Biggest thing killing dive shops?

[DevonDiver]

TDI you can be indie.

Ah, ok. I didn't realize until now that SDI and TDI had a different system in that respect.

As I now understand it, an SDI instructor has to be affiliated to a shop, wheras a TDI instructor can be fully autonomous?

 

[Trace Malinowski]

Correct.

 

[DevonDiver]

The money PADI make per manual is the same whether a course is £1 of £500, it’s the business that carries the difference- whether profit or loss.

Which is exactly why PADI has created an organizational culture that champions and incentivizes a volume sales approach.

To achieve higher volume sales, the primary solution is inevitability to reduce the cost and commitment associated with training.

For a big agency it's ALL about increasing the size of the market.

The best way to grow a market is to overcome barriers that prevent a wider demographic participation. The biggest barrier against participation in dive training typically COST. Secondary barriers are CONVENIENCE, TIME and DIFFICULTY.

Want to sell more manuals? Simple. Attract more new divers by making it as cheap, easy, quick and convenient as possible...

As has been mentioned already, agencies don't have the power to dictate what dive shops actually charge. Instead, they have the capacity to shape an organizational culture to achieve the same goal.

Hence, how they 'educate' dive pros, how they conduct 'business academies', the message preached by 'regional (sales) managers', how they specifically write course standards and syllabus, how they reward, recognize and incentivize members, how they attribute 'success'.... all according to a specific model.

If someone doesn't understand what 'organizational culture' is... or its importance and influence... they should research it.

The historic method for achieving lower costs in training was a loss leader approach, whereby other income streams (like equipment or vacation sales) clawed back overall profitability for the individual business.

That solution now generally fails, courtesy of internet shopping.

The more modern way of achieving that goal is by cutting training delivery, and thereby reducing associated overheads (like staff pay and dive costs), to an absolute bare minimum.

The gist of my article was to raise the issue of whether unquestioning adherence to that organizational culture or business model is actually in the best interests of many dive businesses in the contemporary market.

That is not to suggest that there aren't exceptions to the general situation.

In places like Koh Tao the vast influx of bucketlist-ticking, backpackers-on-a-budget (hundreds of thousands per annum) readily supports a volume turnover model.

Especially where symbiotic income streams like accommodation, food and beverage sales are profitable in their own right.. and stimulated by diving guests.

In vacation diving areas, consideration about training quality, relationship building and diver retention is a much lower priority.

Likewise, there will be LDS in remote areas, especially where shipping or import costs are prohibitive, that can still thrive from direct sales of equipment.

PADI et al know where their profits come from. They know which business model best sustains their revenue goals. They do everything feasible to promote that model, even if that model isn't in the best interests of many (most?) dive businesses.

Honestly, and in all fairness, as a profit-seeking business they'd be stupid not to..

I wrote my article because I genuinely feel a strong empathy every time I hear an LDS owner desperately cajoling divers to "support their local dive shop". We see that a lot nowadays, right?

But let's be realistic. Begging divers, or demanding loyalty, just isn't going to work.

There has to be a fundamental shift, by the majority of dive businesses away from the inapplicable, unworkable, low-cost/volume-turnover profit model.

Those heavily indoctrinated into that organizational culture may call me a 'hater'; but my suggestion would be to distance oneself from any agency that didn't empower consumers to differentiate individual training suppliers based on a cost-quality comparison.. or effect readily-available measures to protect and represent a sustainable member (pro and business) revenue from diver TRAINING.

In a tiny nutshell... opt out of any organizational culture that doesn't represent your specific interests as a professional or a business.

 

[Trace Malinowski]

The above statement by Andy is award worthy. Snorkeling used to be a way for the masses to see the underwater world by volume. A scuba instructor was once skilled labor.

 

[tursiops]

As PADI make money from the sale of manuals, it’s in their interests to have business with staff that turn over more manual sales. A 3 day course is ⅔ more profitable for PADI than a 5 day course.

You are arguing that more manuals are sold than there are students? Independent instructors also purchase manuals.

 

[Trace Malinowski]

I wish I could have filmed RSTC meetings. The scenes from the Austin Powers movies of Dr. Evil's lair ... that is the best way to describe the business of diving behind the curtain.

 

[markmud]

Which is exactly why PADI has created an organizational culture that champions and incentivizes a volume sales approach.

To achieve higher volume sales, the primary solution is inevitability to reduce the cost and commitment associated with training.

For a big agency it's ALL about increasing the size of the market.

The best way to grow a market is to overcome barriers that prevent a wider demographic participation. The biggest barrier against participation in dive training typically COST. Secondary barriers are CONVENIENCE, TIME and DIFFICULTY.

Want to sell more manuals? Simple. Attract more new divers by making it as cheap, easy, quick and convenient as possible...

As has been mentioned already, agencies don't have the power to dictate what dive shops actually charge. Instead, they have the capacity to shape an organizational culture to achieve the same goal.

Hence, how they 'educate' dive pros, how they conduct 'business academies', the message preached by 'regional (sales) managers', how they specifically write course standards and syllabus, how they reward, recognize and incentivize members, how they attribute 'success'.... all according to a specific model.

If someone doesn't understand what 'organizational culture' is... or its importance and influence... they should research it.

The historic method for achieving lower costs in training was a loss leader approach, whereby other income streams (like equipment or vacation sales) clawed back overall profitability for the individual business.

That solution now generally fails, courtesy of internet shopping.

The more modern way of achieving that goal is by cutting training delivery, and thereby reducing associated overheads (like staff pay and dive costs), to an absolute bare minimum.

The gist of my article was to raise the issue of whether unquestioning adherence to that organizational culture or business model is actually in the best interests of many dive businesses in the contemporary market.

That is not to suggest that there aren't exceptions to the general situation.

In places like Koh Tao the vast influx of bucketlist-ticking, backpackers-on-a-budget (hundreds of thousands per annum) readily supports a volume turnover model.

Especially where symbiotic income streams like accommodation, food and beverage sales are profitable in their own right.. and stimulated by diving guests.

In vacation diving areas, consideration about training quality, relationship building and diver retention is a much lower priority.

Likewise, there will be LDS in remote areas, especially where shipping or import costs are prohibitive, that can still thrive from direct sales of equipment.

PADI et al know where their profits come from. They know which business model best sustains their revenue goals. They do everything feasible to promote that model, even if that model isn't in the best interests of many (most?) dive businesses.

Honestly, and in all fairness, as a profit-seeking business they'd be stupid not to..

I wrote my article because I genuinely feel a strong empathy every time I hear an LDS owner desperately cajoling divers to "support their local dive shop". We see that a lot nowadays, right?

But let's be realistic. Begging divers, or demanding loyalty, just isn't going to work.

There has to be a fundamental shift, by the majority of dive businesses away from the inapplicable, unworkable, low-cost/volume-turnover profit model.

Those heavily indoctrinated into that organizational culture may call me a 'hater'; but my suggestion would be to distance oneself from any agency that didn't empower consumers to differentiate individual training suppliers based on a cost-quality comparison.. or effect readily-available measures to protect and represent a sustainable member (pro and business) revenue from diver TRAINING.

In a tiny nutshell... opt out of any organizational culture that doesn't represent your specific interests as a professional or a business.

Hi Andy,

You are hitting this topic out-of-the-park and the bases were loaded. You're going downtown baby

I am now convinced that you have some form of higher level business acumen or training. Your analysis of this situation seems to be based on text book executive level business strategy and tactics.

Whereas, some of the other posters seem to be indoctrinated in a form of European Socialist economic theory.

Economics is nothing more than simple physics. The more energy, human and resource based, that an endeavor requires the more money it will cost. Plain and simple. If you sell your goods and services for what the human and material resources cost, you are insolvent.

The high volume manual and high volume c-card fee model may work well for the agencies, but not the small LDS.

The only way for an insolvent business to keep functioning is if someone is subsidizing the business by accepting exceedingly low wages, or working for free, or by living off other assets, either their own or someone else's. Proof of this is the fact that a kid can't become an instructor, work for 30 years in diving and then retire. Good luck with that.

Or, the business becomes profitable by changing its marketing strategy. As Trace Malinowski wrote, swimming pool repair can be profitable.

You are arguing these points as it relates to this topic and doing it splendidly!

markm

 

[Trace Malinowski]

Instructors and shops also make the mistake of dividing their customer base by brand. When I started diving my friends all had PDIC, NAUI, PADI, and SSI cards. We didn't view those any differently as divers than we might driver's licenses from different states. Can you operate a motor vehicle legally? Are you certified to dive? We went into any shop that was on the way, open, or near a dive site. The current climate is that many divers consider themselves a PADI diver or a NAUI diver rather than just being a certified diver. The "certified" part got us fills. The "diver" part got us friends. I see more division than diversity in the sport today.

 

[mdb]

I was first certified in 1972; San Diego Divers Supply, San Diego.

Five weeks of classroom and pool. 5 open ocean dives.

Cost $150.00.

$150.00 in 1972 had the same buying power as $881.14 in 2017.

Worth every penny.

 

[scubadada]

I was first certified in 1972

I was certified by LA County in 1970. I was recertified with my son in 1997, by PADI. Things had changed quiet a lot in 27 years but our training in Grand Cayman was quite thorough and very good. I have no memory of the cost, it was just the two of us with an instructor. Four very nice dives on the West side of Grand Cayman, considerably easier than the 3 beach dives and 2 Catalina dives that were part of my LACUU certification