Tire dealers enrolled in Tire Centers (TCI) L.L.C.'s T3 dealer marketing program have plenty of new reasons to buy more tires from the company in 2005.
Dave Snyder, TCI vice president of small tire marketing and sales, unveiled an expanded slate of buying incentives to dealers attending the marketing group's sixth annual Great Escape dealer trip Feb. 13-17 at the Atlantis resort on Paradise Island, Bahamas.
Among the incentives are a chance to win a driving trip in Baja, Mexico, a four-day trip to the Rally Catalunya World Rallye Championship event in Spain and two vehicles-a 2006 Ford F150 Crew Cab 4X4 and a 2006 Ford Mustang GT. The latter two prizes drew oohs and aahs from dealers when announced.
Mr. Snyder said he increased the number of buying incentives to drive sales and build excitement.
``This is the first time I've really tried some of these incentive offers to this extent,'' he said. ``So guess I will reserve judgment on whether it's a good decision or not.''
Speaking to 380 tire dealers, spouses and company employees gathered at a business session, Mr. Snyder said he expects the T3 program to grow from its current 503 to more than 570 dealer points of sale in 2005.
Most of that growth will come from four new markets the company entered in 2004 following the opening of distribution centers in each area.
These were Sacramento, Calif., where TCI added a distribution center in mid 2004, and facilities in Baton Rouge, La., Miami and St. Louis, all of which came on stream late last year. Each center is about 30,000 square feet in size and has enough ceiling height to stack tires three tiers high, providing the equivalent of 90,000 square feet of storage capacity, Mr. Snyder said.
These sites give TCI 34 distribution centers in the U.S. and provide the company with the ability to service more than 65 percent of the country with tires.
``We are truly becoming a national distributor of small tires in the U.S. market,'' Mr. Snyder said. ``In fact, of all replacement tires sold annually in the U.S., TCI has a 1.5-percent market share.''
In 2005, he expects TCI to distribute 3.2 million passenger and light truck tires in the U.S., up from 1.8 million four years ago-an increase of more than 75 percent. Sales should reach $260 million for TCI's small tires unit.
Although Duncan, S.C.-based TCI is a wholly owned subsidiary of Michelin North America Inc., the tire maker treats the company as just one of its many customers, Mr. Snyder said.
TCI, through its small tires division (the company also has a commercial/retread unit), offers the same tire programs that all other Michelin distributors do, such as TBC Corp., American Car Care Centers Inc. and American Tire Distributors Inc. ``I am under the same contracts or whatever agreements my competitors are under,'' Mr. Snyder said.
The company distributes primarily Michelin products including the Michelin, BFGoodrich and Uniroyal lines, as well as tires offered under the Trivant private brand umbrella. Dealers on the Bahamas trip also learned that TCI recently became a direct dealer for the Pirelli, Hankook and Yokohama lines in most markets. Pirelli and Hankook have a growing original equipment presence, Mr. Snyder said, in explaining why he added these lines.
``It helps improve our customer service to have some other brands available to us in the event...our customers ask for them,'' he said.
Through its T3 program, TCI aims to help participating tire dealers achieve long-term success in the market and reduce costs, Mr. Snyder said.
The program provides participants with advertising and promotion support, point-of-sale displays and materials, outside signage and complete showroom design, a T3 consumer credit card, store employee training, a national service warranty and volume-based purchasing programs for equipment, uniform and payroll systems.
New for 2005, the company plans to hire and train two full-time, ultra-high performance development managers, whose role will be to develop Michelin and BFGoodrich V- and Z-rated tire sales at T3 outlets. Several of the 2005 incentive programs support that effort.
What T3 does not offer is a discount-pricing program, Mr. Snyder said. Instead, tire sales and pricing for T3 and non-T3 dealers are handled separately by TCI's small tire division.
In establishing T3, Mr. Snyder said he consciously kept the dealer marketing program apart from the sales group. Sales staffs tend to be short-term driven, he pointed out, whereas T3's focus is long term, such as laying out dealer marketing programs throughout the year.
``When the same group has sales and marketing responsibilities, sales prevails and marketing falls to the background,'' he said.
As a result, the goal of the company's 16 dealer development managers (DDMs) is helping the T3 dealer be successful, not selling them tires. ``I think it works better this way,'' Mr. Snyder said.
Most dealers at the meeting seemed to agree.
``We love the program,'' said Mark Eagleston, director of sales and new store development for Ganin Tire based in Brooklyn, N.Y. T3, he said, ``inspired us to redecorate and modernize our stores. They came in and helped with point of sale, tire displays and the interior of the shop.''
The training programs are ``fantastic,'' he continued. ``The training program alone is worth getting into the program for.''
Robert Pickrell Jr., president of Royal Tire Co. in Salina, Kan., and a member of the T3 dealer council, suggested more consistency is needed among the program's dealer development managers, especially in the area of advertising support. ``Some DDMs do a good job, and some are not as good as they could be,'' he said.
Mr. Pickrell also expressed dissatisfaction with changes to the 2005 Michelin Alliance Associate Dealer (AAD) program offered to dealers through TCI. That program is now based solely on tire volume for Michelin and BFGoodrich products rather than by share of account and volume based on all units purchased. Under the new rules, Alliance Associate Dealers must purchase at least 800 Michelin and BFGoodrich tires to qualify for the AAD bonus program.
``Most dealers lose a point or two on the back side due to that change,'' Mr. Pickrell said.
The T3 program is designed for dealerships selling between 3,000 and 5,000 tires annually at each point of sale. ``That dealer is probably not large enough to do really strong advertising and promotional activities on their own because the tire business is not large enough for it.... That's where T3 can give value to them,'' Mr. Snyder said.
It's also about relationships.
In describing the program, Mr. Snyder uses words like loyalty, commitment and being there for the customer.
``It's really important to me that every one of these dealers feels that our commitment to them is real and going to be long lasting,'' Mr. Snyder said.
That's a point not lost on the program's participants.
``It's important to me and to my family to deal with people I trust,'' Mr. Pickrell said. ``It is a factor in our loyalty with Tire Centers. I do feel they care about us.''
Added Mike McIntyre, vice president of four-outlet Parrish-McIntyre Tire Co. in the Akron area: ``It's all a people business, and they're good people.''