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Editorial COMPETITIVE CORPORATE
GREED:
Your worst fears have been realized – a business partner that you have trusted for years has suddenly decided that they don’t need you anymore. Slowly, quietly and without warning, a company you have been doing business with has become your biggest competitor. Now what do you do? Unfortunately, many companies will do nothing. For some strange reason they will continue to do business with the Affinity Group and it’s allied companies and subsidiaries as if nothing is happening in the RV industry. The recent acquisition of Camping World is the icing on the cake for a corporate giant suffering from corporate greed – at your expense. I’m not directly involved in the RV industry, but would qualify as one who is quite familiar with the many companies that comprise your exciting marketplace. I have watched this situation grow through the printed word of one of your respected industry trade journals – RV News. I watched a similar situation develop in our industry, that being the Information and Image Management world that deals with micrographic and electronic imaging systems. We fought back, and I urge the independent dealers, campgrounds, and financial institutions to do the same thing – now - before it is too late. Our industry did, and the corporate giant eventually saw their empire crumble and sought the protection of the bankruptcy court as they filed for Chapter 11 and came within a heartbeat of being completely driven out of business by the very industry they fought so hard to control. What does this have to do with your situation? Plenty. There are many similarities in our two industries. We are a dealer and buy product from several vendors, just like most RV dealerships. We support the products we sell with professional technicians who install and provide after-sale support and service, just like most RV dealerships. We provide leasing and other financial arrangements to assist our purchasers with the large investments we will ask them to make in our products and systems, just like most RV dealerships. We sell supplies and accessories that provide additional sources of revenue either at the time of the original sale or in a post-sales situation, just like most RV dealerships. We are a small business in an industry of giants and we have many competitors, just like most RV dealerships. The only major difference is the product we sell and the valued prospects and customers who have allowed us to operate a profitable business. A business that provides employment for many people and contributes to the overall success of our given industries. The company we fought against was Anacomp, a provider of software and computer-output-microfilm equipment and service bureaus located throughout the United States and overseas. In the beginning, they were just another competitor, offering a selection of products and services but not dominating the industry in any way. As the years went on they grew larger and demanded – and received – pricing considerations from many of the same vendors we were purchasing the same products from. Users of the microfiche produced by Anacomp and/or service bureaus require readers and reader-printers to view and print images. Slowly and quietly Anacomp began to acquire the very companies that most of us independent dealers purchased our readers and reader-printers from. We were now buying from our competitor. They promised that the companies would be run as independent subsidiaries and that their sales people would not receive favorable pricing from the companies they acquired. Some people actually believed that statement. They grew so large that they controlled the marketplace and many of the companies in our industry. They established a direct sales force that would actually compete with the dealer’s sales team. Anacomp won either way, and the dealer lost profit or market share … but one thing was certain … he lost. The final blow came when they decided to compete against the dealers who were feeding their corporate greed and established a technical service team that would go into the streets of our respective territories and undercut the technical service contracts by 50% and promised to service every piece of equipment in our industry. They wrote service contracts on equipment they didn’t sell and on equipment that they could not obtain parts for from the original equipment manufacturer. It was very disturbing to see authorized dealers actually purchase parts and then resell them to Anacomp knowing full well that it was going to lead to the demise or at least lost profits of one of their peers in the industry. I will never understand the logic or lack of integrity exhibited by many dealers who saw an opportunity to make a quick dollar at the expense of the damage that was being done to the independent dealer community. After a few good whacks in the side of the head and after seeing our equipment profits decline, our service revenues erode, our supplies and accessories business drop and our bottom line suffer … we finally fought back. We were where you are now. We recognized the problem and decided to do something about it. We simply stopped buying from Anacomp. We would no longer contribute any money to a company that was interested in controlling our industry. There were other companies we could do business with. They weren’t as big as Anacomp and maybe the products were not as good as some of the competitive products, but at least we knew where our hard earned money was going. We fought back on service contracts too, becoming just as aggressive and pointing out to the clients we lost that the machines were being serviced by people who were not factory trained and by a company who did not have an authorized source for the parts they might need to fix a problem. We enlisted the help of the manufacturers also. They beefed up internal ordering surveillance and identified the dealers who were purchasing more parts then they could possibly use for the amount of equipment they had sold. They lost the right to sell certain products as their dealer agreements had been violated and eventually terminated by the manufacturer. As the source of supply dried up, more and more customers became disenchanted with the poor service and it carried over to their other product lines that they did manufacture. It came back to bite them real hard. The tide was turning. We all went back to basics and did the things that made our companies successful in the first place. We provided a level of customer service and support that a multi-faceted corporate giant is just not able to provide. Eventually, and with some assistance from an industry down-turn that saw equipment sales plummet over a period of four years, Anacomp could not meet all of their corporate financial commitments. Yes, they had grown a very large company that was recognized around the world. Yes, they had many physical locations and a large number of employees in several different divisions and subsidiaries. And yes, they had met unexpected resistance and reversal of fortune at the hands of those they sought to control. How does this equate to the RV industry today? Again, looking at it as an outsider, there are many parallels and there is an opportunity for those most impacted by the Affinity/ Camping World empire to fight back. How do you fight back? Real simple. Want to get the attention of the people who are telling you that they are good for the industry and good for the dealer? Stop doing business with them. Write them a letter and send it to trade publications and local media so that your prospects and customers know you are willing to fight to protect your right to run a profitable business in their community. Stop offering Good Sam discounts. However, make sure you explain the reason why to your customers. Let them know what the Affinity Group and Camping World are doing to small business owners who are the backbone of your industry. Stop advertising in their directories and publications. Talk to your manufacturers and ask them to do the same thing. Don’t forget, if the dealers go out of business, the manufacturers don’t have anyone to sell their product. If the dealers become financially weak, the manufacturers lose valuable distribution outlets in key markets. Let them know that their inspectors/sales reps are no longer welcome at your campground or dealership. Post signs in the campgrounds and dealerships and let the general public know what is going on in your industry. Start discontinuing any product and/or service you buy from them and replace it with a competitive product from a manufacturer who is on your side. Meet with your financial partners and explain the situation you are competing against. Banks want to see you succeed, don’t keep them in the dark or let them get blindsided by the loans being rewritten by this corporate giant. Consider pooling the financial activity of several dealers so that the bank can be more competitive with their RV portfolio. Again, stress the local connection and the relationships with a local bank that can meet the needs of your customers for other financial requirements. Your competitor only wants one thing -–a discounted loan. Your local bank wants what you want … a long-term relationship and a good business partner. Stress the importance of local, personalized service. Reach out to your prospects and customers and let them know you are worth more money and provide better service. Remember that people are willing to pay a little more to do business with someone they know and trust. People buy from people, not companies. Get creative in your approach to sales and marketing of your product or service. Provide that extra "value-added" that makes your company unique. Get serious about your business … it is "your" business and not theirs. You should be ready and willing to fight for it.
Use new technologies offered by computers and the Internet. The marketplace is changing and you have to change with it. Get on the technology bandwagon before it leaves the station. The longer you wait to adopt new business practices based on technology solutions, the farther behind you fall and the more expensive it will be for you to catch up. Organize around RV America and the many services offered on their professional web site. This trade publication has never hesitated to speak up and speak out when issues affect the common good of the RV industry. Bigger is not necessarily better. Just ask any successful small businessman or woman who competes daily with the Home Depot’s, HQ’s, Wal-Mart’s and other mega-stores and mega-corporations. Personal service and professional pride will still mean something in most business situations. Fight back and take a stand. Face the situation head-on and let the Affinity Group and Camping World know that you are not going to roll over and play dead. Protect the investment you have made in the RV industry and don’t make it easy for someone to take it all away from you. By the way, there was a happy ending to Anacomp. They survived the Chapter 11 and have returned to strong financial health. They sold off the divisions that competed against the dealers. They divested themselves of businesses they should never have been in anyway. And they are now negotiating with several dealers, including us, to take over their technical service responsibilities on products that they do not sell and can not support. Everyone was a winner. The lesson is very simple; fight back or there will be losers. Turn the momentum around, let them know they are in a dogfight, and hopefully they will realize the danger of their decisions and everyone will once again be a winner. Good luck and good selling.
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