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RVPulse

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Tom Faludy <br />M&A Consultant & Go RVing Campaign Co-Founder
Tom Faludy
M&A Consultant & Go RVing Campaign Co-Founder

About The Author: RV industry veteran Thomas G. “Tom” Faludy, a former RVIA board member and first chairman of the RV industry’s Go RVing marketing campaign, completed a 30-year career with Scott Fetzer Co., where he rose from the ranks as head of sales and marketing for the Carefree of Colorado division to become president of that division and, later, executive vice president overseeing 10 operating divisions. After retirement, he formed TGF ENTERPRISES, offering seller-side M&A representation, and has served in a variety of advisory and board slots for companies such as Jayco Inc., Middlebury, Ind., and The Ryan Group of Companies in Australia, which includes Jayco Australia. A 2006 RV/MH Hall of Fame inductee, he was named one of the “100 Most Influential Executives in the 100 Year History of the RV Industry” by RVBusiness.

Five Insights About Our Industry from an Individual Who Has Always Been More Than a Passive Observer

It’s been more than 12 years since I ran a business focused exclusively on the RV industry. Since then I’ve been immersed in the business of business — learning and gaining perspective from an array of companies, products, industries and global markets.

What has become clear is that all business is the same in many ways. All managers confront the same challenges and the same P&Ls, and that to earn true sustained success, a business must be and remain ‘special.’ And to be special it’s all about PRODUCT (and service). And the reason it’s all about PRODUCT, is that it is the product that defines and delivers the EXPERIENCE. I would also note that the earnings of a business are directly proportional to the value of the experience its products provide.

So, with that backdrop, I’ll share five thoughts about our greater industry and the experience that nets out as the sum of our cumulative products and services.

1. GO RVing and something I don’t hear much about anymore: THE COMMITTEE ON EXCELLENCE.
Long ago, when I was intimately involved in the formation of GO RVing, I felt it was not only important to promote our industry, but critically essential to ensure we deliver an outstanding EXPERIENCE. After all, it would be detrimental to lure customers with the beautiful and compelling images of our GO RVing ads and have the ownership experience fall short of those compelling expectations.

The essence of the idea behind the Committee on Excellence was that a great RVing experience is a seamless interface of ALL industry factions hitting on all cylinders:

  •  The image of the dealership.
  •  The draw, excitement, true comfort and livability of the RV.
  •  The purchase process.
  •  The performance, reliability, comfort and ease of use of the product.
  •  The availability and convenience of storage.
  •  The appeal, amenities and services of the campground.
  •  The convenience of the warranty & service provided.

You know, it all matters. Each segment is vital to delivering what our powerful GO RVing ads promise. But a disappointing dealer experience, a product that frustrates or a campground that doesn’t live up to peoples’ expectations and the lore of RVing, subverts our multi-million dollar ad campaign.

The Excellence Committee was intended to ensure that each segment had an initiative to measure how well it was delivering on the promise of the Go RVing ads, and to shepherd continuous improvement efforts within each segment so that as an industry we can be certain we meet customer requirements and exceed customer expectations. So, I wish there were some unabashed leaders who would take up the cause and really champion a high visibility priority on this element of the founding vision.

Now, I’m not suggesting that we attack the issue the same way we did back then, as I believe that effort became too expensive, and in some ways too divisive. I am not advocating we go back to the specific work the Excellence Committee was doing, but to pick up on the GOAL we were pursuing. It’s not enough to simply focus on crafting compelling images and messages about RVing. We also need to make sure WE as a collective industry, dealers, OEMs, campgrounds, service centers, etc., deliver the experience we promise.

2. If I were a dealer, I would make sure my dealership is focused on the experience of ownership.
RVs generally represent the second or third largest purchase for almost any family. And if buying an RV also means having to buy an appropriate tow (or towed) vehicle, it’s an even bigger hurdle. And if we’re after first-time buyers to grow our market, there are other even more essential hurdles our prospects have to navigate as they migrate from awareness to interest to consideration to buyer.

Where would we store it? Where would we go to use it? Will we use it often enough to justify the purchase? Do I have to buy a new car? How do I overcome my fear of making sure I can hitch up to it safely? How do I overcome my fear of towing?

It seems to me that most dealerships assume prospective customers can work through those issues on their own, so the retailer’s efforts are mostly focused on competing for the customers who have it all figured out, even though this pool of prospects is significantly smaller than the general pool of prospective customers who haven’t worked through the above issues. And I would contend that the larger pool is also, potentially, a higher margin pool.

So, here is what I’d recommend to dealers about addressing the RV experience and capitalizing on the larger, more profitable category of potential prospects:

  • Promote towing courses and clinics – much like Harley Davidson dealers offer driving and safety courses for people who would love to own a Harley but are hesitant about their riding skills and confidence.
  • Establish affiliations and specials with key storage facilities within your market, making that uncertainty and concern go away.
  • Merchandise your dealership like a travel agency – or like the hotels that have a rack of brochures on what to do and where to go. Feature all the great attractions and pre-qualified quality campgrounds within a four-hour drive of your dealership. Overwhelm your prospects with all the many weekend excursions that await them and their new RV.

3. The Boomer thing and marketing in today’s crazy economy.
Seems like the industry is really poking around the opportunity, but has yet to nail it. Sure we’ve got destination – extended stay – campgrounds, park models, destination trailers, residential scale fridges and furniture, but it hasn’t all been synthesized and marketed as an experience – as a fun and affordable retirement lifestyle.

In fact, I think we’re missing the full potential of the first-time Boomer buyer opportunity because we’re selling bits and pieces of the elements that ultimately dictate the experience vs. marketing the whole experience to sell RVs, much as The Villages markets a retirement lifestyle to sell homes. Getting this right would require a collaborative promotion between dealers and lifestyle campground operators – perhaps with package deals, long-term rentals, full ownership. (I hear some dealers even offer delivery and set up – no tow vehicle, no problem.)

4. Beyond pooling our funds for GO RVing ad dollars, we need to pool our collective intellectual resources to create an industrywide vision for the road ahead.
I applaud our industry for its team play and the big picture discussions such as those held in January during the World RV Conference as well as Chinese development initiatives, and the recent Power Breakfast. But I think we’re missing some basic and more relevant full spectrum, industrywide planning opportunities. I would suggest collaborative strategic planning initiatives in North America – the biggest market of them all.

It’s not enough to pool our money for ads, we must pool our intellectual resources and project a quantified vision for where we’re headed as an industry and assess the infrastructure gap we would need to bridge in order to attain that vision. The adequacy of that infrastructure is as important to the quality of the experience as the RV itself. It’s our combined deliverable that determines the satisfaction and rate/frequency of use of our products. Our success as a greater industry is ultimately as dependent on how many current owners we can sustain as active owners as it is on how many prospective owners we can turn into happy customers.

Rate of use is as important as rate of sale. What all (within each faction) must be in place to delight and accommodate and service the owners of the types and numbers of RVs our industry projects to build over the next ten years?

5. The used market remains an untapped opportunity.
The majority of used RV transactions are private party-to-party sales that are not finalized through a dealership, so I’ve heard lots of dealers lament that they’re being aced out of these lucrative revenues.

Why haven’t more OEM’s, suppliers and dealers tapped into the formidable REFURBISHMENT opportunity of the used unit market?

Consumers refurbish their homes, and they will also refurbish their RVs. From mattresses to cushions to appliances to curtains to lighting – beyond repairs — used RVs need updating, refreshing, greater convenience and eye appeal. There is, in my view, a high margin, focused business opportunity in this unserved — or at least underserved — need.

The lifetime margin value of the goods and services sold for used RVs is a significant multiple of the margin value of the new unit sale. Capitalizing on this annuity is not only an economic benefit to all stakeholders, but also strengthens the image and appeal of our industry by ensuring a better experience for used RV owners who will be more likely to become new RV buyers.

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