Point S USA hosted its 2020 Dealer Conference in San Diego last week with record attendance, riding high on a 10% sales increase in 2019—the third year in a row the co-op has met that goal.
Coupled with adding 19 locations and four additional states last year, Point S welcomed its new members, as well as current members, partners and staff, to the Paradise Point Resort for a weekend of educational opportunities, the debut of new technology, networking and more.
“We’re a member-owned cooperative,” said Walter Lybeck, Point S USA CEO. “That means when we have such a profitable year, our members share in the success. In fact, we paid back over $5.5 million to our members in 2019.”
Lybeck pointed to the co-op’s promotional schedule with its preferred partners as a key to its success, including the addition of Toyo Tires in 2019.
With much to celebrate, Walter Lybeck, Point S CEO, and Clint Young, COO, sat down with Tire Review to discuss what’s on the horizon for the co-op in the years ahead and new technologies that it believes will enhance the customer experience.
Tire Review: You all have had a record year. Congrats! Looking beyond 2020, what are your big goals in two to five years? Or even 10 to 20?
Young: One of them is retention of our dealers to make sure that we continue to give them the kind of support they need that makes it easy for them to focus on their customers. They still have to focus on their business, but if we can help take some of that pressure off and give them resources so they truly can focus on their customers, it makes it easy to pass the business on and put it up for sale, as Richard J. Bryan (executive and succession planning coach who spoke at the conference) was saying. And it might even intrigue other Point S dealers to acquire stores and move on to that next stage of their life. That’s one prong.
The other prong is technology. We’ve realized that tire and auto service is a part of what we do. But technology is really the connection to make sure our customers know who we are and what we can provide them. If we’re making it easier [to create a better customer experience] than our competition and have competitive pricing, then we’re going to retain and grow our customer base, too.
TR: Does that include a certain number of stores by a certain year? Or expanding the Point S footprint to new states?
Young: While recruiting top dealers is an absolute priority for us, not every tire store is a great fit for us. We realize that, and we have competitors that are trying to improve their stores and recruiting also. How they brand a store and interface with that store is very different than what we do. When someone comes on board with us, they are really making a choice to be part of ownership and that includes rebranding and all the support tools that we give. Their purchases are actually going toward the profitability of the group, which they then get paid a percentage on. So, it’s so much different than a franchise.
A medium-term goal is to really support the new warehouse that we put in Memphis and really build out that market. From that location, we can touch five or six different states that surround Tennessee, and that’s what we’re really focused on growing now—the Mid-South region.
TR: Your dealers seemed to have profited from the addition of Toyo Tires as a Point S Preferred Partner. Can you share how that has gone this year?
Lybeck: Sure. We have four Preferred Partners [Nokian Tyres, Goodyear, Hankook and Toyo] for PLT tires. We love all the Preferred Partners. We added Toyo this year. We removed Cooper last year, and the most important part for me is that we were able to put Toyo into a significant position in our lineup in the very first year, and it was adopted broadly from our membership. Overall, it has been a great relationship for us. I wish Cooper the best and maybe we’ll have business with them again, but we were able to transition that, and that’s my goal as a leader of this independent group—not to transition vendors—but to ensure that independents can be incentivized with thoughtful design of programs and partnerships that we can work with so that members will work together. We won’t force members to do anything… Our dealers do the right thing because they know they’re supporting the organization. So, it [Toyo] was a great add for all of our members. Our other existing Preferred Partners have been fantastic as well and great supporters. The beauty is, we did not lose market share in any of our Preferred Partners by moving to a new vendor. We gained market share, actually. We did it by gaining new customers and gaining share in some segments that we weren’t supporting well enough.
TR: At this year’s conference, your team released the All-Trac Platform, a proprietary shop management tool that monitors customers through their purchasing cycle by giving dealers online appointment scheduling, bay management software, communication resources and a soon-to-come rewards program. How will this be advantageous for dealers?
Lybeck: The system will give customers a new way to communicate with our members and give them a cleaner, fully-integrated tool to manage customers, services, inspections, follow-up and reviews. It also adds the ability for the members to manage their staff and efficiencies of their stores. As you mention, we will soon be adding a rewards component. By integrating our rewards program, all of our independent stores actually work together. By being aligned, and from a customer perspective with the rewards program, it allows us to play together and really enhance the warranty map that we share with all of our members.
TR: How will dealers transition to this platform?
Lybeck: About two-thirds of our Point S dealers are on Traction (the Point S POS system), and so we really focused on a full integration so that we could vet the details with Traction in particular. As far as other software, our ultimate goal is that all the stores will be on the same exact platform. There are large components like the scheduling and the bay monitoring that will work with other systems, but it will require double entry for a period of time.
TR: You also presented new digital merchandising for Point S stores. That includes two 43-in. vertical flat-screen digital displays controlled by a made-in-house connect unit that will update both the displays and Point S TV, as part of your Point S Connect strategy. How will that affect the organization and its dealers?
Young: The connect unit allows us to push all the content to the stores at the same time. So, if we had a promotion that started Jan. 1, we’d have to mail out all the posters well in advance, and it’s a struggle to make sure they get up. Our owners run a tire shop, they shouldn’t have to focus on getting posters up. It’s hard to get that done. With this, they don’t have to worry about it. We push it [the content] out at midnight and every store has a similar experience for the customer. It’s all web-based and cloud-based.
TR: Last year, Point S International entered into a joint venture with Chinese tire and auto care network, Suremoov, to create Point S China. The partnership added Suremoov’s 950 franchised outlets to the International Point S network, which consists of 4,350 outlets in 37 countries under one banner. How does this move affect the organization as a whole and Point S USA?
Young: Big picture-wise, with the way that our organization globally communicates success, any press like that is good for us, and for prospects that are interested in joining our group, they see the power of those moves, not only the global footprint but the power that it brings to the negotiating table. So, in that way, it affects us in a very positive way.
Lybeck: With a 1,000-store group like that, there’s going to be significant efficiencies that they’ve got in their operations already. Several times a year, we meet as a group with the various heads of all countries, and we’re able to connect with these folks and get ideas and share how we go to market with things. Having somebody with 1,000 stores in China gives us a great insight into how the Chinese market is going.
For example, Europe’s having a pretty bad year from a PLT perspective. What does that mean? Why would that affect us? Well, guess what? Our suppliers are having issues over there, so they’ve got extra demands for us here in the United States to take up volume, so they’re extra hungry. By having that global perspective, it allows us to take opportunities that you wouldn’t otherwise see, and more importantly, look for risks of potential supply. So, having this group probably won’t have a direct correlation other than idea sharing, but overall, the commitment of the group to growth and the consistent execution of our vision and applying it worldwide, it’s just further ratification that the vision works.
