoint DNA is to always seek ways to best support our customers. We recognize that the basic tenent of a flooring partner is to enable the success of its customers. As we move into 2024, that focus continues, and remains top of mind.
Here’s a recent case in point.
In early Spring 2023, the Northpoint Team recognized the slowing of inventory turn in the marine portfolio. With the direct advantage we enjoy of regularly accessing our RV portfolio which had gone into a recession 9-12 months earlier, we were able to discern and validate the changing market landscape. We made a strategic decision to alert our marine dealer partners regarding this trending development.
At the time, OEMs had finally been able to access materials and parts that had been scarce during Covid. Some OEMs rolled full speed ahead and failed to grasp the changing market conditions. Some believed that due to previous inventory shortages, marine would most likely not be impacted by the slowdown. Still, other OEMs were more cautious and cut back production.
On the retail front, we recognized some dealers were still working to get higher credit lines to accommodate the orders committed during the beginning of the ’23 model year. Many were unaware of the slowing market.
As we have a pulse on the marketplace and observed these conditions unfold, we asked ourselves: what is our role as a trusted floorplan company? Should we provide our customers with the same insight that we use internally to successfully support not only our business, but also our customers?
Northpoint made the decision to leverage all of our sales, marketing and communication support channels to communicate with our customers about the potential coming storm.
While floorplan is a small voice in the overall production symphony involving Marine, RV, Manufactured Housing, Power Sports, and Trailer segments, we made the decision and charged our team to deliver the news and latest data to our dealers. We wanted our valued customers to clearly understand the potential impact in cost in curtailments and aged inventory rates we know can impact a business’s cashflow. We provided a free forecasting tool developed by our team to help dealers analyze the direct impact to their cashflow.
Historically, Northpoint has tailored dealer’s programs including both rate and curtailments, resulting in variations of curtailment programs with some including curtailment skips while others did not. To help our customers, our team agreed that this was the time to implement a Seasonal Skip of curtailment program. Our process remained a methodical approach of measuring the equity in the inventory versus the marketability of the boat. In addition, we accounted for dealer performance and credit risk in the equation.
Curtailment skip requests began hitting us in early September ’23 and we began working through the process to approve and implement the updated programs. Based on the large quantity of requests from our customers, we realized that dealer’s cash was running tight and they needed a lifeline to reach boat show season. The hope was that the selling season would bring the consumer back to the dealerships to purchase this excess inventory.
In retrospect, the good news is that we collectively weathered the storm and successfully achieved the objective, delivering on a majority of the requests which delivered cash flow and a lifeline to many dealers.
Northpoint responded and has adopted a new policy as a result of this experience.
We will continue to keep our valued customers informed regarding market conditions. As a result of the reevaluation of our custom programs, we have designed and implemented a three-month curtailment skip program for the months of January through March beginning in 2025.
Northpoint listens. Our customer needs matter. Northpoint remains 100 percent committed to supporting our customers. We hope you will agree: together, we are stronger!
