HOLLYWOOD, Calif., March 16 2018 — Sitting in his hotel suite just a few miles from the beach, on the top floor of the Hilton Los Angeles/University City Hotel, Walter Lybeck used a surfing analogy to describe the unprecedented success of the Point S USA dealer cooperative in 2017.
“We made a big wave with Point S, and you got to paddle to stay on that wave, or you lose that wave,” Mr. Lybeck, the Point S USA CEO, said, a smile breaking over his face.
“We’ve got the momentum, so let’s ride that momentum all the way into the beach to succeed. We have to find ways to continue that growth.”
Point S, the marketing group with locations mainly in the Pacific Northwest, celebrated wave after wave of success over the last 12 months during its annual owners meetings, held Feb. 22-24 at the Hilton Universal and nearby Universal Studios Hollywood amusement park.
Nearly 500 dealers, vendors and guests attended the group’s annual owners conference — or about 80 percent of all Point S dealers — which included a general session, a shareholders’ meeting, product workshops and a trade show featuring more than 50 vendors.
Among the attendees were representatives from Point S dealer groups in Germany, Norway and Canada. There are more than 3,600 Point S-branded locations globally in 32 countries on four continents.
Point S dealers, vendors and their families also received a tour of Universal Studios, including an exclusive event held after park hours at the Wizarding World of Harry Potter, as well as a celebration dinner at the renowned Peterson Automotive Museum in Los Angeles.
The talk at most of these events centered on a fruitful 2017, a year during which the Point S network grew by 20 points of sale, the most “legitimate” growth the group ever has experienced, according to Mr. Lybeck. There now are 212 Point S locations in 16 states throughout the Western U.S.
The other big waves to break in Point S’ way include:
- Revenue growth of 8 percent, to go with unit sales growth of 6.5 percent;
- Even though they were members of the Point S family for an average of just six months, the 20 new locations accounted for $4.5 million in additional sales and almost 50,000 units sold;
- The addition of a 57,000-sq.-ft. distribution warehouse in Memphis, Tenn. part of a deal signed late last year with Nussbaum Distributing Inc. to be its distribution partner for Point S member dealers in the Midwest;
- The continued conversion of Tire Factory stores to Point S; officials said around 90 percent of all Tire Factory dealers have made or are in the process of making the branding change;
- Group Michelin became one of the Point S network’s preferred partners, along with Balkrishna Industries Ltd. (BKT) and Camso Ltd. for their off-road and industrial lines, respectively: and
- Point S USA won the international Point S group’s Prix d’Honneur Award, in recognition of the marketing group’s “high quality” conversion of Tire Factory to Point S, as well as its “commitment to carrying the torch of the Point S brand across the U.S.”
“This is a fun year,” Mr. Lybeck told Tire Business. “My conversation aren’t always going to be this fun with you. Hopefully for a while, but right now, it’s a really fun year.”
“There cannot be a better time to be a member of Point S,” Clint Young, the group’s director of sales and marketing, said.
“The Point S brand is contemporary and relevant in providing a better customer experience for our members, and it’s the support we get from our Point S preferred partners that helps make that possible,” Mr. Lybeck said.
The partnership with Michael and Joyce Nussbaum’s well-established distributing operation, which distributes tires within a 150-mile radius around Memphis, lays the groundwork for Point S to continue its expansion east.
In fact, Mr. Lybeck said he expects a deal to be signed with at least one dealer in Tennessee within the next six to eight weeks, and he said he would “love it” if Point S had 12 locations in the state by year-end. Several dealers from Tennessee were among recruits who attended the annual meeting.
Point S has hired one full-time employee in Tennessee — Brandy Na will be responsible for, among other duties, warehouse operations and sales — and it has hired a contract worker (recruiting) as well. The team there is in the process of processing product into the inventory.
“The Tennessee model is unique and nice because it’s a recognition that our members wholesale,” Mr. Lybeck said. “And wholesale and retail are very, very similar in nature and types of people.”
Nussbaum Distributing will handle Point S’ distribution in Tennessee, and each will stock different products in their warehouses.
“It’s a great partnership,” Mr. Lybeck said. “(Mr. Nussbaum) is somebody who is independent-tire-guy minded, somebody who was on the board of Del-Nat (Tire Corp., which was bought by TBC Corp. in 2014) and understands groups. This represents to him something he always believed strongly in, which is that independents needed to be branded long-term to succeed.”
Growth, in fact, is such an important mantra for Point S that it has a committee devoted to the undertaking, one of three initiatives the group is emphasizing this year. The others are technology and brand protection.
Representatives of all three committees addressed Point S dealers at the general session.
“All those folks (who attended the meeting) share in that success of growth because they own the company,” said Devin Barr, account director for Oregon-based MBT Marketing Communications Inc., which handles Point S.
“That’s a big focus. Technology is providing resources and tools to take advantage, and branding is a big investment for Point S dealers to change and adjust the culture of the store, and we have to make sure to protect that.”
According to Eric Gill, chairman of the Point S board and an independent dealer with 15 Point S-branded locations in Oregon, the growth committee is tasked with “making sure we continue to grow our company profitably, both within our budget and within our growth plan.”
Mr. Lybeck said over the next three years, he hopes Point S has locations in nine more states. The goal, he said, is to be in all 50 states.
“We’ve got partners that will help us get there,” he said. “There is long-term strategy involved in that. Our commitment is continued growth, and as long as we’re pulling our end of the bargain, which we are, we’ll get there.”
The Technology Committee, meanwhile, is putting the finishing touches on several online tools that will make it easier for Point S dealers not only to sell tires online, but also to track sales figures easily and compare them against other stores within the network.
The tool will crunch data gathered from sales to illustrate potential growth opportunities for the dealers as well as focus on retaining customers.
“How do you manage pricing? How do you set pricing? What should your price be compared to your competitors? Do you really need to match Discount Tire or not?” Mr. Lybeck asked rhetorically.
“If you’re an independent guy, you have a lot of work to try to figure all that stuff out. That is something we can systematically help everyone with. That’s the kind of thing we want to have in that program so that we can simplify the members’ lives and allow them to serve their customers and run their businesses.”
In an effort to accomplish that, Point S will hire a Web coordinator, whose responsibilities will include communicating with dealers consistently and serving as a resource to help tire dealers implement these online strategies.
Point S also is collaborating with BAYiQ, a cloud-based marketing platform company that services tire and auto service dealers, to provide a rewards tool that utilizes accumulated data to email customers and drive traffic to shops.
The brand protection committee will emphasize three areas: the brand, the medium and programs available.
“I expect a more robust, a different way to look at our marketing calendar that kind of breaks away from the vanilla that we see across our industry,” Mr. Barr said.
Mr. Lybeck encouraged Point S dealers to embrace the technological changes ahead.
“While we can develop all these tools, we really need to help them adopt and try these new things,” he said. “I work for them. They’re my owners. I have a great deal of respect for them. They know how to run their businesses…. They own us, which makes them highly invested in what we do, and makes them highly emotionally charged in things they believe or don’t believe in about us.”
He said he wants dealers to understand the management team’s vision for growth.
“Our goal is for a long-term independent member success,” Mr. Lybeck said. “We all see the vision. It has to include technology and ultimately transparency in pricing. It doesn’t mean we have to be the cheapest online. It doesn’t mean we have to be the cheapest tire dealer in town.
“We have to be that value proposition for tire dealers and for consumers.”This article was originally published in Tire Business.