HUNTERSVILLE, N.C.—In its quest to reach 700 outlets by year-end, American Tire Distributors Holdings Inc.'s (ATD) Tire Pros program has experienced a few setbacks, but that's not dissuading the company from hitting its target.
Between March and May, Birmingham, Ala.-based Express Oil Change & Tire Service acquired 23 retail tire and auto service locations in three transactions, buying out Savannah Tire Brake & Alignment Centers, Trax Tires and Upton Tire—all Tire Pros franchisees. What might normally feel like a devastating blow gave Tire Pros President Dan Brown an unexpected feeling: pride.
“We take a lot a pride in that actually,” Mr. Brown told Tire Business. “When I got calls from those individuals to notify us they were in the process of selling their businesses, one of the things that struck me that they said was, 'We really appreciate all of the support through the years from Tire Pros, because we don't think we'd have been able to reap the value and have the exit strategy that has just materialized if we had not had this relationship.'
“So while it was painful for us to lose those franchisees—and they were good ones—I guess that pain was offset by knowing that we contributed in a very significant way to those individuals exiting and putting themselves in strong financial position for the future.”
In spite of the loss of those stores, Mr. Brown said he is confident the Tire Pros program—which stands at 651 locations—can hit its target of 700 stores this year, adding that the company expects to close deals for a few more stores in the near future. He attributed the company's strong growth pattern to Tire Pros' value proposition, the breadth of which he claimed “is unsurpassed.”
For Tire Pros dealers, the advertising support offered by ATD has always been a key element of the program, Mr. Brown said.
“We conduct an annual survey among our franchisees—and we've done this consistently since 2009—and we use that survey to allow them to evaluate our performance as a franchisor and gauge their level of satisfaction with the benefits that we bring them through the franchise,” he said.
One of the things the firm always queries in the survey is the program feature that dealers find most important to them. “Consistently, year after year, it's marketing. It ranks No. 1, hands down,” Mr. Brown said.
According to Wes Stephenson, vice president of operations, Tire Pros, everything begins with an annual advertising plan, developed between the individual dealers and Tire Pros' marketing support team. The organization has 11 such field representatives based around the country, who are familiar with its various regional markets and meet with dealers to set up ad plans.
“We completely manage the budget for them, but they are the executives that get to make the final decision on anything,” he said. “So they have the power to veto. This is not a dictatorial relationship whatsoever...but the marketing managers help the dealers never lose a dime of co-op that they earn.
“Something that the independent dealers have sometimes complained about is that the use-it-or-lose-it nature of co-op can cause some inefficiencies with the funds that you earn,” Mr. Stephenson added. “We take those things over and make sure the money is spent properly.”
Tire Pros and its dealers jointly derive an amount of money to contribute to the co-op on an annual basis, and Tire Pros manages everything, he said.
“We pay all the bills on marketing. We have media buyers, marketing coordinators, graphic design artists—we've got the complete in-house ability to take care of their needs, and so the cost savings that they enjoy is something that they can't get on their own. We provide all of that for them.”
The program is designed so that dealers are able to focus on operating their stores but also so that they have control, Messrs. Brown and Stephenson said.
Mr. Stephenson said Tire Pros has a “very robust” national dealer council program that has a powerful influence on how the program works. Four regional councils meet twice a year, and “the results, the findings, the concerns and questions from those go up to a national council that meets three times a year,” he said.
Top management from Tire Pros and ATD are present at all of these meetings, giving dealers access to those who affect change within the company. In addition, every dealer who joins the franchise is assigned a council representative who speaks on their behalf.
“One of the identified areas of value for the dealers is that they feel that it is a dealer-run organization that responds to the needs on the street,” Mr. Stephenson said. “We're very proud of how that functions and what it means to the recipient of the service.”
According to Mr. Brown, the next step for Tire Pros is boosting consumer awareness on a national scale, thereby creating even more value for its members.
Tire Pros recently completed a brand study to gauge its share of top-of-mind awareness among consumers throughout its markets.
Though the firm is not yet disclosing the results of that brand study, Mr. Brown said the company will use the information in order to benchmark its performance as the group pursues national advertising opportunities.
The firm recently bolstered its already strong local and regional marketing efforts with the launch of a national ad campaign involving multiple major college conferences. (See related story on page 8.)
Marketing isn't the only area in which Tire Pros assists its dealers.
Tire Pros offers members various training opportunities, including bi-annual dealer roundtable discussions, a summer road show featuring expert speakers and its own PROS (Professional Retail Operations and Sales) training program, which Mr. Stephenson said is “second to none.” Through the program, Tire Pros' team of regional business consultants work with store level employees to teach them key skills for driving sales.
According to Mr. Stephenson, Tire Pros' efforts on the training and marketing ends have paid dividends.
“One of the things we are able to gauge with ATD is we have program dealers on the Bridgestone Affiliated Retailer program or the Goodyear G3xpress program—the various program that vendors offer,” he said.
“We have non-Tire Pros program accounts that we sell to and we have Tire Pros program accounts that we sell to, and on the average, our Tire Pros programs hit their numbers at a rate 10 percent higher than those that are on the same programs but are not affiliated with Tire Pros.
“So I think that speaks well to the support and the sales driving support that Tire Pros provides its members.”
To reach this reporter: [email protected]; 330-865-6148; Twitter: @Will_Schertz