Recreation USA is prompting its dealers to focus more on their service departments as a route to more profit.
By 2002 the RV dealership chain, based in Fort Lauderdale, Fla., expects its service revenue to account for 15 percent of its anticipated $1 billion in sales. This compares with 1999, when its service revenue accounted for about 7 percent of its $81.4 million in sales.
The company's emphasis on service comes when RV dealers nationwide are concentrating on giving baby boomer customers the fast and convenient repair they expect. Ronald Huneycutt, Recreation USA's president and CEO, is working to make his company an industry leader in service.
Recreation USA is the nation's only publicly traded and largest RV dealership chain. It has acquired 19 dealerships in Florida, West Virginia, South Carolina, California, Kentucky, Alabama, New Mexico and Virginia. The chain's new approach, Huneycutt said, is a departure from how the majority of its dealerships have operated.
'Their focus and talent has been on selling RVs,' he said. 'They've really had their blinders on, and they really haven't looked outside that focus and at the wider picture of profit centers available within their dealerships.'
Last fall, Huneycutt approached 10 of the 20 manufacturers that make the coaches sold in Recreation USA's dealerships, asking if all of his dealers could get authorization to make warranty repairs on the manufacturers' motor homes - even if some dealers do not sell that company's product.
Six manufacturers have agreed to the deal. An additional two are expected to sign on this month. Manufacturers that do not agree may be eliminated from Recreation USA's dealerships, Huneycutt said.
However, manufacturers' authorizing dealerships that do not sell their coaches to perform warranty service work is not unique in the industry, says Mike Duncan, spokesman for Monaco Coach Corp. of Coburg, Ore.
'Being able to service the increasing number of customers that we have out there is very much a top priority for the company,' Duncan said. But balancing customer service with dealer relations is essential, he added.
This balancing act is the reason that Riverside, Calif., motor home maker Fleetwood Enterprises Inc. has not agreed to Recreation USA's service deal.
John Crowe, Fleetwood's director of service and parts, said his company will not agree to authorize all Recreation USA dealers until it has approval from its own dealer body. He does not want to anger Fleetwood dealers that have invested in their own service shops but says the program has advantages.
'It's got tremendous benefit because they're breaking some of those old mores that exist in our business, that if you didn't buy it here, you can't get it serviced here,' he said.
The first to sign on to Recreation USA's program was Michael Stout, president of towable manufacturer Thor America of Middleburg, Pa. Stout said he welcomes service support because not all of his dealers are willing to focus on service-only customers. Thor's Four Winds motor home division also has agreed to participate.
'One of the standard ways people do business in our industry right now is dealers will service what they sell,' he said. 'I hardly know of any dealers that will absolutely turn the customers away, but they may be put at the end of the schedule.'
In contrast, Huneycutt is training dealers to focus on service-only customers, whether or not their coach was purchased at a Recreation USA dealership.
However, as long as manufacturers approach their dealers first with service-only customers, Recreation USA's new service agreement will not be a threat to dealer-manufacturer relations, said Dennis Charron, sales manager for Independence RV in Winter Garden, Fla.
To position itself as a service-first organization to motor home owners, Recreation USA also offers a Goodwill Sunday Service program.
The program involves the dealerships' technicians taking mobile service centers to campgrounds, making minor repairs for free. If the repair requires the coach to be hoisted, the traveling technician will diagnose the problem and schedule a service appointment for the customer on-site.
Only the company's Florida dealerships are offering the Sunday Service program. But it is expected to roll out nationwide by summer's end.
To prepare dealerships for an anticipated increase in service, Recreation USA is investing about $250,000 in body shop equipment, and also plans to hire six additional technicians at each location by year end. Each dealership has between five and 10 technicians on staff.
Four more service bays are expected to be added to the Clermont, Fla., location, which Huneycutt considers the chain's flagship service dealership and a training ground for other Recreation USA dealers.
Said Huneycutt: 'We can bring people from other dealerships in there and show them how it's done. The dealers go home with a whole new respect for what's available to them and what they've been leaving on the table all these years.'