Five Million Sales Opportunities

by: Bill Koster

According to the University of Michigan, 8.2 million households own an RV. In a survey conducted for Go RVing, depending on the product type, only 5 to 26 percent of respondents who bought a new RV indicated they had purchased a service agreement. If we discount ineligible vehicles due to age or desirability, more than five million RVs qualify for a service agreement. Motorhomes, travel trailers, park models, folding camping trailers, and even horse trailers and utility trailers range from newly purchased to 13 years old. They are on the road, at a campsite, in storage, or listed for sale in the classifieds. There are five million grand sales opportunities available to anyone willing to implore RV owners. Once your customer leaves your sales lot, they are available for solicitation from other dealers, repair facilities, internet service agreement firms, and quite possibly your own service agreement provider.

Five million RV owners don’t own a service agreement because no one offered the product, owners didn’t plan on keeping the vehicle long enough to warrant the purchase, could not afford coverage, or didn’t see the value in a service agreement. Purchase philosophies may have changed, especially considering increases in parts and labor costs, decreases in credit availability, and a general downturn in the economy. Yesterday’s pessimist might be today’s service agreement customer.

In evaluating your organization’s aptitude to capitalize on service agreement sales opportunities, answer the following questions:

1. Do we have a service agreement program that is  flexible enough to underwrite missed point of sales (MPOS) for new vehicles, post sale (vehicles not sold by your dealership), used vehicles, and service drive business?
2. Do we maintain a strong MPOS program to petition RV owners three or four times over a one or two year period after the new vehicle sale?
3. Is our service and parts department properly equipped to solicit customers when they visit our dealership for repairs or the purchase of parts?
4. Do we have a post sale program in place to reach out to RV owners who no longer have the protection of a manufacturers’ warranty?
5. Are we enrolled in a no-interest service agreement financing program?
6. Do all of our dealership employees understand we sell a service agreement program and that it is an indispensable part of our business?
7. Are specific, measurable, and attainable goals in place for MPOS, service drive, and post sale service agreement business?
8. Do we have compensation programs in place to reward all employees responsible for conveying service agreement leads to the F&I office?

Your dealership may realize a new revenue source with just a minimal initial investment and relatively little work. Keys to success must include making sure that everyone who has been or will be in your dealership is aware of the benefits of owning a service agreement. Use “silent salespeople” such as posters, hang tags, tent cards, and brochures throughout your dealership. Every customer who visits your store should see at least two silent salespeople, have the service agreement program mentioned to them at least once, and receive a mail piece/follow up phone call after the visit. Design a MPOS program to contact customers three or four times during the first two years of RV ownership. MPOS programs can be less intimidating when designed to include a mini customer satisfaction survey and/or dealership coupons. Hopefully your service agreement administrator offers a renewal program whereby your dealership can systematically contact current customers who presently own service agreements due to expire.

Additionally, potential customers who may never cross the threshold of your store should be emphasized as part of your sales efforts. Solicit your employees for creative ways to reach prospects. Ideas could include:

• Partnering with and visiting local campgrounds to periodically perform on-site minor repairs, conduct seminars, and sell service agreements.
• Collaborate with RV storage facilities to promote your dealership’s willingness to inspect/winterize RVs and sell service agreements.
• Reach out to those individuals selling RVs in the local newspaper classifieds, Craigslist, etc. Let potential customers know their RV will sell easier with a service agreement.
• Promote and sell service agreements at retail shows. Many people attending shows already own an RV.

Interest free financing for up to 18 months is an invaluable element and is available for service agreements two years or longer in duration. Your service agreement provider and agent should work with you to create, implement, monitor, and fine-tune your MPOS and post sale programs. There are willing buyers who understand the importance of protecting their investment. How would the sale of four or five additional service agreements per month impact your dealership’s financial performance? If you don’t establish a versatile service agreement program to solicit your customers - someone else will.

Bill Koster is the Vice President for RV & Specialty Products for Protective’s Asset Protection Division in St. Louis, MO. He serves on the RVDA Education Foundation Board of Directors as Secretary/Treasurer. Protective’s XtraRide extended service agreement has been exclusively  endorsed by RVDA since 1992. For more information on the XtraRide RV Service Agreement Program send an e-mail to buildprofits@protective.com or call (800) 950-6060, Ext. 5738.