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A Mammoth in the Motorhome Market

Motorhome Market
Texas-based motorized-only dealership Motor Home Specialist is a powerhouse, selling 500 coaches in 2009.

Motor Home Specialist CEO Donny O’Banion is pictured in front of a recently sold Prevost coach. The dealership sold an impressive 500 motorhomes in 2009.

It’s no secret motorhomes are a tough sell in this economy. Many dealers who once thrived in the segment are either gone or now exclusively towables. Yet, there’s still a market for highline coaches and Motor Home Specialist has found it.

As evidence, take a look at last year’s sales. The Texas dealership, located along I-35W south of Fort Worth, sold more than 500 units in 2009, says CEO Donny O’Banion. Considering that Motor Home Specialist is just 14 years old, and only became a franchise dealer in 2004, moving that many units seems like no small feat.

Consider, too, the Dallas-Fort Worth Metroplex – a 12-county region with more than 6 million people – already had a number of established motorhome dealers, and it becomes clear that Doug O’Banion, Donny’s father and company founder, knew there was a business opportunity.

Besides a good location, the younger O’Banion believes presentation is fundamental to selling lots of coaches.

“As far as I’m concerned, I’m the original owner of that coach, so I want them right. We work really hard with our manufacturers from that standpoint and we’ve got a lot of them to actually change their business model in how they’re sending out coaches,” he says. “I’m not trying to make a bunch of money on the manufacturer. I’d rather them send me a coach that needs little to nothing upon arrival. As I’ve explained to them, ‘It’s a heck of a lot cheaper on you guys to fix it at the factory than it is to pay me to fix it once it’s here.’”

Service Manager Bill Heath checks under the hood of a motorhome. Each coach that Motor Home Specialist receives goes through two intensive pre-delivery inspections before being offered for sale.

Intensive PDIs Mean Less Problems
O’Banion has two teams of six shop staffers whose jobs are to conduct intensive pre-delivery inspections, or PDIs, on new and pre-owned units as they arrive on the 20-plus acre lot in the little suburban town of Alvarado.

“We have a 200-point checklist that we hit these coaches with,” he says. “We do a complete prep on the coach when it comes in, we fill the tanks to full capacity, and the water heater and furnaces are lit. We know it’s working. We gave the manufacturers our checklist, basically, to try to get them to implement that at their factories.”

It was a smart move; O’Banion says his last two units from Entegra Coach, a highline builder in the Jayco family, arrived in Alvarado needing absolutely nothing. Of course, before the units rolled into town from Indiana, each one underwent a days-long scrutiny to ensure everything was perfect.

“It’s less expensive to have it right at the factory, so it’s good to see those guys doing it,” he says. “At the end of the day, they’re saving money.”

A unit’s first PDI (it will get two from Motor Home Specialist before a customer takes it home) also includes a chassis paint job, he says, to provide protection against rust. Another uncommon step at the family-owned store: technicians use power washers from the roof down to check for water leaks around air conditioning units, vents and slides.

Again, the focus is on doing everything possible to make sure the coach is perfect as possible for the customer at the time of the sale.

Motorhomes are lined up one after another on the dealership’s large sales lot. While other dealerships have reduced or even eliminated their motorized offerings, Motor Home Specialist continues to do very well in the market.

“We concentrate so much on high-volume sales, that’s why we’re not looking for that ‘let’s get ‘em back in here and try to make a lot of money in the service facility’ approach,” O’Banion says. “I want the customer to have as good a run as possible with as few service issues as possible, both on the new and pre-owned side, and have a good experience. They’re going to be more apt to trade and do business with you again and send their friends and family to you. We’re trying to pick up the dollars, not the pennies.”

Selling Customers on the Merits of Service Policies
Still, O’Banion is realist who knows it’s not a matter of “if” something in a coach will break, but “when,” so that’s why his sales staff is tasked to offer service policies to all buyers.

“It’s a small part of your revenue, but more so than that, the people who purchase the service policies are better, happier customers. They never seem like they’re disappointed when the thing breaks and they’re talking about a $100 deductible rather than a $1,400 Onan generator part,” he says. “Their level of service throughout the country is going to be better as well. It seems like the service facilities throughout the country that didn’t sell the unit to the customer are a lot more apt to want that customer when he has a service policy than if he is a cash customer.”

Although service policies are often sold by at the finance & insurance (F&I) desk in many dealerships, O’Banion prefers his salesmen first broach the subject with customers.

“Our closing department, obviously, push them as well, but I think that they’ve got to be a second line of defense,” he says. “If the person has enough confidence in a salesman and the company to purchase a $250,000 motorhome, it’s going to be easier for him, with that type of rapport, to be able to explain the benefit of the service policy.”

Motor Home Specialist has three custom-built, 65,000-pound jacks that can lift even the biggest Prevost coaches.

O’Banion (left) is pictured with Sales Manager Mark Griffith and COO Robert Brake next to a motorhome.

Plus, being asked for even more money beyond the sticker price at the F&I desk is simply insulting, O’Banion says, recalling similar circumstances when he purchased a car.

“If the value of the service policy has been built into the coach from the inception and throughout the sales process, then it’s not extra money, it’s money they’ve already spent,” he says. “When they go to the table, it’s not having to make another decision. The decision was already made during the sales process. It’s just much smoother and I think you’ll sell more service policies doing it that way.”

Dealership Offers Perks to Keep Techs Happy
O’Banion believes presentation is an important factor even for employees. In Motor Home Specialist’s 22-bay service department, his 12 certified technicians enjoy perks not usually found in other dealerships.

“They have their own break room. We keep two refrigerators stocked with food and drinks and water. We do that in-house so they’ve got breakfast and lunch every day that’s made available to them in a full kitchen back there,” he says. “Everybody gets a paycheck. That’s what you get for going to work, but we’re trying to give them a nice place to work.”

To even out that wide-ranging Texas weather, the bays are air conditioned and heated, too. It may seem like a luxury, but O’Banion has a different take.

“When we started off, this was a small company and there’s not a single job at this place that I haven’t done 150 times. It doesn’t matter. I’ve cleaned the floors, I’ve cleaned the coaches, I’ve changed the oil, you name it,” he says. “I truly have a real respect and appreciation for every job here because I’ve done it and I know what it takes.”

As for capabilities, Motor Home Specialist can handle most anything that comes its way, including paint and bodywork. A trio of custom-built, 65,000-pound jacks can lift the biggest Prevosts, so access isn’t an issue, but O’Banion draws the limit at major chassis work such as engine rebuilds and bent frames.

“If you have a Caterpillar or Cummins issue, we can do it from here, but at that point, we’re basically working as a middleman even getting the parts approved. It only slows the process. If it’s a major component like an engine, a lot of times, you’re better off being at the Cat or Cummins dealer. They’re going to be able to expedite the parts and troubleshoot it fast,” he says. “We always deal with customers firsthand and give them options.”

When the shop isn’t taking handling the preparation of hundreds of coaches each year, it’s doing minor repairs on pre-owned and trade-in units destined for resale. O’Banion knows that kind of service work is just the tip of the iceberg.

“As far as going after paint and body from a standpoint of bringing in outside customers, it’s not anything that I’m actively going through,” he says. “It is something that I definitely want. There’s a tremendous amount of money in that business, but right now the volume of sales that we’re doing is all we can do to keep up.”

Dealership Has Ambitious Plans Moving Forward
The latest addition of an adjoining 32-acre parcel should help O’Banion’s efforts. The plan is to expand the service department to a total of 50 bays and enlarge the parts department to handle more retail business. Another 30 or staffers will be needed, too.

O’Banion has set a lofty 1,000-unit annual sales goal for the company, but he admits he first must grow his store to handle that business.

“For me to get to 1,000 coaches, I can’t do it with the same amount of people and the same amount of facilities,” he says. “I’ve got to build the road first before we can put in the houses.”

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