Profit Handbook

Programs Offer Options

There’s a quiet confidence about Dave Crawford. He can get animated, mind you, especially when it comes to discussing "the program."

When you ask him why a tire dealer wouldn’t want to join American Car Care Centers (ACCC), the group’s marketing director answers bluntly, "I don’t think they understand the program, and what it can do for them. It hasn’t been explained to them properly."

But when he gets a chance to explain "the program" to dealers – the real nuts-and-bolts, the benefits and the camaraderie – few walk away without joining what is the fastest growing marketing group in the tire industry.

And for smaller dealers looking for ways to increase profitability in passenger, light truck/SUV and performance tires, marketing groups like ACCC provide options.

ACCC is one part private brander, one part buying group, one part marketing group and one part supplier. It started in 1989 with the idea of helping smaller dealers be more competitive against mass merchants, discounters, tire company outlets, price clubs and mega-dealers – without losing control of their businesses or independence.

That first year, ACCC had just four distributor members – including heavyweights Merchants in Virginia and Strauss & Frank from Texas – and established its operating objectives, which have not changed to this day:

• Bring selected independent dealers together under a common identity and a common marketing concept
• Make independent dealer members more effective marketers so they can compete more profitably
• Provide them the sales and marketing support programs to improve overall operational effectiveness

Over 10 years later, four original member distributors and 75 charter dealer members still remain with ACCC, including the very first ACCC dealer – Grako’s American Car Care Center in Price, Utah, owned by Gary and Bobbie Grako.

Following those principles, ACCC has grown to 19 member distributors, and some 800 dealers who represent over 960 retail locations across the U.S. By ACCC’s estimates, those retail locations generated some $1 billion in total sales, representing about 12% of the replacement retail market. Crawford feels ACCC will reach 1,100 retail locations by the end of 2000.

Helps Sell Them Out the Door
"It’s harder for dealers today to stay up with SKU changes, vehicle technology changes, and other factors like the Internet," said Crawford. "It’s very hard for guys trying to do it all on their own anymore.

Crawford should know. His experiences working for Uniroyal, in sales positions with Merchants, and as owner of an auto service business give him some unique perspectives.

"Our philosophy is that if we can help you sell the tires through, we don’t have to jam them down your throat. Anybody can wholesale tires to a tire dealer. We give the dealers proven programs to help them sell the tires out the door. It’s a program for independent dealers by independent dealers," he said.

What kind of dealer makes the best two-way fit with ACCC? For the program to work best for the dealer and ACCC, the dealer must meet certain criteria. "Financial wherewithal and image in the community are important," said Crawford. "Size isn’t that important, because a small dealer who is really gung-ho for the program can actually be more effective than a big dealer who is rather casual about it.

"The guy you want to get is the ‘impressive’ dealer in town. They guy who does things well. He might be the hardest sell, but to me that’s the best dealer out there. He’s the guy who, when you do sell him, is going to embrace everything and he’s going to really run with it."

From Pillar to Post
ACCC’s entire program has been built on what it calls "the four pillars." "The four pillars have been with us since day one – tires, credit card, service and tire warranty," said Crawford. "And we’re adding two more pillars – our ad pack and a commercial credit card.

"We maintain that if you identify your building and embrace these four pillars into your business, you’ll be successful with the ACCC program. But it all starts with these pillars."

First, and foremost, are the tires. American Radials – ACCC’s private brand – are manufactured by Michelin North America, and have been since 1992. The brand provides good-better-best coverage of the all-season passenger, premium touring, S- through V-rated performance, and light truck/SUV segments. All ACCC dealers are required to stock and sell American Radial products.

Then there are Michelin, BFGoodrich and Uniroyal tires sourced for dealers by ACCC. "We’re a huge MAST (Michelin Americas Small Tire) customer," said Crawford. "In fact, we purchase a lot more flag brand product than private brand.

"MAST formed a strategic alliance with us, which is the only such alliance they have in the country with anybody," he said. "They agreed to work with us, and we signed a joint mission statement in October 1998 that states we will work together to develop ACCC into the strongest, most effective national tire marketing organization in the industry.

"Working with us was a huge step for MAST," Crawford said. "They’ve agreed this is where they want to be, and they’re putting weight behind us to make sure we are successful."

"The weight" Crawford described comes in the form of funds ACCC uses to develop and support the rest of its marketing programs, thereby significantly lowering the cost to members.

ACCC also has limited programs with Pirelli and Continental General for "some products," and has agreements with Everhard for wheelbarrow tires and Nankang for specialty tires. While ACCC doesn’t discourage its dealers from carrying other brands as they see fit, Crawford said dealers are "strongly encouraged" to be Michelin Alliance dealers." The biggest reason, Crawford said, is because ACCC’s national promotions are structured around MAST products.

Extending from the tire pillar are ancillary products, equipment and services. ACCC has preferred supplier agreements with dozens of other companies, covering the spectrum of credit cards, parts, tools, equipment, insurance and employee uniforms.

And ACCC plans to add an employee benefits package, which will give participating dealers a cost-effective way to add or extend the benefits they provide their employees through menu options for health, dental, eye, retirement, 401K, 125 plan, disability and life insurance

Keeping Future Customers
ACCC’s Preferred Customer Credit Card, through BankOne, is good at any ACCC dealer location for tires or service work, and provides instant credit to qualified applicants, with no annual fee and a low introductory interest rate. Besides an almost instant line of credit for potential customers, ACCC’s card program has a low discount rate of .75% (compared to major credit cards that charge twice that), and settlements are made to the dealer’s bank account within two days.

Plus, participating dealers have access to a direct mail database of all ACCC card holders, receive point-of-sale materials to promote the card, and get incentives for signing up new card holders.

And, in an interesting twist, dealers really don’t even need to reject a credit application. "All you need to do is get customer to fill out application for Preferred Customer Card," said Crawford. "If they get turned down for credit card, you can still give the customer a Preferred Customer Card good for 5% off future purchases. That way the dealer doesn’t have to embarrass the customer, and can still keep them as future customer."

Delivering Peace of Mind Vehicle service is an equally important pillar. "We ask that, at a minimum, dealers do alignments, steering and suspension and brakes," said Crawford. "Again, it’s not a mandate, but we encourage them because there’s an obvious opportunity once the wheels are off." It’s up to the dealer to provide the best in service work.

"The two things that best define us today is peace of mind protection and consumer trust. If you can build those two things in your business, customers will come back to you again and again."

Toward that end, ACCC provides dealers a nationwide auto service warranty they can offer their customers. "Every service is covered for 12 months or 12,000 miles, with some exceptions like alignment and balancing. And it’s great for the customer because it’s part of the Ameran Network, so if there isn’t an ACCC location nearby, he can go to any other service provider that’s part of that network," he said.

The ACCC service warranty envelope features a toll free emergency number and has a place for a dealer stamp. And it holds invoices and features coupons for additional future sales. "It’s not only a warranty piece, it’s a professional sales close," Crawford said.

Linking to the Customer
The fourth pillar – ACCC’s national tire warranty program – offers dealers additional income potential. "Our Freedom Plan tire warranty covers all brands ACCC dealers sell, whether they’re ACCC program products or not," said Crawford. "The best part is the dealer buys the warranty from Ameran for $3 a tire, and can sell it to the customer for $7 or $10 a tire. That’s money that falls right to a dealer’s bottom line because there are no costs attached to selling it.

"This is not just a road hazard warranty. It’s a complete tire protection plan," he said. "We include free roadside assistance. The tire is completely covered – treadwear and road hazard – for the first 12 months or 12,000 miles. If the guy has 28,000 miles and it’s the 11th month, he’s still going to get a new tire free. Doesn’t matter which it is, whatever works to the customers advantage. After 12 months or 12,000 miles it becomes a pro-rated warranty. Rotations are for free. Free flat repairs, free inspections. We’ve done research nationwide, and this is by far the best tire warranty there is."

The service and tire warranty programs serve another important function. "They’re a link back to the customer. You lock them back to you, instead of them going to the Ford dealer, instead of giving them the chance to go to NTB or a company-owned store. These programs make them your customer," he said.

New Ways to Compete
ACCC’s two new pillars continue the focus on helping dealer members in every way.

Co-developed by ACCC and its advertising agency, the Ad Pack has everything a dealer could want or need to create and execute a top shelf promotion effort – advertising slicks, logos, turn-key direct mailers, ACCC’s national promotion schedule, radio and TV ad scripts, and tips on buying media. In addition, the package provides complete instruction on each element, plus educational information on each marketing and advertising element so the dealer understands what it is, how it works, and what he can expect in return.

Separate from the Ad Pack, but equally important is ACCC store identification program. ACCC dealers are required to post at least a 2×6-foot ACCC sign, and are encouraged to do more as local zoning laws allow. ACCC also provides numerous store identification options, including window graphics, tire display modules, tire stands and centers, interior and exterior signage, banners, posters, and paint schemes.

Finally, the new ACCC commercial credit card, co-branded with Wright Express, is designed for fleets of all types and sizes – from a Class 8 trucking fleet through small, local operations – and can be used for tire, service and fuel purchases. "This card can make the customer a businessman, instead of just being a plumber or a florist," said Crawford. "And it gives the dealer another new tool to capture these kinds of customers.

"These programs are what today’s smaller dealer needs in order to compete with the national chains. This is what the national chains are doing," he said.

And the cost to the dealer? According to Crawford, the monthly ACCC membership cost ranges from $250 to $400, based on the dealer’s distribution area.

"You can’t get a fraction of what we offer on your own." Crawford said. "But that’s the outside part that everyone can see. The inside reason is the relationships the dealers build among themselves are very strong.

"They all want to be independent tire dealers, but they don’t want to feel alone."