By every metric, 2015 was a big year for Big O Tires LLC franchisees. December marked the 19th straight month of same-store sales growth for the TBC Corp. subsidiary.
“That’s not just a good year, that’s a trend,” Kevin Kormondy, executive vice president and chief operating officer of Big O Tires, told store owners attending their annual convention in Phoenix, Ariz., April 25-28, 2016.
“The trend’s continuing. We’ve posted same-store sales growth every month in the first quarter of 2016. That puts our streak at 22 months and counting. That’s definitely cause for celebration.”
Big O Tires has 390 franchisee-owned and two company-operated locations in 19 states. Eighty-seven percent of Big O Tires stores were represented among the 712 franchisees, their guests, and their suppliers at the convention. They had plenty to celebrate in terms of 2015’s sales and results:
- Sales average per store was more than $1.8 million.
- Retail sales were up 5.5%.
- Same-store service sales were up more than 6%.
- Car count was up 3.1%.
“There was a lot of pessimism about 2015 in the industry,” Kormondy reminded franchisees. “The Rubber Manufacturers Association predicted flat sales for tire units. We turned that prediction on its head. We met and in some cases exceeded our goal of a 3% increase.”
Last year’s increase in service sales is proof that customers increasingly see Big O Tires stores as a one-stop shop for all their car care needs, according to Kormondy.
“Our corporate-wide service balance of sale is around 40%. So we’ll continue to see opportunities in this segment of our business as we focus more and more on alignment sales and refine our skills on inspecting, estimating and selling service, not to mention our ever-present focus on tires.”10 of 14 new stores are conversions
Big O Tires added 14 stores in 2015. “We enjoy a great reputation in the marketplace. We’re capitalizing on that and our other strengths to grow our family,” said Kormondy.
“As part of our growth strategy, we made significant headway in convincing people to convert to Big O Tires last year. Five of the 14 stores we opened in the last fiscal year are owned by people who were previously independent operators. They saw the value of our program, and they converted their stores to Big O. Another five stores were taken over by existing Big O franchisees who took out a competitor and converted that location to a Big O store.”
Digital marketing support
Initiatives in 2016 include more resources for digital marketing to support Big O Tires franchisees. “It is a brave new marketing world out there. It’s increasingly complex and sophisticated. But we now can leverage technology to target customers in ways we didn’t dream possible just five years ago,” Kormondy told dealers.
Big O Tires grows through new franchisees who are new to the industry, existing franchisees who open new stores, and independent dealers who join Big O Tires. “We’re looking at conversions of independents as a growing part of our growth strategy, and you’re starting to see that mix increase,” says Brant Wilson, senior vice president franchise for TBC Corp.
“One of the reasons for the increase is the competitive nature of marketing,” says Wilson. “It is difficult for the independents to be the great customer service providers they are and to be experts in marketing.
Digital marketing support is a major benefit Big O Tires offers its franchisees, according to Wilson. “We tap into the resources, the expertise, and the buying power of TBC and direct that to our franchisees.”
Big O Tires helps dealers with digital marketing in three ways. The first is through search engine marketing (SEM), also referred to as paid search.
“We have a very healthy advertising budget, and we’re shifting more to SEM. If you aren’t spending enough and you’re not spending it smartly, you are going to lose customers even if you have a great shop. You’re going to lose customers online.”
Big O Tires has increased its level of investment in important keyword search terms that lead consumers to its franchisees when they are in need of tire or automotive services.
Over the years, Big O Tires regional ad groups realized that consumers go online to conduct research before making major purchase decisions. Wilson says that by investing in the keyword searches that happen during this process, Big O Tires is in a position to gain more customers.
Keyword purchases are timed with Big O Tires’ national promotions calendar. “We have a very robust national promotions calendar,” says Kim McBee, vice president of marketing and advertising for Big O Tires.
“If we’re having a $100 off Big O tires, we will buy those keyword searches during that promotional time frame. When an in-market shopper is searching for tires, you want to do everything you can to get Big O Tires in the top 1, 2 or 3 spot in the search results.”
Mobile website
Big O Tires launched a mobile version of its website for use on smartphones in mid-April. Mobile “is the place to be,” says Wilson. “Eighty-two percent of consumers that buy tires have been online before they go into the store. They’re doing the shopping online.” More than half of online shoppers now shop from a mobile device rather than a desktop computer, according to Wilson.
Consumers can schedule service appointments online through the website, but they cannot purchase tires on it. “Currently consumers can search tires, find what they want, add it to a quote, send it to a shop for installation, and make an appointment. They can do everything short of actually purchasing it online. Because we have a physical retail presence, unlike manufacturers, we don’t need to lead with buying tires online,” says Wilson.
Technology company partnerships
There’s more to digital marketing than SEM and a mobile website. The third component of Big O Tires’ support is partnering with technology companies to bring digital capabilities to dealers. Big O Tires has 19 partnerships with technology firms that manage digital marketing functions such as reputation management, customer relationship management (CRM), search engine optimization, and social media for its dealers.
Wilson says technology will never replace the most important aspect of a tire store: great customer service. “However, if you do not have an evolving and growing digital strategy, you’ll have fewer and fewer new customers to provide great service to.”
Independent dealers are typically interested in Big O Tires’ private label tires, according to Wilson. “They get very excited about our tire options, but when they realize we can take care of digital marketing, such as SEM and CRM and mobile optimized websites, that’s all they want to know. Teaming up with TBC differentiates us as an option for independents who feel they can’t keep up in the digital market space.”
