When you're one of the nation's largest tire dealer marketing groups, it only makes sense that you take to heart the words of longtime baseball pitcher cum philosopher Leroy ``Satchel'' Paige, who warned: ``Don't look back. Something might be gaining on you.''
American Car Care Centers (ACCC) Inc. officials probably wouldn't attest to spending a lot of time gazing in the rearview mirror. They're too busy looking forward. But the fact remains: The group is competing with mega-dealership players, the likes of Les Schwab Tire Centers Inc., and tire manufacturer-operated dealer programs such as Michelin North America Inc.'s Alliance and T3, and Bridgestone/Firestone's TireStarz and Affiliated Dealer offerings. So it never hurts to continually size up your competitors as you're trying to beat them at their own game.
At ACCC's recent annual dealer meeting, held in a resort in Xcaret, Mexico, Len Lewin, the group's president/COO, and Dave Crawford, director of marketing, acknowledged the talent in the tire dealer bullpen has perhaps grown a little thin lately. Blame that on an abundance of programs all beckoning dealers with their siren calls of competitive product pricing and, inevitably, enhanced profitability.
Competition's keen
``With all the programs out there now, look back at when ACCC started in 1989-you didn't have Auto Edge, Alliance, TireStarz, T3, Affiliated Dealer,'' Mr. Lewin told Tire Business. ``So we're all out there drawing from the same pool.
``You try to find and select the best dealers possible and, very honestly, those that are left, for a variety of reasons, often just don't fit the program. I'm not saying there are none available, but they're getting more scarce. We're out there every day trying to find them.''
It has become for ACCC a daily chore, canvassing for new member dealers. ``Every one of our member distributors out there is a program manager. Part of their job is to look for new member dealers,'' Mr. Lewin continued, adding: ``But the reality is, there just are not that many that are capable, quality-type dealers left out there who fit our program.''
ACCC's biggest competitors are indeed the tire manufacturer programs, Mr. Crawford noted, because, ``due to their sheer numbers, the resources they have can be formidable.''
While the typical ACCC member dealership has been a one- to three-store operation, the company is looking for all types. Last year the group made its first foray into a new category of dealer membership, unveiling what it dubbed the ``Master Retailer'' level. That's someone who's not an ACCC shareholder but-with about 11 locations-is larger than a typical member. ``Our program has grown to the point where we're now able to attract people like that,'' Mr. Lewin said.
The ACCC group, which started out with five wholesale member distributors 15 years ago, now numbers 19 member distributors and 1,102 dealer locations representing almost 850 dealers in 44 states.
A Master Retailer company resides within an existing geographic boundary of an ACCC member distributor, and ``provides density within those areas so that the member distributor will not open any ACCC locations close to those retailers,'' Mr. Lewin explained.
``It gives us an opportunity to solicit a different category of dealer-a company not large enough or, from a geographical standpoint, not able to become an ACCC shareholder.''
And what is a shareholder? It's ``someone who can give us the kind of coverage and representation where we're not represented today,'' he said. ``They have the same views on going to market as we have as an organization. They have to agree on the ACCC philosophy, be compatible with the rest of the organization and grow it in their area.
``For 15 years ACCC has grown equity and brand image within the industry and our existing members want to guarantee that those who come in...are going to contribute and progress ACCC.''
While the group is nationwide, there are still some small pockets on the national map to be filled in. Mr. Lewin said those include Oklahoma, the Dakotas, Illinois, central Florida and some areas of New York. ``It's not that there are no dealers (in those areas), but we're having a hard time finding the right dealers to meet (our) criteria.
``We're not going to compromise our kind of organization just to bring onboard someone to fill in the map.''
Too big?
As the group has continued to stabilize its dealer base, some have left the program on their own accord, others were asked to leave. Besides increasing the group's consistency, ``the kind of dealer we have today... understands the program, is on board because he or she knows the choices available, has looked at other programs and made a choice to settle on ACCC for the right reasons,'' Mr. Lewin said.
Can the group simply become too big?
``I don't know that there's a number that's too big,'' he answered. ACCC's goal practically from its founding has been to have one dealer location for every 100,000 in population-``which leaves us a lot of room to keep moving,'' though he again conceded the pool of candidates has gotten considerably smaller.
The somewhat loose year-end goal for the group, which rang up $1.9 billion in overall business last year, is to hit 1,200 dealers. Mr. Lewin said ``we're always on the lookout but don't make a line in the sand or an objective as we would for tire units.''
By ACCC's 20th anniversary, Mr. Crawford said he'd ``love to see the company with roughly 2,000 dealer locations.'' But Mr. Lewin added: ``Our focus is not one driven by numbers, but by quality and consistency.''
Setting goals
If you look at the tire industry's performance last year being flat-with about a 0.7-percent increase-ACCC's gain of three points was reason for optimism, according to Mr. Lewin. ``Anytime you make some gain in a flat industry, you're making some progress-you've got to be gaining on the competition,'' he said.
``Every time we add a member distributor, it adds to our company's strength. We got over the 1,100 barrier for a dealer base. More importantly, we set in motion a number of consistencies early in 2003.''
Although ACCC as an organization has always had basic core values, Mr. Lewin said the group recently spent an entire board meeting formalizing those values, ``which direct everything we do.'' That included dissecting the entire organization, looking at what works and doesn't before determining ``if whatever we're looking at doesn't fit into those values, it's not worth pursuing.''
The ``keeper'' list definitely included ACCC's ``four pillars''-warranty programs on tires and service; a proprietary credit card; and the group's own ``American Radial'' private brand.
Fill rate roulette
One topic always guaranteed to provoke discussion among dealers is fill rates. Like most buying groups, ACCC has experienced hit-and-miss supply success in that area.
``Our fill rates last year were not as good as they were in 2002,'' Mr. Lewin told Tire Business. In 2003 they started off a ``little soft,'' but started to come back later in the year. Depending on product, those rates ranged as low as 70 percent to, in some cases, in the 90th percentile.
``Sure, we hear from our dealers,'' Mr. Crawford said. ``When they're not able to get product-and that's in all the brands we deal with-it's tough. And it's disappointing when they're out there pushing the product and supporting it. When you promise and you're not able to deliver, it destroys everything you work for.''
Through it all, ACCC has continued to work closely with its primary tire suppliers, Michelin North America Inc. and Continental Tire North America Inc.
``We had a very good year in 2003 with Conti,'' Mr. Lewin said.
In fact, ACCC's unit sales with that tire maker have increased in the last couple years because of good old-fashioned shoe leather-to-pavement canvassing.
``They actively solicited business with dealers in the field and worked with our guys,'' he said. Conti reps have been going into a market, canvassing it for a week, making cold calls then turning over the orders to ACCC member distributors.
``For us, the whole idea is consistency,'' he continued. ``If we can get the majority or all of our members supporting a product, a brand, that brings strength to the organization. With a company like Conti, it affords us quality products.''
Conti increasingly has become a more integral, prominent piece of the platform for ACCC, which began handling the General brand in 1996. The group has gone from what Mr. Lewin described as ``an opportunistic buyer'' with Conti to actually developing a program and portfolio of Conti products in addition to its offerings from Michelin Americas Small Tires.
Insurance concerns
But if there is one issue on the minds of most ACCC dealers, and the thing they ask most consistently for, Mr. Crawford said that would be a health insurance program-``it's a huge issue with so many complexities, legislation and federal government involvement.''
``Get a hundred people in a room and 98 want it,'' Mr. Lewin added.
The problem is, it's not a matter where ``one size fits all,'' because of state regulations, for instance,'' Mr. Crawford said, acknowledging it is ``a major hurdle we have to get over.''
At some point he sees an insurance program coming for ACCC dealers, but he believes ``it will take government intervention to change some regulations.''
ACCC and the Tire Industry Association (TIA), which forged a relationship late last year, are working together to explore options. TIA, for example, began offering its members an insurance program through Universal Underwriters but, as Mr. Lewin noted, ``there are at least seven states that won't even bid on it.''
``We're not giving up on (insurance)-it's a burning issue for our members, and we'll continue to work on it,'' he said. ``But it's an incredibly complex situation. If we eventually have to put together a patchwork quilt for our members, maybe we'll have to do that.''
Focus on training
Coming out of the starting gates in January, a number of prognostications were for the industry to grow by 3.5 points in 2004. But that said, Mr. Lewin noted a number of relatively new players in the market continue to flex their muscles, such as car dealerships and muffler/undercar-type repair shops continuing their expansion as tire sellers.
``So the market will remain very competitive,'' he said. ``Those who are the best-trained and qualified will get the business, but they'll have to be at the top of their game.... That's why, from a long-term standpoint, we have such an emphasis on training.''
Although dealers continually ask for more training, he said ``many dealers may not have the time or resources (to do it). But once they're in our program, one thing they talk about is how good the training is, how much it's helped them.''
With the increasing popularity and sophistication of ultra-high performance tires and, eventually, run-flats, ``there's a lot at stake, and people have to be trained. Being able to track the consumer and satisfy the consumer involves all kinds of training,'' Mr. Lewin said.
``We're competing with very sophisticated organizations that offer training. We can't be left behind.''