Read this and other stories in the September issue of Woodall’s Campground Management now on its way to readers across North America.
Chicago-based Equity LifeStyle Properties Inc. (ELS), the nation’s largest RV park owner/operator, is currently testing a rather unique new promotion involving its Thousand Trails membership-based “preserves” and a few aggressive, multi-store RV dealerships in an effort to “leverage that great lifestyle and open up to more of the RV universe.”
It’s all part of a new “global relationship” ELS is trying to foster between the industry that produces and sells the RVs and the American public that purchases and recreates in those leisure-time products – a relationship that ELS CEO Thomas Heneghan and President and CFO Marguerite Nader feel is long overdue.
Although there are other potential new components on the table, such as social media initiatives and online parts and accessories sales, the crux of ELS’s new program is that a consumer buying an RV from any participating dealer will receive a free year’s membership to access parks in one of four zones among the 80 Thousand Trails preserves in 22 states and British Columbia.
“What we’re really trying to do is develop products in relation to the RV dealer that help him and us,” says Heneghan, whose 4,000-employee company also operates 90 Encore parks as well as some 200 manufactured home communities. “We think that buying an RV embedded with the lifestyle aspects is a natural and should be something that happens much more frequently than it does. And we designed this kind of dealer program to find RV dealerships across the U.S. that were excited about the opportunity to sell RVs to consumers along with the lifestyle that comes attached with that vehicle so that they’re getting the hotdog and the hotdog bun all at the same time.
“So, that’s been the program,” Heneghan told Woodall’s Campground Management, “but it’s really part of a larger strategy. We don’t really just want to have that one event. We want to have a relationship with the RV dealerships that understand that staying in contact with the customer – meeting that customer’s needs – is going to increase his ability to sell more vehicles over time and get that repeat buyer.”
ELS Approaches Dealers
Heneghan says publicly held ELS, which posted 2011 revenues of $580 million, first approached several leading RV manufacturers with the idea, but ultimately turned to retailers as the front-line contact on the premise that a Thousand Trails-dealer connection represents “a sales tool so the guys selling the vehicle can talk about all the geographical areas you can take this RV to.”
In the process, ELS’s management learned that “there was not very much awareness of what the consumer did with the RV after it left the dealer’s lot” because retailers did not stay in touch with their customers after the sale.
ELS conducted a “soft launch” of the program in March in eight dealerships among those operated by La Mesa RV Center, San Diego, Calif.; Campers Inn, Merrimack, N.H., and McMahon’s RV, Irvine, Calif. And plans call for accelerating the program in the coming months. Thus far, several hundred memberships have been conveyed to new unit buyers through the trial membership program, reported Heneghan, whose company has also been test marketing online parts and accessories sales at www.myrvmarket.com as part of its new initiative.
Response ‘Almost Infectous’
“The initial response has been so positive, almost infectious,” he noted. “We wanted to see how the summer went. We wanted to make sure we could fulfill the expectations all the way through for the customer” before formally launching the program nationwide.
In its drive to become more of a household word in the recreational vehicle sector, a move in which former Affinity Group Inc. and Thousand Trails President Joe McAdams has played an advisory role for ELS, all of the dealerships have initiated their own retail advertising for the program. In some of the ads, the dealerships are co-branding both Thousand Trails and their retail store.
“We put our sales people in contact with the RV dealership sales people,” noted Heneghan. “There’s coordination with respect to how to market the product with the RV. There’s additional training for the on-site dealership people so that they can feature-benefit the ability to use this product with their RV the minute they make that buy decision. There’s been surveying going on the whole way, and what we’re finding out in the surveys is that they’re very excited about the program and that 90% of the customers would refer it to a friend. The average perceived value these customers are seeing (in the one-year membership) is $800, but some are seeing $2,000-plus of value when they’re buying this RV embedded with this ability to go camping immediately.
“We’ve seen that the customers who have bought this product have immediately made reservations,” he added. “We can see that they’re actually out there using the product, and we can verify the satisfaction that these customers are actually having when they’re out there at the properties.”
Approximately half of the RV sales at the eight participating stores are to first-time RV owners. “Part of our overall strategy was that we wanted a relationship with RV dealers who stay in contact with their customers, which will help them sell RVs over time as owners upgrade their RVs,” Heneghan said. “Everything we have done thus far has turned out extremely positive.”
ELS’s management, in the process, feels the RV industry in general may learn more about Equity LifeStyle Properties, a firm that could best be described as a quiet giant best known today for its 24,000-site Thousand Trails preserves, which currently offer both private membership and open-to-the-public components.
“We have more than 170 RV resorts (including Encore resorts) across the country, about 64,000 sites, and we like to say that ‘our customers stay with us a day, a week, a month, a season or a lifetime,’” says Nader. “So, we deal with any length of time. We operate properties all across the country from Bar Harbor, Maine, to the Florida Keys and over to the Rio Grande Valley, Arizona and then all up and down the western coast of the United States.”
Zone Park Pass
To stay in step with post-recessionary times and grow the 96,000-member network, Thousand Trails – a venerable name in the membership campground business which used to offer an array of contract terms up to lifetime status that often sold for as much as $5,000 – has reduced the terms of its most affordable ($499) membership recently to one year while retaining some more elaborate membership benefit offerings.
“Right now, we’re selling a one-year membership, our Zone Park Pass, which is what we’ve been working on with dealers,” adds Nader. “It’s a one-year-pass-access to those Thousand Trails properties. You can access them for 14 days at a time; then you have to be out of the system for seven days.”
This new approach has something to do with the economy, says Heneghan, but more to do with a broader effort to become more customer friendly and attractive to new RV buyers. “So, we’ve been trying to leverage that great lifestyle that you can have in our properties and figure out how we can open ourselves up to much more of the RV universe of potential customers,” he explained. “And one key facet of that was adjusting our products to being more responsive to a newcomer to the industry who wasn’t really ready, willing or able to pay a lot for an initial membership through Thousand Trails. So we’ve now lowered that cost, that initial barrier to entry.”
“We listened to our customers and potential customers,” adds McAdams. “They have told us they want to stay with us, they want to experience the freedom to visit multiple Thousand Trails locations and to use the wide array of amenities we offer. Many RVers and campers want the increased flexibility that comes with an annual pass type program.”
ELS, meanwhile, remains committed to the membership format at its preserves, mostly picturesque locations with spacious campsites and plenty of social activities from barbecues to ice cream socials and pancake breakfasts. Located in secure gated environments, preserve amenities typically include large swimming pools, spas, hiking trails, lodges, lakes, miniature golf, fishing and boating.
“Once you become a customer, the degree of satisfaction is very, very positive,” said Heneghan. “People love being part of the Thousand Trails properties and lifestyle.”