Point S Creates Programs That Invest In Independents

Imagine a line graph where the line extends so far up and to the right that bells sound and confetti inexplicably falls from the sky – that’s where Point S lives. In 2021, total sales dollars across Point S locations were up 24% from 2020. Same-store growth was up 15%. The co-op added 20 new members last year–bringing its total store count to 257 stores in 27 states. And, it expanded to Missouri with a location just over the Tennessee border. Despite these ups, factors like industry consolidation are happening at a rapid rate, and Point S executives have a laser-focused goal: recruit independents who want to stay in the business and give them access to premium resources to become the best of the best.

“We have to stay true to who we are,” says Walter Lybeck, CEO of Point S Tire & Auto Service, in an interview after Point S’s 2022 Dealer Conference and Trade Show in late February. “We know that the competitive landscape is changing, but it’s not necessarily a threat. We want to focus on dealers that are really focused on being independent… My job is to find the ones that are ready to stay in the business and keep them.”

To do that, Lybeck says Point S is enhancing the resources and services available to its members. The target is to continually make existing member businesses better–and continue pushing the envelope–to increase individual store sales, which in turn, boosts the organization as a whole.

“Our member’s success is our success,” Lybeck says, nodding to the co-op’s motto. “The objective is we want to increase profitability at your store because when that happens, we all win.”

One of those initiatives Point S has started this year is its “Master Shop” program, which utilizes a business coach that visits the store and gives owners actionable ways to improve their processes and management. Both in-person and online sessions hold owners accountable for the changes allowing them to work through any challenges with the support of an on-staff coach. Lybeck said the one-on-one coaching will be similar to that of 20 Groups, and the co-op is accepting applications for its first round of coaching.

“Not only is it good for existing members, but you have a whole market of new owner members–for example, someone buys a store and needs to understand some of the basics of running a store from a leadership perspective,” Lybeck says. “I think there are a lot more legs to this than just going in and helping a few stores make some more money.”

Point S is also continuing to update its B2B and B2C interfaces online as well as add to its All-Trac Platform, a proprietary shop management and customer communication tool. While All-Trac is optional for Point S member locations, Lybeck said it is now being heavily used in 78 Point S locations as an online appointment scheduling tool where dealers can schedule by bay, by person and by platform. Dealers can then text with customers through the platform to share digital inspections and invoices as well as garner customer reviews.

“It’s definitely improved this year,” Lybeck said, noting that 95,000 appointments were scheduled using the platform in 2021 across the Point S network. “We’ve spent a lot of time making it ready for the masses. It’ll tie into our website and our user accounts that we’re working on right now.”

This year, Point S plans to integrate the platform with a dealership’s B2C website, so that customers can search for tires online, order them and make an appointment to get tires installed at their Point S location.

“We’re building a next-level search for tires,” Lybeck said. “We’re implementing a whole new web platform initiative this year to launch a new website that’s a fully integrated and seamless system from the consumer all the way to the shop.”

Improvements to Point S’s B2B platform are fully complete with integrations taking place at more locations this year, Lybeck said. When fully integrated, commercial and government accounts that Point S dealers serve will be able to see what’s in stock at the nearest Point S warehouse.

“Whether the member has the product or not, they will now be able to show the product online and when it will be available,” Lybeck said. “Picture a store in rural Montana. He’s got 45 medium truck tires [in inventory], and his commercial account wants to buy medium truck tires. He can now show the 3,000 that we have in stock in our Salt Lake City warehouse. So, the dealer can say. ‘I have this amount now and can have this in two days,’ or whatever the delivery schedule is.”

Continuing Record Growth

When comparing Point S’s growth from 2020 to 2021, Clint Young, Point S COO, said a few stats stand out. First, same-store sales growth, or the amount of sales existing members brought in (which excludes sales from stores that joined Point S in 2021), was up 15%. Young credited the promotions the organization ran from its preferred partners as a reason for the growth, despite a challenging environment for obtaining products.

“We always make our preferred partners our recommended choice to all our stores, but when those products aren’t available, our purchasing team hits the ground, and they try to find tires for our dealers. They do a really good job of that,” he says. “From 2020 to 2021, those same challenges are still out there. The ports are all backed up. Transportation to get the tires, if they are there, is difficult. It’s a challenge. Manufacturers aren’t back to producing at the same rate they were. From everything we hear, it’s going to be difficult through this year as well.”

However, Young mentioned a bright spot despite business challenges in 2021: In the 20 new stores Point S acquired, their purchases from the group were 21% higher than the prior year’s stores added. Most of the new stores were in the Mid-South region as well, which is an area of focus and growth for the co-op.

“It’s actually proven to be one of our fastest-growing markets,” Young said, thanks to the co-op’s distribution footprint in Memphis. “If you look at where we’re at in the lower corner of Tennessee and go maybe 270 miles out from there, that’s kind of our circle of influence. We want to be able to go out and find dealers and provide them great distribution service.”

In the 20 new stores Point S acquired in 2021, their purchases from the group were 21% higher than the prior year’s stores added.

– Clint Young, Point S COO

Young said as Point S continues to grow, its goal is to have a presence in all 50 states, with a growth rate of about 20 stores per year becoming members of the co-op.

“Whether we do that in three years, or five years, or who knows how long, that’s our goal,” Young said. “It’s challenging for us because we don’t acquire through acquisition, like some of our competitors. We empower members to join us. That recruiting process takes a long period of time.”

Lybeck added, “We don’t force or put any kind of contractual requirements to keep members involved. It goes against who we are. By not having those contractual requirements, you end up with a lot more loyalty and a lot more family… Our goal is to help the independent have the power to compete with the larger groups, stay independent and build businesses for their families and their communities.”