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Getting it Right: TCI’s Careful Selection of Dealers and Program Offerings is Paying Off

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David Snyder, vice president of small tire marketing and sales, has been with Tire Centers LLC (TCI) since the company was formed in January 1986. Back then, TCI was focused on the commercial side of the industry – garnering less than 10% of its overall business from the retail side.

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All of that changed, however, in 1999, when the then-independent TCI was sold by owner James Berlin to Michelin North America. Realizing a need to mix retail and commercial sales, TCI launched its T3 branded marketing program for its retail associate dealers. At the time, TCI said that the creation of T3 would allow the company to concentrate more on its commercial tire and retreading business and its wholesale distribution of car and light truck tires.

T3 Certified Tire Centers encompasses a branded passenger and light truck/SUV tire lines – Michelin, BFGoodrich, Uniroyal, Continental, General and private brand Trivant – a common market identity package and a portfolio of advertising, training and business services.

To avoid direct competition with its associate dealers, TCI sold its handful of stand-alone retail locations, and played-down its direct passenger and light truck tire retailing activities in markets where an independent T3 location exists.

Since its inception in 2000, T3 has experienced growth every year., and it has fallen to Snyder to make sure T3 continues its upward progress.

Q: Will there be any enhancements to the T3 program for this year?

A: We have a number of program enhancements we’ll offer our dealers in 2003. We’re changing our credit card provider to GE Capital Services to upgrade the efficiency of the T3 credit card. There will be a bulk oil program with attractive buying prices that will be introduced in the second quarter of 2003. Also being introduced will be a new point-of-service computer system during the third quarter, which will be more cost effective and efficient because it connects to the Tire Centers system.

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Q: How many dealers do you have?

A: Let’s look at a little T3 history first. T3, incidentally, is an acronym. The ‘T’ stands for TCI and the ‘3’ represents the attributes of selection, value and service. At the end of 2001, we had 216 T3 dealers. We signed 139 new dealers in 2002, giving us 355 by the end of the year. In the first two months of 2003, we signed 32 new T3 dealers, so now we have 387.

Q: How many new T3 dealers do you plan to add in 2003?

A: Our goal this year is to add 75 dealers. That would give us 430 dealers at the end of 2003.

Q: In our story on marketing groups and affinity programs in July 2002, you said customer reaction to the T3 concept was favorable. Can you elaborate on this?

A: Customer reaction has been favorable for a variety of reasons. We focus our direction on promotion and marketing activities that are designed to get visibility for our dealers in their specific market places by using the dealers’ names as the brand.

Q: You just alluded to the fact you want the dealer to be the brand, not T3. What do you do to help the dealer maintain, or even grow, his brand equity?

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A: First, we very carefully accept dealers into the program so that they don’t overlap in a given market. Advertising and marketing activities are devoted to a specific dealer’s market segment. We don’t try to combine groups of dealers under the T3 banner because each dealer’s name is the brand equity in a given geographical area.

We don’t accept a dealer into the program if he competes with an existing T3 dealer. We don’t use combined mass marketing promotion and advertising. We do use a lot of direct mail and advertising in local newspapers that is specifically targeted to the dealer’s customers and prospects. These programs help to grow and maintain the dealer’s brand equity in that dealer’s trade area.

Q: Describe for us the ideal tire dealer for the T3 program.

A: The ideal T3 dealer is a small, independent dealer who is competing with larger dealers and chains. The T3 program gives them the tools and expertise they need to compete. Our program goes far beyond merely supplying tires at good prices to smaller dealers. T3 is a complete marketing program for dealers that makes support resources affordable.

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Q: TCI opened three warehouses last year and now has 29 distribution centers around the country. How many more warehouses does TCI plan to open?

A: We actually have 30 distribution points. We will soon open a distribution center in Tampa, Fla., and possibly an additional one during 2003.

Q: TCI formed the T3 Dealer Advisory Council (DAC) to help identify areas of the program that need improvement. What kind of impact has the DAC had? What kind of recommendations did it make?

A: The first meeting of the DAC was in April 2002. The Council evaluated all elements of the T3 program during its first session and determined that tire dealers don’t have the time to personally assure themselves that they’re getting all of the benefits of the program. They recommended that TCI advise T3 dealers about how they can best utilize the elements of the program.

This led directly to the creation of the Dealer Development Manager position in the field to advise and counsel the dealers in their area. The DAC also made recommendations to improve the T3 credit card program, to offer more assistance on promotional planning activities, and to help dealers take better advantage of the new training offered to their employees.

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The second DAC meeting was held in February 2003 and was run entirely by the council. We presented the DAC with our recommendations to improve a variety of programs, partially based on what we had learned at the 2002 meeting.

These recommendations included the credit card upgrade program, new promotional planning activities, the new POS computer system, the bulk oil program and additions to the showrooms. The DAC is a great sounding board for us and it helps us make the right judgments for our customers. Most importantly, the council made us realize that our programs must be easy to use and straightforward.

Q: With all the various programs and groups in the market, what should a dealer interested in joining one of these groups look for?

A: When investigating programs or groups for possible affiliation, a dealer should look for the added value that a program offers. The dealer should look at each of the elements of a program to see how they fit with their particular business or specific needs. And the dealer needs to decide if joining such a program or group will truly help them reach their business goals, or if they are considering such a program for all the wrong reasons.

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T3 offers a nationwide system that furnishes many proven ways to increase tire sales, boost profits and build a secure future for its members, with everything from quality-driven tire brands and an exclusive consumer credit card program, to a complete showroom design and signage program, national warranty programs, and employee benefit and payroll programs.

Q: Conversely, how does T3 get its message heard above all the group and program competition?

A: We advertise in industry trade publications, utilize the T3 Web site, conduct direct mail programs, participate in trade shows such as ITE/SEMA, and make extensive personal contacts with T3 candidates.

Q: The growth of tire company affinity programs and independent marketing groups appears to have slowed. Have these programs and groups reached all their potential converts? What do you feel is the total saturation point?

A: Overall, the tire company affinity groups have slowed. T3, however, continues to move forward because we’re offering dealers unique programs that assist them in selling more tires in their markets. We offer programs that others don’t and we support those programs through involvement of our Dealer Development Managers.

Our growth is coming, mainly, through dealers who have had a chance to look at other programs.

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