SCARBOROUGH, Maine-When he meets people, Paul Pappas often tells them he's in the ``CD'' business. You have to wonder, has he somehow blended music with selling tires? Formerly in automotive marketing management for DuPont, the 44-year-old Mr. Pappas used to travel 250,000 air miles a year on business. He gave all that up-to become a tire dealer.
What the president of New England Wholesale Tires Inc. really means is he's in a ``Customer-Driven'' business: Do whatever it takes to bring customers in and keep them coming back.
In a market where discounters and ``price'' clubs have provided stiff competition, Mr. Pappas wields some clout with quite a club of his own.
It's called the ``Smart Driver's Club'' and, judging from the results, it has been a smart move.
The Scarborough dealership, doing business as n.e.w. tires, markets itself as ``Maine's premier tire store'' and ``Greater Portland's tire service experts.''
In August 1991, with an initial commitment of $12,000 and a flurry of newspaper ads, the company launched its Smart Driver's Club, coincidentally about the time a Sam's Club opened virtually across the parking lot from n.e.w. tires, which also happens to be across the street from a Wal-Mart.
``We'd done a great deal of research and knew what an impact they were going to have on our market,'' Mr. Pappas said. ``We developed our club to differentiate ourselves'' from competition including Sears, Roebuck and Co., Kmart Corp., BJ's Wholesale Club, Goodyear-owned outlets and other independent tire dealers.
``The essential difference is we give better service than other tire dealers-so we had to come up with a way to merchandise that,'' he continued. ``We gave the `Smart Driver's Club' name to that package of services.''
N.e.w. tires spent $25,000 on the program in its maiden year.
The dealership retroactively enrolled anyone who had ever purchased tires from the store. Now, each new-tire buyer receives a free club membership along with a plastic card outlining these free benefits:
Valve stems, balancing and disposal of old tires;
Tire rotation and rebalancing every 5,000 miles-with each wheel hand-torqued to factory specifications;
Alignment checks on a drive-across alignment tester; and
Safety checks any time.
The club idea was the brainchild of n.e.w. tires' Portland, Maine-based advertising agency, LSM/New England Group, which ``has become an intimate part of my business,'' Mr. Pappas said. He shared fiscal data with LSM before determining that any resultant financial impact from the Smart Driver's Club would be offset by an increase in business.
The club's best merchandising technique-besides word-of-mouth advertising-has been local talk radio, which he blithely says ``we virtually own-no other tire company advertises on it.''
To hawk the club's benefits via recorded commercials, Mr. Pappas turned to Bruce Williams, a nationally renowned syndicated talker whose financial advice program regularly garners high ratings.
Mr. Pappas said he discovered that ``the demographics of talk radio are our demographics: 35-and- older, service-oriented consumers. Plus, two-thirds of our customers are women, and we focus very strongly on them.''
He cited a recent study noting 50 percent of the cars sold in the U.S. are purchased by women. ``So 50 percent of our potential customers are women. The other percentage are men who phone us, then we meet their wives, mothers or girlfriends face-to-face across the counter.''
Appealing to that clientele, he installed in the women's restroom a changing table and chair for moms nursing infants. The store's waiting room has a carpeted kids' play area with a color TV.
``Our waiting room is a very important part of our business,'' he said, ``and we discuss these things in some of our advertising-again, promoting our differences from our competitors.''
While two wholesale clubs have grabbed about 30 percent of the local market, n.e.w. tires has maintained its business, and even grown by 15 percent.
That despite the fact that, according to Mr. Pappas, in the last two years other independent dealerships have lost 22 jobs in the Greater Portland area, three have closed or consolidated, and ``virtually all my competitors have lost business. That's why we're very gratified with our club program.''
Tire sales comprise 70 percent of his business, flanked by shocks, struts, alignments and mufflers. ``Yesterday,'' Mr. Pappas said recently, ``we did 14 free rotations. We clearly pick up extra business from the club...Some of our high-mileage drivers-like sales people-see us once a month. And we service their second car.''
A computerized data base of club members tracks when a customer comes in, and any services provided-free or otherwise. Cards are mailed to customers twice yearly reminding them to come in for a free tire rotation.
Again, to differentiate itself from competitors, Mr. Pappas said n.e.w. tires has direct links to manufacturers on 11 tire brands-stocks more brands than any other Maine dealership, an ad claims-and guarantees delivery within 24 hours on any tire the dealership doesn't have in stock.
He shuttles customers to work, offers a loaner car, and, for customers leaving their cars for the day, a pager-``in case more service is needed, we can contact them for authorization.''
``Our customers have told us they value these things, and they've rewarded us with their business.''
That formula seems to have worked. Although he would not give specifics, Mr. Pappas said, ``Within two years of opening our door (in 1989), we had established sales of over $1 million per year-and we've grown from there.''