CHARLOTTE, N.C. (July 7, 2006) — To increase dealer loyalty and product purchases, American Tire Distributors Inc. (ATD) is implementing a new marketing strategy that integrates all of its benefits and services under one umbrella.
The Charlotte-based distributor launched ATD ServiceBay in January as a “cornerstone” for all of its future marketing programs, according to Ron Sinclair, ATD vice president of marketing.
ATD ServiceBay is not what ATD calls a program, but rather a brand that represents all the benefits ATD offers to its member dealers, Mr. Sinclair explained. ATD has structured ServiceBay into seven components called bays, and dealers can participate in any one or all of these bays based on two criteria—total annual purchases of all ATD products and annual growth in passenger and light truck unit purchases.
“The bottom line is, as the dealer's commitment to ATD increases, our commitment to that dealer increases,” Mr. Sinclair said. “We think that's very fair and reasonable.”
ServiceBay is not replacing AutoEdge, ATD's nearly 6-year-old marketing program, but he acknowledged that more than half of AutoEdge participants have converted to ServiceBay's programs so far. At the end of last year, ATD had 325 AutoEdge dealers and currently has 103 dealers in that program.
“We have to watch and see if that conversion continues, but right now we continue to offer AutoEdge and support AutoEdge,” Mr. Sinclair said. “It's only been six months (for ServiceBay), so we'll have to see how things continue to evolve.”
Mr. Sinclair outlined the seven components comprising ServiceBay:
* WarrantyBay, a program that offers national road hazard, treadwear and service warranties that are honored at more than 20,000 dealer locations;
* CreditBay, a CarCareOne private label credit card program through GE Capital Corp. that charges dealers no fees for the fist six months, exclusive to ATD ServiceBay dealers;
* TrainingBay, which includes a number of training programs exclusive to the ServiceBay network;
* MarketingBay, a new program that provides funds for showroom and technology upgrades, marketing and in some cases, co-op advertising;
* TechnologyBay, which relies on the ATD Online ordering system to help dealers improve their business efficiencies and create, print and file customer price quotes online;
* BusinessBay, a program where dealers can take advantage of their group's national buying power and discounts ATD has negotiated with third-party vendors; and
* BenchmarkBay, a consulting service where ATD aids dealers in measuring their operating costs vs. other dealers of similar size.
ATD already has launched all of these components, with CreditBay debuting less than six weeks ago, he said.
Some of AutoEdge's components have been incorporated into ServiceBay but Mr. Sinclair pointed out certain components—MarketingBay and BenchmarkBay—are completely new concepts, while WarrantyBay and TrainingBay have been expanded and became more structured than their AutoEdge versions.
“To put it in perspective, we've been out for less than six months with ServiceBay and we were running in the low 300s in terms of AutoEdge dealers,” Mr. Sinclair said. “We've already got over 500 dealers enrolled in WarrantyBay through six months. I would ex-pect that we're going to have well over 1,000 by the end of the year.”
Dealers who purchased $25,000 or more from ATD last year can be a part of ServiceBay and qualify for nine “bay levels” of varying services and support from ATD.
For example, a dealer who buys more than $125,000 worth of tires, wheels, equipment and supplies from ATD and increases that annual purchase by more than 5 percent qualifies for the ninth and highest bay level, which means he or she will receive the greatest amount of funding from ATD.
“It's a strategy for us, for our customers and specifically for our independent tire dealer customer, which is still the vast majority of our business,” Mr. Sinclair said. “And it's critical for us to help them. Dealers are the lifeblood of American Tire Distributors.”
Tires & More
Late last year ATD acquired Sparks, Nev.-based Silver State Tire Co. and its Golden State Tire Distributors affiliate, and hence also acquired Silver State's Tires & More franchise program, which has about 41 participants in Nevada and California.
To date, ATD is continuing the Tires & More program, and Mr. Sinclair said the only change ATD has made is discontinuing the group's road hazard warranty in favor of WarrantyBay, which charges consumers for road hazard warranties.
“We quickly tried to learn what that program is all about, which we did.… We certainly didn't want to get in and make a lot of changes. We wanted to learn what works with that program,” he said.
Silver State franchisees in the past had offered a free road hazard warranty to their customers, and Mr. Sinclair said that once ATD introduced dealers to WarrantyBay during Silver State's May dealer meeting in South Lake Tahoe, Nev., about 30 of them signed up for WarrantyBay.
Besides Tires & More dealers, ATD also has some Michelin Alliance, American Car Care Centers Inc. and Bridgestone/Firestone TireStarz dealers under the ServiceBay umbrella. Mr. Sinclair noted ServiceBay fits in well with other marketing programs because it serves as a foundation for dealers and for how ATD wants to relate to its dealers.
“I think what we're trying to evolve to—and it takes time but we're getting there—is really more of a consultative relationship with our dealers as opposed to just saying, 'Hey, we have this tire, and it's at this price,'” he said.