A Conversation with Paxson St. Clair
Cobalt C.E.O. Paxson St. Clair sat down last week for a chat about the company his family has guided for more than forty years. His thoughts about the remarkable people who build and sell Cobalts stand close to the heart of every answer below.
Q: Let’s talk about boating in general and Cobalt in particular set against the national and world economies, where recovery has been weak and sporadic at best. How has Cobalt responded to the difficulties imposed by an uncertain economy? How has Cobalt fared in comparison to competitors? Does the upper end of the market – the premium brands such as Cobalt – seem to be holding its own better than the lower end? Or vice versa?
St. Clair: It’s no secret that purchases of discretionary products take a hard hit in a down economy. A boat ranks down the buy-list a bit for families working so hard to make ends meet. That said, we’ve been fortunate in our position at the high end of the market where the hit has been less severe. As a matter of fact, Cobalt has been gaining market share in these tough economic times.
In large part those gains have come as a direct result of our dealer network, an assembly of people who genuinely care about their customers, before and long after the sale. One of the principal consequences of the downturn in the marine industry has been dealer fallout; many dealerships have simply gone away. Cobalt has lost very few dealers, a testament to the quality of the service and personal attention those dealers give to every Cobalt owner.
Q: Cobalt has always taken special pride in the company’s openness to owners’ opinions. What are you hearing from Cobalt owners these days, both from longtime owners and recent purchasers .
St. Clair: Feedback from our owners has always been a critical conduit to the design of successful boat models. All of us at Cobalt are boaters. We’re out every weekend, looking for ways to improve our products. Our owners too are passionate about boating, about their Cobalts, and about their experiences on our boats, and I enjoy nothing more than visiting a Cobalt dealer or going to a boat show to meet the people who know our boats. Over the years a long list of Cobalt standard features have come about because our owners saw a way to make a great boat even better. Conversations with Cobalt owners are invariably productive.
Q: Cobalt has been successful in the past few years in part because of sales among owners of on-the-water homes. Why has Cobalt become so popular among these homeowners?
St. Clair: That’s right. Cobalt has done very well in the homeowner segment of the market. People who actually live on the water use their boats more, necessarily so, than owners who trailer to a boating destination. It’s fair to say that these owners, people with immediate access to the water, are more involved in the sport of boating – they’ve chosen to live in a place where their Cobalts become a means of transportation almost as much as a means of recreation. Further, these owners can easily extend the season, using their boats earlier in the spring, later in the fall. And, of course, some owners by their homes’ location, use their boats year-round.
I might add that these owners have also become a valuable part of our marketing. We have a very small promotional budget. We don’t splash our brand in the media. Rather, we depend on word-of-mouth advertising from our owners and their discussions with other boaters. Cobalts do very well in presenting themselves to potential new owners who come aboard as guests of on-the-water homeowners.
Q: What can you tell us about new product offerings from Cobalt, in both the short and long term?
St. Clair: Again I think that Cobalt stands in contrast to other manufacturers in the marine industry. In tough times boatbuilders will pull in their horns, and the first casualty of a downturn in sales is new product development. At Cobalt we continue to believe that R&D is all-important, and we’ve run counter to the competition. We’re pouring new resources into product development. And consequently we’ll have four new models coming out this year.
We’ve moved aggressively back into the deckboat segment with a new 24-footer loaded with features in the cockpit, on the activity deck, and at the swim platform. This boat will debut at our dealer meeting in September.
The 200, new to the market this past model year, has proven even more successful than we anticipated. And so we’re bringing out a larger version of the 200, a 22-footer that will give its owners more room for family and friends. The A25 has also become a favorite in the model line, and we’re excited about a larger version of that revolutionary design in the forthcoming A28. Finally, we will be introducing another new cuddy, a 27-footer, following on the warm response to our 243, which also came to market this year.
Q: What options are Cobalt owners choosing for their new boats these days? Has any particular optional equipment proven to be a particularly strong seller?
St. Clair: New owners’ reaction to the swim-step has been overwhelming, way over the top. It has become a must-have option, and rarely do we see a boat come down the line in Neodesha without a swim-step in the options package. The response to the swim-step reminds me of the introduction of the 226, back in the late Nineties, the first model to feature the walk-thru transom. People looked at the 226, and the walk-thru feature just made so much sense to them. Same with the swim-step. The design is at the same time simple and highly refined, so refined in fact that we have a patent on the swim-step. It's that revolutionary. Our guys back in R&D, an unbelievably talented group of people, created a feature that is helping our owners enjoy their boats more. With an aging population, the swim step – again – makes such good sense. Now those folks will have a much easier access in and out of the water.
Q: With its attractive starting price, the 200 is having a major impact among sport boats. Please discuss Cobalt’s ability to produce a boat of such quality at its current price while holding true to the company’s longtime promise to compromise nothing.
St. Clair: I refer again to that seasoned group in design and engineering and to the craftsmen who build the 200. Our intent from the beginning was to introduce the Cobalt brand earlier in boaters’ experience. What we’ve found is that seasoned boaters are moving to the 200 as well. A nice surprise there. New and experienced boaters alike are finding in the 200 all the traditional Cobalt benefits in a small package. It’s extremely easy to handle. Its ride is smooth in rough water. And all because of the hull design. So, we began with a superior design, and then we ensured that the construction remain a hundred percent Cobalt. We cut no corners. We use the same lamination schedule, the same molded-in graphics, the same foam density in the seating of the 200 as on the 323. We hid nothing under the gelcoat, nothing under the vinyl. We cut no corners.
Q: Cobalt remains an anomaly in the marine industry. Still family-owned, Cobalt competes with boatbuilders backed by large corporations. What advantages, however, accrue to Cobalt because of its basic business structure?
St. Clair: Well, first of all, we have a large family, more than 450 people as a matter of fact. I understand that “family” can be something of a cliché, but our associates’ participation in our mission is whole-hearted. Their concern for building the very best boats is genuine. I never, ever worry about the quality of the product going out our doors every working day.
When J.D. Power and Associates began its study of the marine industry – a study which has given Cobalt the Highest in Customer Satisfaction award every year since – the folks at J.D. Power told us that in their long history, they had never seen such a distance between first and second place in customer satisfaction – in any industry. And then, after we started winning the award year after year, different companies called us, wondering if they might tour our plant. They were seeking a silver bullet, I think, some manufacturing secret that enabled us to build boats better. They went away disappointed, I believe, learning that our associates really do refuse to compromise. Those executives were looking for a process, and we showed them people. People who build boats as if they were building for their own families.
Simple as that.