On Sept. 20, more than 100 Michelin independent dealers attended the first of 41 meetings to be held throughout the continental United States to learn more about a number of upgrades to the Michelin Alliance Associate Dealer (AAD) 2011 program. This first meeting in the series was held in Michelin’s headquarters city, Greenville, S.C.
Michelin Americas Small Tires (MAST) COO Scott Clark kicked off the meeting by saying, “This program is critically important to us since we don’t operate our own retail operations. Your growth has outperformed the market during the past year and this has helped us manage through a difficult environment. The market is up about 4%. We are up on the replacement side and even more on the OE side.”
Clark said Michelin is on a 24 hours a day, 7 days a week manufacturing schedule to satisfy demands, as well as using international imports. He also noted that more Michelin tires are being sold than ever before.
Bruce Brackett, MAST vice president of sales, told Tire Review that approximately 3,800 dealers are part of the AAD program, with 4,500 points of sale. He said that the overall market grew on the average less than 2% this year but Michelin grew more than the market.
When asked what the three most important parts of the program are, Bracket said, “The AAD program is profitable, simple to operate and is supportive of our dealers’ businesses.” He said that this is the fourth year of the program and it has grown each year.
Independent dealers sell 53% of replacement tires in the U.S., according to Bob Schaffner, manager, distribution development-wholesale. “These dealers are a vital component of Michelin’s business and we will not grow if they don’t succeed,” he said. “Feedback from Alliance Dealers is overwhelmingly positive with 90% of AADs who responded to a recent survey indicating that the program has helped them sustain or grow their business.” Schaffner said that it is Michelin’s job to pay dealers for every tire they buy.
The 2011 Michelin Alliance program, which covers the Michelin, BFGoodrich, Uniroyal and Associate brands, includes its own “Top 10” hierarchy of advantages for dealer members:
• Leading brands and distribution
• People who care
• Ability to select the Bib level that meets their needs
• An online e-statement showing purchases and earnings, updated daily
• Tires from multiple distributors that count toward goals
• Capacity to make own decisions and control resources
• Co-op and marketing funds that help drive sales
• Campaigns and promotions that help hit goals
• Online tools that help create and track advertising
• Cash, paid monthly, to a dealer’s bank account
The program is executed entirely online with an electronic statement that allows dealers continuous visibility of purchases, goals and program earnings. Dealers receive regular electronic deposits as rewards for their attainment of program goals and Michelin has steadily increased payouts to dealers over previous years. This faster, more streamlined payment process frees up dealer cash flow and, as a result, Michelin has seen a remarkable growth in the number of dealers participating in the program since its inception four years ago.
The program is based on four levels of tire purchases by dealers: Bib 1, Bib 2, Bib 3 and Bib 4. Dealers who are currently at the Bib 1 level are being encouraged to “Bib up” to Bib 2, Bib 2 to Bib 3 and Bib 3 to Bib 4. Schaffner said, “We’re confident that 2011 will be a growth year and we’ll offer financial incentives to AADs who increase their program level so they can earn even more in 2011.”
The program’s service loyalty requirement, which was reduced from 85% to 75% for the 2010 program, remains at 75% for 2011. This requires independent Michelin dealers to purchase 75% of their MAST products through their primary servicing distributor.
Michelin also has upgraded its training with new courses in 11 areas – everything from Tire Essentials, to Retail Selling, to Consumer Basics. The new training program offers incentives through drawings for $100 Best Buy gift cards, crew trips to Road Atlanta for ALMS series racing and to the Baja 1000 in Baja, Mexico. Certificates are also given to those who complete the courses.
