Bates International RV Blog

Peter J. Liegl has preached a simple and consistent sermon since forming RV manufacturer Forest River Inc. a dozen years ago and building the Elkhart, Ind., company into an RV industry powerhouse:  Sell the best products at the best prices and then provide quality service for them.

Of course, it’s not an unfamiliar mantra amount RV manufactures but few have built a dynamic company that sells nearly $2 billion in product a year.

“We still have the same philosophy as when we started out,” said Liegl, 64.  “If you stacked up everybody’s products and looked at them in depth and looked at what you’re getting for a certain price, somebody’s going to be best and someone’s going to be worst.  We expect to be the best.   We pay more attention to detail, we work harder and we’ve got better, experienced people.”

Liegl founded Forest River in 1996; two years after he was dismissed as president of publicly owned Cobra industries Inc., which soon went through bankruptcy.  Two years later, Liegle, who got his start at Coachmen Industries Inc., purchased the remnants of Cobra to form Forest River. 

Before a decade was out, Liegle had turned Forest River into the No. 2 RV manufacturer in the U.S.  In July 2005 he sold privately owned Forest River to legendary investor Warren Buffett’s Berkshire Hathaway Inc., Omaha, Neb., which in 2007 had $118 billion in revenue from such diversified subsidiaries as GEICO, Dairy Queen, Helzberg Diamonds and World Book encyclopedia.

Buffet made an offer to buy Forest River during a telephone conversation with Liegl just one day after he learned about the company.  In Berkshire Hathaway Inc.’s 2005 annual report, Buffett said, “Pete is a remarkable entrepreneur.  You can be sure that I won’t be telling Pete how to manage his operation.”

During the intervening period, Buffett has kept that promise, communicating with Liegle no more than once a year “If that,” Liegle said. “I see him at the stockholder’s meeting.  We just had one (in April).”  The annual meeting this year attracted some 26,000 investors, some of whom paid more than $150,000 per share of Berkshire Hathaway stock.

By Liegle’s account, Forest River’s annual sales have risen by about $400 million to just under $2 billion since the sale three years ago.

“The advantages of being a public or private company balance out,” Liegle said.  “When we were in the rapid growing stage, we were private.  But to raise capital, it’s a little more difficult for a private company.”

And even in a soft RV market, Forest River is holding its own, Liegl reported.  “We are bumping $ billion (annually) right now, “Liegle said.  “We’re a little ahead this year over last.”

Forest River is highly decentralized, with only about 60 employees in the Elkhard headquarters, most working in accounting and finance.  Forest River’s many dividing in accounting and finance.  Forest River’s many divisions are run by general managers in the field who report directly to Liegl and share in the financial success of the company.  “We have GMs who take a certain pride of authorship at each division,” he said.

With some oversight from headquarters, Forest River divisions make their own buying decisions.  “I don’t personally believe in centralized purchasing,” Liegl said. “If we have 15 or 20 people buying supplies, it seems like we are going to buy better than if we only had one person here buying. One person could become skewed.”

“There is some synergism in purchasing,” he continued. “If you look at all the tires we buy for something like 135,000 units a year, that’s a lot of tires. That passes on to all of our divisions. That’s our mentality. Same thing with wood, aluminum and anything else.”

Although Forest River is the No. 1 manufacturer of cargo trailers and No. 2 in shuttle buses, RVs make up three-quarters of the company’s revenues — 75% to 80% of which are built in northern Indiana. The company has, however, established towable RV factories in California and Oregon to overcome high shipping costs. “With a $200,000 motor home, it’s different,” Liegl said. “Trailers need to be closer to their market.”

Forest River’s towables range from entry-level folding camping trailers to high-end fifth-wheels. “Our strength is towables,” Liegl said. “We had a game plan to have product in each category.”

This year through March the Elkhart-based Corporation posted a 16.3% market share in towables for a No. 2 ranking and a 5.7% motorized share for a 7th place ranking, according to Grand Rapids, Michigan-based Statistical Surveys Inc.

Consequently, growth in motor homes remains a prime objective. “We’ve got a long ways to go (in motorized),” Liegl said. “It takes a little longer (to build motorized market share). We are not in all the product lines that we could be.

“We are going OK in Class A gas, and in diesels, we’ve made it around the corner. We are gaining momentum every day.” 

Despite Forest River’s explosive growth during the last 12 years, Liegl describes the company as “conservative” in many ways. “We don’t believe that we should go around base two until we go through base one,” he said. “Until we have our act together in a particular situation, there’s no sense expanding it. That’s our approach.”

Liegl, with typical candor, terms the RV industry’s current downturn as “a godsend” for Forest River. “Let’s say the industry shrunk in half,” he said. “That means there’s still going to be half left, and somebody’s going to get that half, which is still far more than I can produce. But I’m going to get my fair share. We might have to work a little longer and harder, but we are going to get it.”

Liegl said it’s already too late to be making adjustments to cope with the soft RV markets. “It’s not what’s happening today,” he said. “It’s what you did last week and the week before that and last month that is going to determine your results today.”

All in all, Liegl expects that the RV market, despite current setbacks, will recover in short order. “It’s a very cautious individual who buys RVs,” Liegl said. “That doesn’t mean they aren’t going to buy. They might buy something a little less than what they would if the economy was blowing and growing, but this is short term. I’m very confident of that.

“I don’t know why (people are worried). When I say short-term, this year is going to be tough as far as the economy goes. But that’s short term.”

The demands of the direct marketing industry require both out-of-the-box thinking and the capacity to review results and adjust spend.  Experts debate which to prioritize when recruiting new employees  

Considering using direct mail to generate some hot leads and fill your pipeline?  Here are some suggestions for writing a sales letter that keeps the telephone ringing.

Humanize your letter.  Write it so that it sounds like you are having a one-on-one conversation with the prospect.

Use a personalized salutation.  With all the sophisticated software on the market, there is no reason why you can’t address a letter to an actual person, not a position. It may cost you a few pennies more per letter, but it is worth it.

Keep in mind the “Attention, Interest, Desire and Action” formula in writing your letter:

Attention:  Use a strong opening statement or headline to capture readers’ attention.  Develop a hook that grabs readers and prompts them to continue to read.

Interest:  Expand on the benefits promised in the headline.  Let prospective customers know why buying from you is in their best interest.  Include testimonials from satisfied customers.

Desire:  Appeal to readers’ emotions and their favorite radio station, “WIIFM” – What’s in it for me?  Keep in mind that desire is an emotion.

Action:  Create a sense or urgency in your letter and ask for action.  Tell readers what is expected of them.  For example, you can ask prospects to fax the letter back to you with a time and a date that is convenient for you to call.  If you’re presenting a special a special offer, set a time limit for 3response.  The idea is to say, “Do it NOW.”

Include a P.S.  People often read the end of a letter first (to see who sent it), so a P.S. can help catch their attention.

RESTON, Virginia– Despite record-breaking fuel prices, typical RV trips remain the least expensive type of vacation, according to a new study comparing vacation costs.

PKF Consulting, an international consulting firm with expertise in travel and tourism, found that “typical RV family vacations are on average 27 to 61 percent less expensive than other types of vacations studied.”

Even factoring in RV ownership and fuel costs, the study reveals that RV family vacations tend to be significantly less expensive than other types of vacations.

“This study re-affirms what RVers have long known, that RV vacations deliver greater economic value compared to other types of vacations,” says Richard Coon, president of the Recreation Vehicle Industry Association (RVIA). “RV vacations continue to be the most affordable way for a family to travel because of the tremendous savings on air, hotel and restaurant costs. And these savings offset the cost of fuel.”

PKF analyzed major costs that would be incurred by a family of four taking eight different types of vacations for three, seven, 10 or 14 days to such popular travel destinations as the Grand Canyon, Cape Cod, and Napa, Calif.

“On average, RV vacations were more economical than the other types analyzed in all but one case,” says Kannan Sankaran, PKF’s lead researcher for the study. “Even as fuel prices increase, our findings show that almost all RV vacations are still significantly less expensive than non-RV ones.”

Fuel prices would have to more than double for typical motorhome vacations to become more expensive than other forms of travel, according to PKF Consulting. The study also shows that fuel costs would have to more than triple for trips in lightweight travel trailers or folding camping trailers to be more expensive than the least expensive non-RV vacation. Almost 80 percent of the RV market consists of towable RVs, including lightweight units which can be towed by car, van or pickup.

RV owner John Bargo, a computer operator from Milwaukee, Wisc., agrees with PKF’s findings. “When you figure the cost of driving in a car, staying in hotels and eating in restaurants, it’s a lot more expensive than bringing your lodging and food with you.”

Dennis Silipena, a 55-year-old service and parts manager from Hammonton, N.J., also appreciates the affordability of RV travel. “I’ve owned an RV for 25 years and I’ve enjoyed significant savings over other types of vacations. I pay $30 to $40 to stay in a campground rather than $150 to stay in a hotel. And it’s a much nicer experience staying in my RV.”

The study showed that a family of four traveling from Phoenix, Ariz. to Napa, Calif., with their folding camping trailer for 10 days, staying in campgrounds at the local average of $33 per night, would save 52 percent, or $2,379, over the same trip taken by car, staying in hotels averaging $122 per night and eating in restaurants. Taking the same vacation by a Type C motorhome would save $1704, or 37 percent, over going by car.

A week-long family vacation towing a conventional travel trailer from Salt Lake City to the Grand Canyon compared to the cost of taking the same trip by airline, renting a car and staying in a hotel would be $2,647, or 65 percent less expensive.

Shorter getaways by RVs were also found to be more economical. For example, a family taking a three-day vacation from Pittsburgh, Pa. to Lancaster, Pa., would save $323 or 31 percent by towing a conventional travel trailer, rather than going by car, staying in hotels and eating in restaurants. The savings would be even greater — $889 or 52 percent — for families taking the same trip by a Type C motorhome rather than flying.

Among the RV vacations analyzed by PKF, even those taken in an ultra-luxury Type A diesel motorhome were less expensive than flying and staying in a hotel. Only a family taking a vacation by personal car with hotel or renting a condo and cooking for themselves would cost less than a family taking a trip in a Type A motorhome. “Owners say the added space, comfort and convenience while traveling justify the investment in a Type A,” noted Coon.

In addition to major expenditures required from the start to finish of each vacation, PKF factored in an estimated cost of ownership of the RVs analyzed: a folding camping trailer, conventional travel trailer, and Type C and Type A motorhomes. Research included documenting average ownership periods, residual values, annual days of use, insurance and applicable interest deductions.

“RV vacations are a great way for families to spend time together and bond,” said Coon. “Whether it’s in a luxury motorhome or a basic folding camping trailer, RV vacations offer value that lasts a lifetime.”

The PKF study considered only quantifiable economic factors, not the comparative quality of each vacation. As a result, the convenience, flexibility and quality family time cited as major benefits of traveling in an RV could not be addressed.

MANTECA, Calif. — Thirty-two of the 41 complaints relating to code enforcement in Manteca in the first five days of June were related to illegally parked recreational vehicles and trailers.

That’s what the city’s lone code enforcement officer Greg Baird — who describes himself as the most hated man in Manteca — told Rotarians at their noon luncheon on Thursday.

The code enforcement officer said there is a divided camp among residents. There are those who want to show off their vehicles and others who don’t want their street to look like an RV storage yard.

“No one is happy when you go out on a call” he said of the parking restrictions. That is, until you tell one party, “You can’t do that any more.” Then the person complaining is satisfied.

Nothing can be in the front yard set back - that’s usually 20 feet. Once you get beyond that 20 feet residents are allowed to have one RV on the property.

He said there is a proposed new regulation that RVs will have to have a three foot clearance from the house as well as three feet from the fence. If that goes through it will inhibit the parking of large vehicles in the side yards of homes, he noted.

The proposed ordinance may require any recreational vehicles to be parked on a paved surface eliminating storing anything on grass.

Baird said he deals chiefly with code violations and the 700 pages of rules and regulations that he has to enforce. He said that staff has now recommended the City Council hiring a second officer to monitor code violations in the city using redevelopment agency funds in the upcoming budget cycle.

August 5, 2008 – Las Vegas, Nevada joins destinations worldwide in recognition of World Tourism Day, an event held each year on September 27.  Sanctioned by the U.N. World Tourism Organization (UNWTO), the event provides an opportunity to look beyond borders and celebrate the unique opportunities created by travel and tourism.

In today’s dynamic global marketplace, RV rentals are a vital part of the Travel/Tourism industry.  Emerging from one of the strongest decades in recent history, the tremendous growth of the RV rental industry can be attributed to the “Baby Boomers’ ages (55-64).  Baby Boomers have an expected growth factor of 48% through 2010.  That’s more than 5 times the expected total population growth of 95.  The potential for RV rentals, as well as purchases, has never been higher.

“The desire to visit famous travel destinations brings millions of multinational tourists to America every year.  The rental of RV’s offers more freedom, control, and flexibility than any other travel option.” says Sandra Bate, President/CEO of Bates International Motor Home Rental Systems, Inc.  “International Tour Operators with their massive client databases are a vital force in the RV rental market.  The North American demographic profile of rental customers encompasses an expanding range of lifestyles.” says Bates.  Bates is an International Motor home rental franchise system; with locations throughout North America.  The company has its headquarters in Las Vegas, Nevada.

Travel and tourism benefit society in countless ways.  It is one of the United States’ largest industries, directly employing 7.5 million people and generating tax revenues of about $110 billion.  It ranks fifth among 20 major private industry sectors, according to the Travel Industry Association.  Travel expenditures within the U.S. total $740 billion.  The UNWTO estimates that international tourism arrivals reached close to 900 million in 2007, up 10 percent from 2006, according to the Office of Travel and Tourism Industries at the U.S. Department of Commerce.

Activities surrounding World Tourism Day in the United States are coordinated by the Travel Industry Association, a Washington-based trade association that represents the common interests and concerns of travel in America.

How do you respond when someone asks you, “What do you do?” If you’re like most people, when someone asks you that question you just wing it or improvise.  Yet, a carefully worded and well-delivered personal description of exactly what you do for a living is an opportunity to move relationships forward.

Know Your Personal Commercial

Stephan Schiffman, in his book Make It Happen Before Lunch (Mcgraw-Hill, 2000), offers three helpful points to consider when developing your personal commercial.

     1.  Is your personal commercial short enough to deliver comfortably in a social setting in 30 secondsor less?  (Be prepared to rewrite and revise your commercial until it sounds natural.)

     2.  Is your commercial casual enough to be delivered conversationally – not as a “hard sell” sales pitch?  (Remember, you’re talking only about that which you do, not about what you feel you could do for the person you’re talking to.)

     3.  Does your commercial focus specifically on how you add value to other people’s days?  (Think about the problems that would arise during the day if you didn’t do what you do, and ask yourself how people benefit from actions you undertake.)

Practice your personal commercial until you can recite it instantly upon being awakened from a deep sleep.  It has to come across naturally, seem spontaneous, and above all, be true, explaining exactly what you do during the day without apology or hesitation.

Your biography must be brief, casual and conversational and focus on what you personally do to add value…and it must be delivered with a smile.

Stephan Schiffman is president of D.E.I. Management Group.  For information, call 1-800-224-2140 or go to www.dei-sales.com.

Challenge Paperwork

The most precious asset we possess, not only in sales but also in life, is time.  Few would argue with that.  Or that one of the great squanderers of time is excessive or unnecessary paperwork.  Top-earning pros agree that periodically challenging paperwork cannot help but boost sales volume.  Here are key thoughts to take with you.

     1.  Letter, memo, report, whatever – if it’s delegable, palm it off.

     2.  If you’re not sure it’s worthwhile, eliminate it.  At least try it and see if it makes a difference.

     3.  Block out specific times of the day or week to do paperwork.  It gets done faster and more efficiently that way.

     4.  Be sure every chore you handle has a bottom-line goal.

     5.  Before composing a letter or memo, ask yourself, “Can it be done faster and cheaper by email?”

     6.  Assign a clerical person to screen incoming mail.

     7.  Separate routine from unusual correspondence.  Try to avoid reading mail more than once.

Think Big

Successful people believe in themselves.  They visualize themselves as being successful, and they never let failure or adversity stop them.  If you can see yourself accomplishing something, you can accomplish it!  Your actions, thoughts and even the way others perceive you is determined in large part by how you perceive yourself in your subconscious mind.  So before every sale, visualize yourself…

     1.  Hitting it off with the person that you are meeting.

     2.  Coming across as being knowledgeable and informative, and

     3.  Getting the sale!

Remember, you will rarely ever exceed your own expectations of yourself, so it is important that you visualize yourself achieving success.

You know the expression “good things come in small packages.”  The same sentiment can apply to small businesses too.  Entrepreneurs don’t have to set their sights on building a mega-million-dollar business to enjoy a highly satisfying and lucrative entrepreneurial career.

Financially speaking, research has shown that small-business owners enjoy an average net worth that is three times that of their salaried counterparts.  Business owners also tend to out-perform salaried employees in terms of higher annual incomes, savings, and stock portfolios.

Parents, college career counselors, and students should also take note that women are more likely to achieve $100,000-plus annual incomes faster through business ownership than average professional careers in law or medicine.

Even though business ownership offers considerable potential for financial reward, entrepreneurs still talk to me about their overriding desire to control their work destiny.  They don’t want to work 18-hour days or feel chained to inflexible schedules that conflict with family and leisure interests.  Their attraction to business ownership is more about creative pursuits and career flexibility than monetary gain.

The International Franchise Association has officially launched the first phase of an integrated awareness campaign designed to educate Beltway opinion leaders about the importance of franchising to the U.S. economy.

The franchising industry has seen record growth in recent years.  A new economic analysis released last month shows that franchising expanded by more than 18 percent from 2001 to 2005, adding more than 140,000 new businesses and 1.2 million new jobs to the nation’s economy.  Direct economic output of franchises grew by more than 40 percent to $880 billion during the five-year span.

“The growth we have seen in the franchising industry is expected to continue, even during the current economic downturn,” said Matthew Shay, IFA president and CEO.  “As policymakers address laws that impact the small business community, such as immigration and health care, we want them to consider the impact that potential reforms would have on franchised businesses’ ability to contribute so significantly to the economy in the future.”

A key component of the campaign is print and online advertising to educate opinion leaders about the franchise model, the product support and training it provides and the many diverse options and opportunities for people to own their own business through franchising.

The testimonial ad series will introduce actual franchises and franchisors and feature the campaign’s theme:  Franchising: Building Local Businesses, One Opportunity at a Time.  The brand was developed through extensive opinion leader testing to communicate how franchising helps build businesses comprised of local owners who support communities all across the country.

The first ad that appeared in Roll Call and National Journal features Dunkin’ Brands CEO Jon Luther and Duke Carvalho, who owns 14 stores in the greater Boston are.  With the headline, “America Runs on Dunkin’.  Dunkin’ Brands Runs on Franchising,” the ad calls to action support for franchising and the dream of business ownership.

A new Web site, www.buildingopportunity.com, was developed to support the campaign and provides additional information about the economic impact of franchising, including access to the “Economic Impact o Franchised Business” report, which can be searched by congressional district.  In addition, the Web site includes a copy of the Dunkin’ Brands advertisement.

We humans have an insatiable desire for meaning in our lives. We crave purpose, to be part of something that is larger than ourselves, to leave something for posterity. It’s a basic human trait.

Employment as we’ve implemented it customarily achieves quite the opposite. It not only doesn’t add to our life’s meaning, it detracts from it. It gets in the way of living a meaningful life.

What a calamity! It almost makes me weep for the lost potential in the world.

Why is it that the baby boomers can’t wait to retire at 55, even though they’ll likely live for 25 or more years afterwards? If work was meaningful to them, they wouldn’t quit. Many of these early retirees are going into another career that makes them feel more useful. Highly paid technologists are entering the fray of education, becoming low-paid teachers. Retirees volunteer at church or school, Habitat for Humanity, or Greenpeace. Doing so gives them purpose.

For some unfathomable reason we’ve concluded that we must first waste thirty or forty years of our lives before we find a sense of importance. A career is just an exercise in marking time. It is this feeling of meaninglessness that vexes me most—the thinking that work and life are separate. If we found our work meaningful, we wouldn’t feel that way, and all this ‘work-life balance’ nonsense would disappear, and good riddance.

We mostly work for money, but money does not give anyone purpose, nor does it motivate nearly to the level of its reputation. We think it does, but the people we think get meaning from money actually get it from power and social status. A raise can get someone to change jobs, but the motivation afterwards is minimal.  Yes, people will work hard for money, but they will not set aside their egos.
Quite the opposite, in fact. No one goes into work excited about making another paycheck; does anyone sound excited when they say, “Another day, another dollar?” No. People get excited about what they feel they will accomplish, about making a difference.

People are emotional creatures. We make decisions based on emotion and rationalize them afterward with facts. Yet we act like work is rational, and based on rational decisions. Nonsense.

In order for work to be meaningful, a company has to stand for something, some principal that has emotional content. I call this the Cause, and Guy Kawasaki of Macintosh fame calls it the Dream.

Let me illustrate with some examples.

Whole Foods was founded in 1978 with $45,000 in capital. In 2005, it had sales of roughly $4.6 billion, profits of $160 million, and a market cap of $8 billion. Whole Food’s motto: Whole Foods, Whole People, Whole Planet.

You’ll notice the motto doesn’t say “A Whole Lotta Moola.” Whole Food’s culture is built around being part of a whole: the food they sell, promoting healthy living, helping those less fortunate, and the profits they make, are inseparable. Their Cause is contained in their name. Many people work there because of that and love what they do, though the day-to-day tasks differ little from those of a Smith’s employee.

The foundation on which Thomas Watson, Jr. built IBM, and the Cause that made it the great company it was under his direction, was “respect for the individual.”

In a 1961 progress report to employees, Watson, Jr. said, “I feel strongly that there are some priceless ingredients in this business which we will never change—things such as our concern for the individual, our sense of fair play and our belief in services. For our fine reputation as a company is based on nothing more and nothing less—than respect for the individual, integrity and personal values of our people. You are, in fact, the IBM Company.” There is no mention of computers, technology or profit.

Defining a Cause is a difficult exercise, an emotional exercise. It all starts with the founder, the heart and soul of the company. What is your cause? Why did you start this business? Typically you’ll find that it isn’t about money, it’s about something else. In my case, I became an entrepreneur to create a grown-up working culture, where we were all adults, rather than the culture from which I came that treated employees like children.

A Cause doesn’t have to have anything to do with the product or service the company provides. It could be creating a family-friendly workplace or helping employees grow as individuals. The Cause is found where your passion lies.

And if you’re not a founder you need to find your own Cause, and find a company that is aligned with that Cause. Or create change from within.

Whatever you do, don’t sit at work and wait for meaning until you turn 55 or 60.
What a waste of a life.