ACCC’s Largest-Ever Dealer Event Looks at Past, Future Success
In a century-old industry, 15 years doesn’t seem like much. But to an entrepreneurial business ®“ whether a single retail store or alliance of successful dealers ®“ 15 years is a long time.
It was that combination of longevity and success that American Car Care Centers (ACCC) dealers celebrated in early February at the marketing group’s "Xcitement in Xcaret" national dealer meeting at Xcaret resort in Cancun, Mexico. With some 900 attendees, it was ACCC’s largest-ever event. ACCC President and COO Len Lewin and marketing director Dave Crawford used the opportunity to reflect on 15 years of growth and look to the future.
ACCC got its start in 1989, Crawford recounted, with a total of 74 dealers. By the close of 1992, it had grown to 569 dealer locations and 14 member distributors.
In 1993, ACCC signed its first supply agreement with Michelin North America (ACCC re-upped for three years with Michelin earlier this year, and added Continental and General tires in the 1990s.) and held its first national promotion three years later. Today, ACCC has 1,102 dealer locations and 19 member distributors, said Crawford.
Larry Nicholls of Wholesale Tire Distributors in Logan, Utah, one of ACCC’s founding fathers, said the marketing group has always been about the dealers. "The main thing has been to maintain the independence of the dealers," he said. Looking forward, Nicholls said, dealers can maintain that independence by being committed and involved in ACCC, its identity and its brands.
ACCC’s first dealer, Gary Grako of Gary Grako’s Tire in Price, Utah, spoke to the group about what ACCC has meant to him and his business, recounting how he once struggled but now enjoys solid success.
In an interview during the event, Lewin and Crawford said ACCC’s growth has had advantages and disadvantages. "We can go after larger dealers now," Lewin said. "We now have great credibility, and have the program elements that can help larger dealers."
"The reality, though, is that, after securing 1,100 dealer locations, the number of available quality dealers is shrinking," said Crawford. "Compared to our early years, it’s easier to keep a dealer on board, but it’s a lot harder now to sign them on."
Even with the comprehensive program ACCC offers, not every dealer takes advantage of the full program, something Lewin and Crawford are working on. "Dealer participation in all aspects of the program varies from dealer to dealer, market to market. Some guys use the whole program, while others use only a portion," Lewin said.
One main hurdle the group faces in getting dealers to use the full program offerings, said Crawford, is the fact that dealers are so independent. "It’s a blessing and a curse. Most of our dealers have already been successful. They are doing things that work for them. And they’re busy; it may take months for them even to consider adding a new aspect of the program."
In terms of new program offerings, ACCC is considering a health insurance program for its dealers. "We’ve been looking at the situation for the last five years, and we are trying to find something," said Crawford. "But it is a very complex issue. With all the federal and state regulations to consider, one size does not fit all. And that makes it hard to come up with a workable program."
ACCC honored dozens of its dealers with 10- and 15-year service awards and held drawings for special prizes.
The top prizes, awarded on the final day of the event, included a 42-inch plasma TV donated by Continental Tire North America, won by Robert King of King Super Tire in Mt. Pleasant, Pa. Michelin donated two all-expense-paid trips to the upcoming German Grand Prix at Hockenheim, won by Nikolaus Bastakes of All Weather Tires, Huntington Station, N.Y., and Michael Keroack of Liberty Tire, Airway Heights, Wash. The grand prizes, a pair of Chrysler PT Cruisers, donated by Continental, were won by David Glovak of Tire Barn in Indianapolis, Ind., and Jim Anderson of Seiler Tire in Algoma, Wis. TR
Brave ‘New’ Start
Renewed, MAST Alliance Program Looks to Positive Changes
By Mary Aichlmayr, Managing Editor
"I see the Alliance program as having a good start and bright future." Those words, spoken by Wendel Burt, co-owner of Burt Brothers Tires in Bountiful, Utah, were echoed by many dealers in attendance at the Michelin Americas Small Tires (MAST) Alliance Dealer Meeting, Feb. 18-20 in Naples, Fla.
Michelin’s Alliance program was originally launched in 1995, but it wasn’t until last year that it hosted a dealer meeting. This year’s meeting was the program’s first incentive trip, earned by more than 150 MAST dealers.
Part of the revitalization of the Alliance program was the appointment of new leadership for Michelin Alliance Dealer Programs:
Herb Johnson was named general business director, and Louise Jasmin was appointed sales and merchandising manager.
Also presenting at the recent meeting were Michelin North America (MNA) executives Jean-Michel Guillon, MAST executive vice president and COO of MNA; Roger Ferguson, MNA vice president of sales, merchandising and strategic planning; Erik Olsen, MNA vice president of sales; and Pascal Couasnon, MNA vice president of maketing.
The Game Plan
In ESPN Sportscenter format, Michelin shared its game plan for 2004. Key initiatives, according to Guillon, include strengthening product and brand leadership; strengthening distribution; improving the competitiveness of the company’s industrial base; and striving for operational excellence. Guillon also noted that a major goal for Michelin would be to improve fill rates beyond 90% in the near term.
But the most striking change for 2004 will be the complete consolidation of Alliance programs in the U.S., Canada and Mexico. In the U.S., the Alliance program has 208 participating dealers representing 1,100 locations; in Canada there are 168 dealers with 200 locations; and in Mexico there are 180 dealer principles representing 250 locations. Overall, Alliance program members maintain nearly 2,000 locations.
The purpose of the consolidation is to create a "truly North American affinity program," according to Johnson. "In 2005, our Alliance meeting will be truly a North American meeting, with all of our dealers from all three countries in one location." He added that the new, larger Alliance would give dealers more access to better pricing from suppliers.
To further increase volumes, MAST wants to add dealers to the Alliance mix but is more interested in "quality points of retail" than sheer share numbers, said Johnson. Starting last year, retailers were required to sign a three-year agreement with MAST Alliance.
Michelin executives also introduced the North American Alliance Certification Program, a training program originally piloted by the Canadian Alliance program. Dealers’ physical locations would need to meet certain certification requirements, MNA said. The program will start in 2004 with six cities and include dealer education and best practices training.
Also new this year is the MAST Customer Council, consisting of nine dealers, each serving a three-year term.
Council members include: Bob Beasley of Beasley Tire Service, Houston; Paul Bernstein of Delta World Tire Co., New Orleans; Jeff Buettner of Tire Distributors Inc., Winchester, Va.; Ron Burt of Burt Brothers Tire, Bountiful, Utah; Janine Calabro of Calabro Tire & Service, Pittsburgh; Ed Hogan of Hogan Tire Co., Woburn, Mass.; Jerry Nerheim of Waukegan Tire & Supply, Waukegan, Ill.; Ara Tchaghlassian of ATV Inc., Irwindale, Calif.; and Jim Whaley of Jim Whaley’s Tires, Dothan, Ala.
Rich Daugherty of Alban Tire in Springfield, Va., said he was pleased with the Alliance program so far. "I’ve used several of their added-value service programs last year and will use more this year," he said. TR
An OTR Upturn
TIA’s OTR Conference Reveals Trends, Opportunities in a Growing Market
By Mary Aichlmayr, Managing Editor
The 49th annual OTR Conference, Feb. 26-28 in Orlando, Fla., gave attendees a hard look at where the off-the-road tire market has been in recent years and where it’s headed.
Larry Morgan, TIA president, Roy Littlefield, TIA’s executive vice president, and Larry Noah, this year’s OTR group chairman from Raben Tire, welcomed attendees.
One of the highlights of the three-day conference was a presentation by Jack Fenner, Continental Tire’s North America’s director of dealer sales. Fenner presented a five-year history of civilian OTR replacement tires. "Since 1999, the industry has seen a downward slide ®“ from 149,513 to 124,778 units," he reported.
Last year, for the first time in five years, the OTR market saw a turnaround in total sales for civilian unit replacements ®“ about 130,430 units.
Fenner also pointed out that the trend toward radialization continues to grow within the OTR business. "Of the total number of civilian units sold in 2003, 70,863 were radials and 59,567 were bias ply," he said. "In 1999, bias ply owned 58% of the civilian replacement market, but today, the tables have turned ®“ in favor of radials," he added.
Gary Nash, director of OTR sales at Yokohama Tire Corp., presented macro-level trends ®“ such as rising housing starts and low interest rates ®“ affecting the OTR market. Then, he explained to attendees how these macro trends impact micro trends ®“ prices of precious metals, iron ore, steel, coal, etc.
By highlighting both macro and micro trends, Nash illustrated how outside forces shape business for end-suers, tire dealers and tiremakers. He also pointed out specific actions U.S. dealers need to take to stay competitive, suggesting dealers monitor market conditions, advise their customers and study "niche" markets.
The OTR Conference also featured a panel discussion on tire monitoring technology moderated by Tire Review. Panel members included Paul Comfort of Fuller Brothers, Derek Weston of Rimex Supply, Victor Radcliff of Bridgestone/Firestone North American Tire, David Wright of Goodyear Tire & Rubbe and John Funke of Michelin North America.
Panelists gave updates on the current status of their companies’ intelligent tire systems. They also suggested ways for dealers to educate users about the benefits of intelligent tire monitoring.
During a Q&A session, dealer questions focused on when tire manufacturers would make their systems commercially available.
Apart from technology updates, the conference also addressed "softer" issues. Kevin Rohlwing, TIA’s senior vice president of education and technical services, told dealers that employee training "provides you with good liability protection. Often, it’s the last line of defense."
Nevertheless, he cautioned attendees not to think about training as "a bullet-proof vest from a lawsuit." Rather, training should be based on real-world experiences and expectations.
For his part, Mark Whaley, vice president of sales and marketing for Iowa Mold Tooling, said that tire dealers could be leaving money on the table regarding what they charge for tire service. He noted that average charges for mechanical service calls are 30% higher than those for tire service charges, even though labor and equipment costs are about equal. Whaley also stressed that mine superintendents don’t distinguish between tire service and mechanical calls.
U.K.-based dealer and OTR Conference attendee Chris Skelton, managing director for OTR Tyres, remarked that TIA’s conference was "truly an international event for dealers who want to stay competitive."
Skelton also said he wasn’t concerned about regional dealers competing on price alone. "I need to be concerned about total tire management on a global basis," he said. Skelton added that he travels to the TIA OTR Conference each year to benchmark himself against some of the best dealers.
Next year’s meeting, scheduled for Feb. 24-26 in Tucson, Ariz., will mark the 50th anniversary of TIA’s OTR Conference. TR
Not Playing Around
TCI Dealers Travel to Sunny Maui for an Update on the T3 Program
By Mary Aichlmayr, Managing Editor
Nearly 150 dealer couples gathered in Maui Feb. 9-13 for the seventh Great Escape incentive trip, hosted by the small tire division of Tire Centers Inc. (TCI).
During a brief respite from the fun-filled itinerary ®“ which included yacht sailing, golf, horseback riding, helicopter tours, snorkel sailing, whale watching and sun bathing ®“ Dave Snyder, vice president of small tire marketing and sales for TCI, updated dealers about the company’s progress in 2003 and gave an outlook for 2004.
Since last year’s dealer trip in Cabo San Lucas, Mexico, TCI has opened new small tire distribution centers in Philadelphia, Tampa, Fla. and Sacramento, Calif., said Snyder to dealer attendees.
"By the end of this year, TCI small tire distribution plans to have a national coverage of about 75% of the U.S. market," Snyder said, adding that TCI would be servicing T3 dealer customers from 37 distribution centers by the end of the year.
Overall, "our responsibility at TCI is to provide (independent tire dealers) with the resources they need to compete successfully against any and all competition in the retail tire market," said Snyder.
TCI’s T3 Program is what makes that happen. The affinity program provides dealers with a high-tech, uniform "showroom look, regularly planned advertising and promotional support, employee training and other elements they need to create that good tire buying experience for the consumer," Snyder said.
The T3 Program was introduced in the fall of 2000 as a business partner program for small retail tire dealers. "Originally, we put together a team of five people at TCI with retail tire advertising backgrounds," Snyder told Tire Review during an exclusive interview. The group concluded that, to compete successfully in today’s tire business, selling tires isn’t enough. "We focus our efforts on the idea that, by helping dealers be successful, we’ll be successful," he said.
He also added that today’s T3 Program has a "direct focus on customer service. And it all comes back to trust.
"With the best dealers, you’ll see a customer come in and put the car keys down and tell the dealer to do whatever it takes. If that happens, you know that dealer has spent years building that relationship," he said.
There are no quick fixes. Building trust is a long-term but effective strategy, he said, to building long-term success in a competitive arena.
"It’s difficult for the mass merchandisers to do this," said Snyder. "Tire dealers have very low turnover compared to the mass merchants. Every time you go into one of those stores, you are dealing with someone else. You can’t build a relationship that way. That’s where an independent dealer has a major advantage," he concluded.
T3 negotiates supply contracts with national vendors, such as uniform supplier Cintas, to provide advantageous pricing to T3 dealers.
In addition, T3 dealers can offer their customers national service warranties and roadside assistance programs that help differentiate them from their competitors.
T3 Marketing Director Steve Steffens explained that T3’s dealer development managers (DDMs) are integral to helping independent tire dealers take full advantage of the T3 Program.
Snyder told Tire Review that there are two separate parts of the TCI business ®“ sales/service and marketing. Sales and service encompass just that. "That’s where our field regional directors and distribution center managers help dealers sell tires," he said.
"But our focus on the marketing side is not just to sell tires. Our T3 marketing group helps the dealer be successful in the marketplace."
"Long term, we help our customers be successful rather than just sell tires," added Steffens.