Promising sweeping changes in its relationship with dealers, Monaco Coach Corp. laid out a franchise program for Monaco, Holiday Rambler, Beaver and Safari motorized RVs during its annual Dealer Congress, which took place June 27- 29 at the Venetian Hotel & Casino in Las Vegas, Nev.
Monaco’s bold new franchise program, which is being closely observed by competitors, rewards dealers for focusing showroom and sales lot attention on Monaco products. “I really, truly believe that five years from now we are all going to look back on this and say that this is one of the most monumental changes that has ever happened in the RV business,” Monaco Chairman Kay Toolson told more than 200 dealers attending the annual Dealer Congress.
Heralded by the company as the “Franchise for the Future,” the program provides financial incentives in a number of ways to dealers dedicating portions of their showrooms and sales lots to motorhomes built by the Coburg, Ore.
In return, Monaco promises to increase dealer’s revenues with incremental incentives and variable holdbacks to a degree that depends on the dealer’s commitment to the program.
“We know that in the short term, you’re going to be more successful and make higher profits than in the past because of Franchise for the Future,” Toolson said. “And we know that in the long run we’re all going to benefit with this program. Franchise for the Future is going to transform our industry, and others are going to need to follow. You (dealers) are going to demand it because this concept is going to upgrade our businesses, upgrade our customer services and upgrade the lifestyle that we all promote.”
In Las Vegas, Monaco also unveiled its 2006 product lineup of motorized and towable RVs that will be reviewed in an upcoming issue of RV Business. “We’ve loaded our (2006) products with a lot of great new features, including (one-piece) Panaview windshields and increased interior heights on the motorized side (with) exciting new floorplans and toy haulers in our towables line-up,” Toolson told dealers.
In his turn at the podium, Monaco President John Nepute said the company intends to solidify its position as a technology leader with continuing investments, including new advanced engineering software that will identify and correct potential problems during an RV’s design phase. And, he said, that Monaco is close to having paint reciprocators that will put base coat and clear coat on coaches automatically. “We feel (this) process will raise the bar on full body paint in our industry,” Nepute said.
Nepute told dealers that Monaco’s 2006 product lineup is targeted at popular selling price points. “Whether it’s our top of the line Class A’s or our low profile towables, we’ve targeted the leaders in each price point, and we’re going after them with exciting new features both inside and out.”
“Through Franchise for the Future we intend to help all of our dealer’s take advantage of our brand’s enviable position…” said Nepute. “We believe we can make all of our franchise partners significantly more profitable, more desirable and more valuable.”
Vice President of Sales and Marketing Mike Snell told dealers that Monaco’s new franchise format does not require them to sell Monaco products exclusively, but the company wants to increase its presence on dealers’ sales lots. “We hope you’ll see that if we’re a third of your floorplan, but 50% of your revenue, or even more of your profits, you’ll decided to increase our floorplan to increase your profits,” Snell said.
Franchise consultant Fran O’Hagen of Pied Piper Management Co. LLC, Monterey, Calif., who has worked with a variety of automobile companies — and has been instrumental in customizing for Monaco a franchising program tailored for the multi-line RV business — told dealers that Monaco’s new franchise program is intended to establish a strong Monaco brand presence in dealerships that will result in consumers being willing to pay a premium for Monaco products, which, in turn, will increase a dealership’s value.
“Today,” he said, “there is little focus on brand (and) no brand premium. Today, he said, buyers expect the same 20% to 30% off the MSRP, whether the manufacturer is Monaco or a new company that has been in business for a month and has no established reputation. “That is irrational,” O’Hagen said in presenting to the dealers a detailed review of the new franchise program, which was officially rolled out in Las Vegas. “It’s trained behavior, but we can train the customer to get out of that behavior.”
O’Hagen said that surveys of Monaco owners found that consumers would pay a 5% premium over other motorhomes for Monaco products. “When it got over five percent, it fell off quick,” he said. “But still, five percent is a lot of money, and it’s money that right now is being left on the table because there is no brand premium.”
To establish the program, O’Hagen said Monaco will keep MSRPs fixed for franchise dealers, but increase the invoice price of the coach by just over 2%.
“Your customers are paying a little bit more and that gives a little more money for us at Monaco to give back to you,” he said.