Looking back a decade after the fact, the stressful times resulting from the Great Recession – with its mass dealership closings and vanishing customers – seem to be disappearing in the industry’s rearview mirror.
In many ways, though, the events of the late 2000s are still shaping the business today. For some, it was a devastating time. For others, it was one of great opportunity.
Case in point: San Diego-based RV Solutions.
In 2009, Tom Fetter, the dealership’s current owner, longtime entrepreneur and civic leader in San Diego, had no intention of becoming one of the area’s leading RV dealers. In fact, he had no experience in the industry at all.
What Fetter did have was a newly developed dealership property, an unexpectedly unsigned lease and, importantly, an entrepreneur’s sense for finding opportunity in crisis.
Matt Leffingwell, RV Solutions’ vice president and general manager, tells the story from a unique perspective: He had been leading negotiations on behalf of the intended tenant back then and today serves as a key member on the team that is now making big waves in Southern California.
“I was leading the team at our dealership, 10,000 RV Sales Inc., negotiating with Tom to lease this great property he had just built with the intention of moving in during 2008,” Leffingwell says. “And then, the bottom just completely fell out – both for our company and for so many others in the industry. Within four months that company was out of business and all but two or three of the dealerships in the area went out of business.
But then Fetter’s entrepreneurial instinct kicked in.
“At heart, Tom is an entrepreneur, and while he didn’t have deep experience in the RV industry, he had been, among many other things, one of the largest Bayliner dealers in the country at one point,” Leffingwell says. “He saw what was happening in the market. In 2007, there were 800 trailers sold in San Diego. In 2008, it was about 100. He knew it was a big market and that those conditions wouldn’t last. So, he looked around and weighed his choices.”
What Fetter had was 6 acres of land and two buildings custom-built for an RV dealership. What he was missing was a tenant and an RV expert. The first he chose to create on his own, and the second happened to be sitting right across the table from him.
“He had this property, but there really was no one looking to expand or to get into the business, so he decided to do it himself. He needed help, so he asked me if I’d come work for him and essentially build the new dealership business from scratch. Being suddenly unemployed, I happily agreed,” Leffingwell says with a laugh.
The RV Solutions management team includes (from left) Louk Nienhuis, general sales manager; Debra Castellano, CFO; Matt Leffingwell, vice president and general manager; Julie Lopez, service manager; Jesus Alonso, assistant manager for service; and Chris Visconti, parts manager.
Building a Dealership from Scratch
And so, Fetter and Leffingwell got to work. With two modest buildings – one now a parts and service facility with 12 bays and another sales building totaling less than 10,000 square feet of under-roof space combined – the pair started RV Solutions in 2009 with little more than a handful of consignment units and storage space on offer.
“We did that for a while as we started negotiating with GE for a flooring line. We got it and then immediately started buying new product,” Leffingwell says, noting that the dealership now proudly sells a huge selection of Airstream trailers and motorhomes as well as units from Dynamax, Forest River, Lance, Thor Motor Coach, Pleasure-Way and Highland Ridge RV. “Now, we hardly fit in our 6 acres and we’ve been searching for new space to expand.”
From its modest beginnings, RV Solutions has rapidly evolved to become one of the leading dealers in the San Diego market, with gross sales in 2018 projected to reach between $35 million and $40 million.
Leffingwell attributes some of the dealership’s success to having been bold enough to launch in an economic downturn, which helped the business build relationships with some of the leading manufacturers in the business in a time when the manufacturers were hungry to move product and find new accounts.
“On the bright side, powering through the Recession meant there were a ton of great product lines,” he says. “Of course, the manufacturers were skeptical. But I had a long history in the business and Tom was, of course, very well established and financially stable, so they took a shot on us. Because of that, we got some lines – from Airstream for example – that we just wouldn’t be able to if we were to start up today.”
But getting there certainly hasn’t been easy, according to Leffingwell.
“From the beginning I was excited to build a dealership truly from scratch, but I vastly underestimated how much there was to do,” he recalls. “Hiring, putting in place every internal policy and process. It was a lot of hard work.
“I had been in management for a dealership for 10 years, so I knew what had to be done,” he adds. “But I was used to tweaking the systems in place, not starting from scratch. Thankfully, you don’t need everything to get started, it can evolve in time.”
By opening at the height of the Great Recession, RV Solutions was able to secure a much-coveted line of products, including Airstream trailers. Other dealers who had the territorial rights to such products went out of business when RV Solutions was getting started.
‘We Are the Hometown Dealer’
Today, the dealership employs 53 people full time. Of those, about 40 work in parts and service, which has quickly become a core focus of the business.
“While there were probably 10 to 12 dealers pre-Recession, today there are probably only about four. But they’re generally bigger because of consolidation and many are multiple-location dealers,” Leffingwell says. “That means that for us to compete, service has to be a major focus. We really played our smaller size and that family focused environment to become a part of what sets us apart from our competitors. We are the hometown dealer.
“Every dealership says they’re very family oriented, but we do live it,” he says. “There is a big focus on spouses and kids and grandkids here when it comes to our employees.
And that extends to customers as well.
“We really have an old-school, treat-people-like-they-want-to-be treated approach. We get a lot of people that come in from other dealers with tough stories about not being treated well. We don’t do a lot of high pressure, it’s not that kind of atmosphere.
“We have a completely different vibe, but it’s hard to put into words without it sounding like a commercial. But you feel it when you come in,” Leffingwell says. “A lot of that goes back to Tom. When he opened this business, he said, ‘You’ve got to make a profit, but there’s no profit you can make that is worth selling my reputation. Do the right thing. Take care of people.’
“That’s a long-term practice. In the short term its harder. The pirates, they gain in the short run, but over time it pays off to do the right thing,” he adds. “When you’re brand new, you often feel the pressure to do whatever it takes to get profitable, but he resisted and focused on his long-term vision.”
Big Business, Little Space
That customer-centric approach also applies to the service department, which does its best to operate efficiently in what is undeniably a tight physical space.
“Space is the biggest limitation for us, both in product lines and service,” Leffingwell says. “We would love to triple our footprint with Airstream, but we just don’t have the space to do it. For service, we can only fit 25 to 35 units here on the grounds at any one time, so we must be efficient to keep things moving. But even then, the demand for service is so high that we have a three- to four-month backlog.
“That’s a tough situation,” he adds. “It’s hard to not make customers angry, particularly those that did not purchase from us. We do prioritize our customers, but there’s a real art to doing that without alienating other potential future customers. We don’t take walk-ins – only by appointment, and then if someone cancels we call our customers first. And when we sell a unit to a customer we immediately put them in the queue for an appointment. They can always cancel if everything is flawless, but just in case, you’ve already got a spot in the line.
“Of course, we do always have techs working on units in-house for sale, so if someone has an emergency that will keep them from camping we will get them in.”
By putting a heavy focus on creating a great customer experience – with touches like a 1950’s-style diner-themed café replete with a soda fountain machine – RV Solutions has made the dealership a go-to source for today’s changing customer demographics, which are trending younger and shifting to become a far more knowledgeable and discerning customer.
Service Advisor Daniel Reid, Technician Rick Garcia and Service Manager Julie Lopez (from left) get details on a unit for a customer at RV Solutions.
With a large military presence in San Diego and plenty of nearby outdoor recreation opportunities – including a sand dune recreation area – toy haulers, for example, are becoming a hot commodity.
“Pre-Recession and post-Recession, customers are totally different,” Leffingwell says. “Beyond just age, today’s RV buyers are just more knowledgeable. They are also more price conscious and they have a far greater aversion to debt. Pre-Recession, if someone had the down-payment and could handle the monthly, they were in. Probably 90 percent of customers were financing back then. Today, that’s probably closer to 65 percent.”
To serve these more discerning and knowledgeable customers, RV Solutions has had to build an equally knowledgeable staff, both in sales and techs. In fact, finding the right personnel has been one of the biggest challenges for RV Solutions. Being located just 100 or so miles south of Los Angeles, one of the biggest RV markets in the world, and combined with the high cost of living in San Diego, the dealership has had to get creative to find and retain the right talent.
“During the downturn, a lot of the talent in this area went to where the work was and where the cost of living was less expensive,” Leffingwell says. “So, we’ve expanded our recruitment area by offering transit options like a shuttle that we’ve run up to Corona, about 60 miles away. We were drawing people from that area, so we just had to do whatever it takes to make it work for them.
“Happily, it is getting easier as we build the strength of our team,” he adds. “Great, talented people tend to attract other talented people, and we’re seeing that across our company. The better you do as a company, the more known you become, and the better people start to seek you out.”
Of course, those more talented staff members command higher pay.
Leffingwell acknowledges, with a laugh, that it’s money well invested in the future of the company: “As Tom likes to say, ‘If you want the best, you to have to pay them the best. If you pay peanuts, you get monkeys.”