RVBusiness July 2023
Ever get the feeling that you just can’t win?
Almost every dealer has dealt with the impact of one of the major-chain RV retailers showing up and disrupting their market. Offering local customers the pricing power of the mega dealer, as well as regional or even national service networks, it is easy to see why customers are attracted to this model … especially if independent dealers do not offer a compelling and identifiably-different value proposition.
There are many reasons why an informed consumer would choose to purchase from a local, independent retailer. From supporting the local community to investing in local jobs to access to top decision-makers to lower overhead operations, independent dealers can offer a suite of value propositions that can stand up to anything promoted by the big chains. Managed properly, there is no reason why an independent dealership can’t be just as professional, just as operationally efficient, and (certainly) just as effective in providing excellent customer service. Simply put, there is no reason why an independent dealer can’t successfully compete with a major chain.
Yet here we are. With the chain retailers expanding in nearly every market, independent dealers find themselves squeezed on all sides – by consumers attracted to the perceived value of the mega-store model, and by employees tempted by the promise of better wages and opportunities. No matter the reality of either of these perceptions, independent dealers need to stake out a market position that counters this message, and focus on operational excellence that creates the revenue streams necessary to invest in their businesses and their people.
But what does that mean? First, it means operational excellence that consistently returns net profit in the top 20% of all dealers. Net profit is the life blood of innovation and future opportunity, and necessary for the development of growth opportunities for the business and the employees. A strong balance sheet is your first line of defense against predatory competitors. Regardless if you are a small shop or a very large multi-location dealer, if your activities don’t consistently generate strong nets it’s time to look internally to invest in the people and processes you need to reach maximum efficiency.
Second, dealers need compensation programs and growth opportunities that attract and retain top talent. The battle for skilled talent in all departments will probably only become more intense in the future … what have you done to build guardrails around your high performers? Maybe you can’t or don’t want to compete with the wages offered by the large retailer, but could you out-innovate the competitors for your employees in other ways? There are many strategies to retain top talent from deferred compensation programs to insurance plans to flexible schedules; the list is limitless if you really consider it. Don’t be caught flat-footed on this issue: employees want stability, they want growth opportunities, they want to work in a safe, well-designed environment, and – importantly – they want to know that they are valued and their contributions truly matter. Broadening the playing field beyond just wages creates many ways for the independent dealer to compete in – and win – the battle for great people.
Finally, independent dealers need to lean into their own brand, and double down on their identity and history as the local dealership with the products, services, and people right for the market. Make sure you are actually different – with a compelling value proposition for customers and employees alike – then make sure that everything about your unique offering is communicated loudly and clearly in everything you do. The customer should not have to be told what’s different about your company … the marketing materials, dealership experience, and attitude of your employees should broadcast it loud and clear.
The independent dealer probably cannot outplay the chain operators in the “mega dealer” game. Copying the look and feel of a national chain is just a losing battle – they are good at their image creation and inventory strategies, and they have the deep pockets needed to win any battle based only on money or pricing. But with smart strategies and excellent execution, the local dealer can redefine the rules to create a different playing field. Play your game, not theirs, and win the battle of operational excellence, of employee retention, and of customer loyalty.
Use the following checklist to make sure that you are paying attention to the “Keys to the Game” in your dealership.
My Dealership “Keys to the Game” Checklist
Operational
- Net profit consistently in top tier of industry
- Effective annual planning/budgeting process in place
- Management conversant with important financial metrics, especially balance sheet
People Management
- Proven recruitment model and onboarding process
- Growth plan in place for all employees
- Meaningful employee rewards program not easily imitated by competitors
Market Identity
- Clear product strategy (i.e., towable specialist, high-end motorized, etc.)
- Professional and evident branding throughout location and in all marketing efforts
- Identifiable culture that ensures consistent and identifiable customer experience