The LDS of the future

[DevonDiver]

My question still stands. Given the factors that you have listed, what is the business model that will succeed where the diving community doesn't "suffer" as you put it??

A bleak outlook: Increasing agency costs, plus reduction of retail opportunity due to online mass-sellers will make small-medium sized dive operations untenable. Only large-very large dive centres have the price-breaks and retail clout to compete. Dive centres get bigger, selling cheap uninvolved scuba courses based on high student turn-over and large course sizes.

Baseline truths:

Online sellers are cheap because they have lower overheads (no showroom) and bulk purchase deals with manufacturers. Only large dive centres could match that, especially if they wish to stock from multiple manufacturers.

Agency costs ('main' agencies) decrease based on dive centre turn-over. Every effort is made by such agencies to create bigger, busier dive centres that offer quicker, cheaper courses to more people. An anathema to quality.

Add to that the development on eLearning schemes - there is a rapidly diminishing necessity for dive operations, with increasingly more customer cash being diverted straight to the 'big guys' (agencies).

Shops and instructors that attempt to focus on quality, variety and promote genuine relationships with customers are likely to find the business climate increasingly stifling. Those providers would most likely switch allegiance to minority agency/equipment suppliers that fitted with their goals and ethics. They would have to be content with a tiny minority share of the scuba market: appealing to customers who recognize that quality costs and are prepared to pay more for a higher level of service.

From my own perspective, given the changing market, I am quite happy being an independent instructor. I don't have the overheads of running a facility as I am increasingly less likely to require a classroom or showroom. I charter boat spaces for my needs and those charters provide tanks. I don't do retail, because I can't compete with online sellers. The downside is that my courses cost more - but that is balanced against the low instructor-student ratio and the dramatically increased customer-care I am incentivised to provide as an independent.

 

[Rich Keller]

The LDS is never going to keep the diver who is only concerned with price. The internet shops will almost always have a cheaper price and more variety. The internet shops are already taking a big chunk of the market and they have not started trying yet. If a few of these internet shops put together and promoted an international list of independent instructors they could take the most profitable segment of the market away from the LDS. Then they just need to inform people of the many other places to get tanks filled. The last part of this process would be the availability of equipment that a diver can service himself and that has already started. The successful LDS of the future will understand that no matter how many products he carries and what the prices are he only has two things to sell, quality and service.

 

[oly5050user]

You have posted a good summary of how things are now, which is what makes my original question a challenge.
My question still stands. Given the factors that you have listed, what is the business model that will succeed where the diving community doesn't "suffer" as you put it??

Or maybe the current business model really is working

I think we will see many lds fail and close. Training will become a income producer for the LDS that remain and that have access to low cost pools/or have their own. Cost for a ow course will rise to where it should be.Wookie wrote about a facility charging $1,150. for a ow course. Sounds like that is where it should be. When I became certified it was $50. for a course,and that was considered pricey.Now for someone in the same occupation that I was in then makes almost 20 times what they did back then,but the cost of learning to dive has not increased at the same rate. This will cause many potential people not to take a course due to perceived cost and just do "discover scuba" while on vacation,which may create a more dangerous experience for many.LDS that remain will also increase repair costs and air fill cost.

 

[jaycanwk]

......The downside is that my courses cost more - but that is balanced against the low instructor-student ratio and the dramatically increased customer-care I am incentivised to provide as an independent.

So is that really a downside? See, my idea of a good business model is one that benefits BOTH the buyer and seller.... in your case you getting a price for your training that you think is fair and in return the buyer is getting quality instruction ie. "dramatically increased customer care" and "smaller instructor/student ratio..."

But what is that magic price point? The bleak future you suggest in the rest of your post suggests that maybe we are not there yet and it is gonna be a painful transition for both parties.

 

[Rich Keller]

But what is that magic price point?

I do not think there is a magic price point. If it just comes down to price the LDS has already lost that battle. They must shift their focus to service and creating their own local diving community more along the lines of a diving club that is run by the LDS if they are to have any hope of surviving.

 

[TSandM]

I don't know . . . I think we are already seeing at least a few "LDS of the future" shops. ScubaToys is one, Dive Right In Scuba is another. Both have embraced the internet as a sales and marketing tool, and are concentrating on providing customer service that brings people back.

I would like to see dive training priced where it could be thorough and dive professionals could make reasonable money, but I have to admit that, had an OW class cost $1000 when I got certified, I would not have done it. A $275 class (plus personal gear) got me into the sport, where I have proceeded to spend a GREAT deal of money over the last six years. Not all of it benefited the original LDS, but it benefited SOMEBODY.

 

[Ozwald]

Wouldn't want those patrons shopping on price alone.

A successfull shop.....focused customer service, personality and quality merch and advice. Good training with good instructors that teach because they like to and make enough doing so to make it worthwhile.


Realistically this is so easy to attain it's silly. What I have come to find during my travels and various dive vac ays is that a lot of these dive shops just plain lack personality. If I go into a shop that makes me, the consumer, feel welcome and comfortable buddy thats where I am going to spend. When you walk into these places and whoever you talk to has got their head so far up their keester that you get turned off right away well.....

I have spent a ton of $$$ over the last couple of years and have narrowed down my purchases to one or two shops. One being internet based and one being local simply because I was taken seriously and made to feel permanent rather than part time.

Whether its at an instructor level or purchasing gear, I feel that personality and honesty will win every time as long as its competitive.

 

[Mitchell Teeters]

This a very profound statement. ST, and DRIS have excellent CS which is why I shop there as well.

Wouldn't want those patrons shopping on price alone.

A successfull shop.....focused customer service, personality and quality merch and advice. Good training with good instructors that teach because they like to and make enough doing so to make it worthwhile.


Realistically this is so easy to attain it's silly. What I have come to find during my travels and various dive vac ays is that a lot of these dive shops just plain lack personality. If I go into a shop that makes me, the consumer, feel welcome and comfortable buddy thats where I am going to spend. When you walk into these places and whoever you talk to has got their head so far up their keester that you get turned off right away well.....

I have spent a ton of $$$ over the last couple of years and have narrowed down my purchases to one or two shops. One being internet based and one being local simply because I was taken seriously and made to feel permanent rather than part time.

Whether its at an instructor level or purchasing gear, I feel that personality and honesty will win every time as long as its competitive.

 

[DevonDiver]

So is that really a downside?

To be fair, yes.

Online retailers strip LDS of equipment sales.
eLearning strips LDS of the benefit of having classrooms.
Independent Instructors strip LDS of course sales.
Dedicated boat charters strip LDS of customer trips.

Not much left exclusively for a 'traditional' LDS except tank fills and kit rental.

If too many independent instructors existed (and I think there will be increasing call for them), then they offer direct competition with LDS - again, with lower overheads. The obvious 'bite-back' is that LDS would stop allowing independent instructors to operate on their boats, their kit hire, their cylinder fills etc...

See, my idea of a good business model is one that benefits BOTH the buyer and seller.... in your case you getting a price for your training that you think is fair and in return the buyer is getting quality instruction ie. "dramatically increased customer care" and "smaller instructor/student ratio..."

Yes, but that polarises the market even more than currently exists - splitting the customer approach into either high end (expensive/consultative) or low end (sausage factory) scuba training. There's less middle-ground for a decent LDS that charges a medium amount and provides a medium service. You either pay $$$$'s and get a personal 'consultant' or you go slap down a little money to become a McDiver.

However, at the end of the day... all those independent instructors, charter boats etc all need their customers to get cylinder fills and/or rental gear.

Perhaps there is room in the market for focused 'tank filling' gas vendors. Some guy with a compressor who can set-up in a convenient location and do nothing more than pump/rent tanks at a low price?

The other option, as TS&M states, is for LDS to re-think their sales approach and broaden their market by adopting an online strategy. IF they built up sufficient volume trade that way, they'd start to benefit from the bulk buying pricing that existing online retailers enjoyed. That'd entail a significant change in business operation though... as they'd be forced to 'up-size' the scale of their business on the retail side. Whether many LDS could achieve that remains to be seen... there's a finite market capacity for big operations.

Either way... low pricing is the preserve of the 'big guns'... and an increasingly 'price-orientated' market is likely to drive more and more trade to the larger operators at the expense of local, small-scale, businesses. That's just as true for tuition as it is for kit retail.

Again, as TS&M said... not many potential divers, shopping for their entry-level courses, appreciate the difference between high and low quality tuition. Pricing is critical in this respect... and that is the enemy of independents and the small local dive centre.

 

[DevonDiver]

Devon its attitudes like yours which hurts the sport. The discussion about the cost of cards and your rationalization based on one falsehood, either from ignorance or other has hurt your credibility with me. The cost of business is the cost of business, quit whining.

Care to elucidate, as I don't really know what you are getting at?