Editorial

Dealers Can and Should Fight Back  

      Don Magary, Editor

As RV News pointed out last month in this column, Affinity Group, Inc. (AGI) has raised the stakes to influence where and how RVers spend their money on financing, insurance, warranty insurance, service and aftermarket parts and accessories by forming a new marketing arm called Affinity Resource Centers. And they have a lot of influence with the consumer through its publications (Trailer Life, Woodalls, Motorhome, Coast to Coast, Highways) and it's clubs (Camp Coast to Coast, Good Sam Club and Camping World's Presidents Club), and its Internet site. AGI has the ability to speak to and influence nearly two million active RVers every month. And it would be naive to believe they are not trying to influence this audience to buy RV parts and accessories at Camping World, to have these accessories installed at Camping World, to obtain their financing when purchasing an RV through Ganis which commissions AGI for every deal, to buy insurance and extended warranties programs through it's endorsed programs where it receives a commission on every policy. Until the formation of the Affinity Resources Centers, AGI was content to use "house ads" in their publications and direct mail to woo this business, but now AGI is putting a sales force in Camping World stores going one-on-one with every RVer who stops by.

We have also pointed out in previous columns, that AGI's predatory business practices directly competes with RV dealers in every area of a dealer's business, except rolling stock. And no matter what the company says publically, I for one find it hard to believe that rolling stock at Camping World stores is out of the question.

It's all about money and profits, and if those profits traditionally went into an RV dealer's operation . . . oh, well.

Since AGI has so blatantly targeted the RV dealer's profit centers, I'd say it's high time that RV dealers fight back. How?

Two ways. First, boycott any of AGI's programs such as advertising in the publications, selling their products in your store and stop accepting AGI's club cards as a legitimate reason for giving a consumer a discount.

Everything you do to bolster AGI's standing with the RV consumer puts dollars in their pockets which they are using to compete with you. If every time a consumer flashed a Good Sam card in your face you simply said we don't honor that here, but we will be happy to give you a discount if you have our card or any other.

Your own card? What a novel idea, and that leads me to the second way to fight back. Form your own club, an affinity group of your own. The truth of the matter is that there is nothing that AGI is doing that RV dealers cannot do themselves. So rather than simply depositing the check after the customer buys an RV and for all practical purposes sending them into the outstretched arms of AGI, send them out with a package under the arm so there is really no reason to even tip their hats at AGI.

Tall order? Not really. It's do-able.

For years you've been giving away ten percent on parts and service every time a consumer came in and flopped down that membership card with the smiling head with a halo on it. I keep hearing that a few dealers are now honoring Camping World's Presidents Club cards too. Why not give them a club card with your company's name on it ­ that way you are the hero, not the Good Sam club.

Now you're starting to get the idea -- hit AGI where it hurts -- the pocketbook. They are certainly taking dead aim on yours. So what else do you need to compete and have your own club? Well, you already offer financing, extended warranties, insurance, service and repair and parts accessories so you have those services that AGI offers covered. Most national distributors have programs specifically designed to help dealers compete with Camping World's advantage of buying direct from suppliers as a distributor or mass merchandiser and selling through their own national chain of stores.

Now what if you could offer an emergency road assistance program and a travel planning service? You can and very cost effectively. Coach Net, a company based in Lake Havasu City, Arizona, can put you into a custom program just for your dealership at a very low cost ­ so low in fact that you could give it away by building it into your sale price. (Please read the Coach Net story).

If you are looking for a way to fight back, these two suggestions would be a great start. You not only hit them in the pocketbook, you can provide your customer with an exceptional benefit plan at the same time, arguably a better plan than AGI offers. For example, a 24-hour, seven-day-

a-week hotline staffed by professional RV technicians that can help your customers with immediate assistance when a problem comes up. Plus, if the RV tech cannot help the owner get the problem solved over the phone, he will find a repair location and make an appointment for your customer at a facility along his route -- benefits not available to GS members.

And if you doubt whether or not Coach Net can perform you might call a few of their existing customers ­ Ford, Chevron, Winnebago, National RV and Holiday Rambler to name a few.

And offering this service would impact AGI. According to their own numbers, as of December 31, 1997, between the Good Sam Club and Coast to Coast clubs members, 216,000 participated in their emergency road service programs. And since each member subscriber pays an annual fee ranging from $69.95 to $99.95, they take in from $15 million to $21 million.

Another attractive benefit to RVers is Good Sam's campground discount program. I'm sure if you called KOA, they would be more than happy to supply you with a stack of applications for the KOA card which gives RVers a 10% discount at over 600 KOA campgrounds across the U.S. and Canada.

So unless your customer had an overwhelming desire to put a decal of "old smiling Sam" on his or her RV, your customer would have little or no reason to ever call Good Sam or any of the other affinity clubs that falls under the AGI empire.

It's a fact that most of the things that come with a Good Sam membership are benefits provided by others, such as discounts at campgrounds and RV dealerships. What a deal. They get people to pay them to give your profits away.

Oh sure, they have Highways magazine, but most of it is Good Sam chapter news and ads trying to sell members products and services that in many cases compete with you, the dealer.

The company's business strategy, (their words not mine) is to increase the enrollment of its clubs through internal growth and acquisitions, in-crease the sales of its products and services by marketing to club members through the most effective distribution channels and by developing and enhancing its product and service offerings, and increase the circulation of its publications by introducing new magazines and acquiring publications which are complementary to the company's recreational market niche.

Let's take a look at how they use their magazine to sell their products and services. In the issue we randomly picked up there were full page ads for Coast to Coast, a Good Sam CD from Affinity Thrift and Loan, another Coast to Coast ad, a Good Sam Samobree® ad, an ad for Trailer Life's Campground Directory, RV Search Network, a two-page spread on Good Sam travel, another two-page spread for TL's campground directory, a full page ad for Good Sam's extended warranty program, another two-page Affinity Thrift and Load ad, a two-sided card stock ad for Good Sam VIP insurance plus an accompanying full page on the VIP insurance program, eight-pages running for Camping World, plus a lot of smaller miscellaneous ads throughout the issue.

So in a nutshell, AGI intends to sell as much stuff as possible to this group of 1.8 million members in their various clubs. And if you as a dealer are aggravated by the fact that AGI has targeted your business' profit centers, I'm here to tell you, you haven't see anything yet.

Why? Let's look at AGI financial statement. This company has nearly $300 million in long term debt. Just paying the interest at 11 to 11.5 percent on this debt is going to be a challenge. Granted, TL Enterprises, Woodalls, Coast to Coast, and Camping World are all fine companies and profitable. But can they be profitable enough to sustain such a burden? That's the big question.

I predict that AGI is going to become very aggressive and that their latest move, establishing Affinity Resource Center, is only the tip of the iceberg.

Last year, the first year with Camping World in the financial picture, AGI managed to show a meager profit; however, considering the carry over loss from a defunct association they bought several years ago, about $6 million clouds the picture. Without that carryover, AGI would have lost money last year.

AGI is a giant company with a mission and that mission could have an adverse affect on every dealer's business nationwide. My advice is to go on the offensive, fight back now while you are still in the game. It will do little good later if you are on the sidelines, offering Monday morning quarterback analysis of a lot of should haves.

Dealers, the game is on now. Don't just hold the line, pick up some yardage on your own. Fight back.

RVN