It's a scene familiar to many car owners. You're cruising down the road, humming along to the tunes on the radio when suddenly you hear clunk! Pulling over to the shoulder, you glance in your rearview mirror-and see your muffler lying dead on the pavement. Great timing, you grumble. Your next thought: Where's a mechanic?
Chances are, a repair shop isn't far away. Roughly 1.2 million service bays dot the nation, ringing up an estimated $90 billion in annual sales. Corner gas stations are still around, but chains like Firestone Tire & Service Centers, Midas, and Meineke Discount Muffler Shops dominate today's market. Their hold on the market, though, is no guarantee of continued success, says Beth Pecenka, equity analyst at Everen Securities in Chicago. Dealerships have improved their aftermarket services and are attracting more customers. What, then, is the key to staying ahead in the race? Competitive prices, winning locations, and maintaining a strong customer base, says Pecenka. "The whole sector has made a lot of headway in getting to know who their customers are," she adds.
Meineke relies on its more than 900 franchises to learn about its customers-and help target potential new ones. Every week, franchisees send detailed customer and service records back to Meineke headquarters in Charlotte, North Carolina. Records include the customer's name and home address; vehicle make, model and year; work performed; and payment method. It also explains how the customer learned about Meineke, such as through the yellow pages, a friend, or a TV commercial featuring George Foreman.
Reading the reams of data-more than 5,000 records arrive each week -takes more than just a good pair of eyes. For the past three years, Meineke has filtered the information through MapMarker, a geocoding system from MapInfo Corp. of Troy, New York. MapMarker cleanses the data, like eliminating post office boxes and assigning "north" or "south" to appropriate addresses, and pinpoints each location on a map. Meineke can then map its stores, competitors, and other retail outlets in relation to its customer base.
MapMarker's findings play a helpful role in advertising decisions, says Gene Zhiss, Meineke's vice president of marketing and dealer communications. The company's media and creative budget exceeds $20 million, he says, with both national and local strategies. By using MapMarker, Meineke can gauge the effectiveness of an advertising campaign by mapping all of the households in a particular market that visited an outlet because of a local radio or TV commercial.
The geocoding tool can also detect potential sites for new Meineke outlets by scouting for the locations of other retailers like Home Depot or Wal-Mart. "I look to see what creates a regional draw," says Stacey Monroe, senior real estate analyst at Meineke. "Instead of sending someone out to Kansas City or wherever to do months of site selection, we can do a lot of legwork before leaving the office. When you look at where other retail chains are, you begin to see areas for commercial development." Meineke recently opened a handful of new franchises in the the Atlanta region with MapMarker's assistance.
Still, MapMarker has its limitations. While the program can assess a store's performance against that of other outlets, says Meineke's Zhiss, it doesn't give insight into a market's overall potential. Enter TargetPro, a software engine from MapInfo that makes demographic data easy to use and implement. "Our clients told us that when they ordered demographic data from other sources, they'd get a box of 25 to 30 CD-ROMs," says Jonathan Winslow, product manager at MapInfo. "It took them forever to figure out where the information was that they wanted. TargetPro basically takes those 25 CDs and compresses it down to one."
Meineke uses TargetPro to study demographic and syndicated information from databases available through MapInfo. The data is wide-ranging, including statistics on the number, year, make, and models of vehicles in a particular geographic area. It can also provide estimates on service demands, like the number of autos that will need new shock absorbers in New York City, and how much that work generally costs in that region. Armed with this info, Meineke's Monroe says, "Our product and equipment department can say to a franchisee, 'You're servicing Fords, but you're not stocking enough of the right inventory because there are a lot of cars in your area built from 1985 to 1992.'"
With these programs, Meineke can customize trade areas as it sees fit. If market research shows that some customers don't cross a river or a state boundary to get to the nearest outlet-but will drive two miles farther to another Meineke franchise in a different Zip code-the company can use MapMarker to create a map that reflects those shopping patterns. Then it can overlay demographic data culled with TargetPro onto the map to determine the region's overall sales potential. "We can see what our share of the market is instantly," says Monroe. And as anyone in the auto industry knows, speed is power.