An interview with the cofounders and co-owners of NeXus RV.
By Bob Zagami
July 2015
During a recent visit to Elkhart, Indiana, writer Bob Zagami sat down with the owners of NeXus RV and The RV Factory — Claude Donati, Dave Middleton, and Brian Shea — to discuss their factory-direct sales model, which is gaining momentum as the RV industry rebounds from the recession.
Q: What is the primary reason you chose the factory-direct model when you launched NeXus RV in 2010?
Claude Donati: We were all experienced industry executives and understood the challenges of the industry’s three-tier sales model [producer, distributor, consumer] that we were part of for many years. People said we were crazy to start a new company during the recession, and even crazier to try and do it without dealers. We wanted to control our own destiny after so many manufacturers and dealers went out of business.
Dave Middleton: Very few dealers have long-term brand loyalty in this business. Every time they go to the Elkhart Dealer Open House Week or [the National RV Trade Show, in Louisville, Kentucky], they are looking for the “next great thing,” or the best deal they can get at that time. This causes confusion for their customers and puts pressure on the sales and service departments to stay current with all the product lines they sell. And sometimes the unit they sell is . . . not necessarily the best one for the customer.
Q: What advantages do you see in this sales model?
Donati: The most obvious is the elimination of the middleman, the dealer. We have great respect for dealers, especially those we have worked with through the years. However, we felt the time was right for us to start building motorhomes and selling them directly to the consumers. Our success has validated our intentions, and we are way ahead of our conservative projections when we opened the doors at the factory.
Brian Shea: Another success factor is we build to order, not for stock that is being built on chassis that have sat in the yard for a long time or product that has been sitting on a dealer’s lot because they guessed wrong on a floor plan, color, or engine selection. The three-tier model presents significant challenges for dealers, but that’s the way the industry has evolved over the past fifty-plus years. We build “fresh” product, and the customer works closely with our management and design teams to get exactly the coach they want. We can make modifications that a major manufacturer simply cannot accommodate due to production requirements.
Middleton: There are two areas that allow us to be very successful with this sales model. First, the customer deals directly with us, the owners. There is no middleman. Second, if they have an issue, they are probably going to be speaking with the manager of the department in question, or it could even be the person on the production line that worked on their unit. There is a growing interest for consumers to have a closer relationship with companies they do business with, and that can be a challenge in the RV industry, the way it is structured. How many owners can speak directly with the owner of the company, whether it is a dealer or the manufacturer?
Donati: We talk a lot about our product being “fresh.” Chassis can be old before anything is built on them, and product can sit for a year or two on the lot, so a finished product could be three years old before it sees its first owner. This is dictated by the system. Our product goes from the factory to the customer’s driveway.
Q: You have one factory here in Elkhart and sales showrooms here and in California, Florida, and Texas. How do you provide service once the customer takes delivery, without coming back to the factory?
Donati: When we launched the company, we thought that would be the one area of our business that other dealers and manufacturers would point to if they were competing against us for a prospect’s business. Our service and support are what customers appreciate most. Dave mentioned support when customers call the factory. When we set up our company, we knew the best dealers and technicians in the country and set many of them up as authorized service centers for NeXus RV. We authorize repairs immediately, and I think we pay warranty claims faster than anybody in the industry.
Shea: We have over 250 authorized service centers today, and it grows every month. We will even set up a new service center close to the customer’s home by finding a dealer or mobile service center that can pass our requirements for authorization.
Middleton: Our point of vulnerability, as perceived by our competitors, has become one of our strongest selling points. Our buyers tend to be experienced RVers, not first-timers. If they have owned an RV, they know the issues that can come with dealers not wanting to service something they didn’t sell, or waiting for parts from a large manufacturer who changes vendors frequently, or the dealers are so busy they can’t provide prompt and efficient service to their customers.
Donati: There are many excellent mobile RV service technicians out there, many of whom were laid off during the recession, and they had no place to go, so they started their own companies. Most of them have done quite well with very little advertising. Many of them are authorized NeXus RV service centers. When they have a question, they are also talking to the owners of the company — and so are we!
Q: What’s next?
Shea: We’ve quietly launched a second factory-direct company, The RV Factory. We acquired two very familiar RV nameplates and have started building toy haulers under the Weekend Warrior brand and Class B motorhomes under the Avion brand. We feel experienced RV buyers will recognize the names and the role they played in building this industry and will want to see what we are bringing to the market.
Donati: We really want to change the way customers buy RVs. We will be expanding our sales showrooms in other areas of the country so that prospects can see the quality of our products without coming to Elkhart. We use the latest technology for security and access to our showrooms, and interested buyers can spend as much time as they like without the pressure of a salesperson standing in their way.
Middleton: The Internet has changed the way people buy an RV. . . . Today, a prospect will do 60 to 70 percent of their research before they ever talk to a salesperson. They have more information available online, and they have access to forums that [express] displeasure with certain aspects of our industry. The playing field has been leveled between the current three-tier system and those of us who sell factory-direct. Customers want a relationship, they want to be part of the process, and they want input into their major purchases in life. We feel that our system is attractive to a percentage of the RV market that wants to try something different and have more control over the purchase of their next RV. We have been very well received by experienced RV owners, and the testimonials on our website validate everything we have done so far.