America’s love affair with cars is going through a revival. After the government bailout of the auto industry car sales slumped, only to pick up again when American carmakers unveiled new models, designs and features engineered to compete and beat foreign competitors. That’s good news for AAA Carolinas and its emerging car care business.
More cars per household, more expensive cars, and consumers keeping their cars longer, all add up to more demand for car maintenance and repair services, says Dusty Holcomb, recently named president of AAA Car Care Centers. With over 1.8 million members in the two Carolinas, it is one of the fastest growing AAA affiliates in the country over the last 20 years. With AAA Carolinas’ hefty customer base and the number of car owners in the Carolinas, the market opportunity is huge.
The AAA Brand
If you think that AAA Carolinas’ Car Care Centers are cropping up everywhere, it’s not your imagination. “With the downturn in the economy and the availability of affordable real estate, we took advantage of it,” says Holcomb. “We see continued opportunities for growth this year and beyond in our car care business.”
The number of AAA “superstores” are also increasing to meet the demand. The two most recent additions, one in Ballantyne and the other in Steele Creek, bring the number of Car Care Centers to 30, including 10 additions in 2009 and two in 2010. Six more are scheduled to open this year.
“Our superstores are anchored by the Car Care Centers,” says Holcomb. “Previously, we located our membership/travel/insurance offices in strip centers but today we combine our entire offering under one roof. This has reduced our cost of occupancy and given us the opportunity to co-locate the new superstores in higher-traffic retail areas, such as the corner of Ballantyne Commons Parkway and North Community House.”
“With their combined offerings, superstores offer access to car care and other services in a clean, upscale setting where customers can relax, get coffee, watch television, connect to free Wi-Fi, and watch their children play in a play area,” continues Holcomb.
Dave Parsons, president and CEO of AAA Carolinas since 1991, explains their growth strategy: “It’s about growing membership to achieve scale, and offering those services which we feel both provide added value to our members and take advantage of markets that are underserved.” He points to the Car Care Centers, first offered in 2001, which offer customers a trustworthy name in automotive maintenance and repair and fit hand-in-glove with the other AAA businesses.
“Consumers know they can trust the AAA brand. We do whatever we can to preserve that trust; it is the key to our success,” says Parsons, humbly.
Largest Travel Agency in the Carolinas
AAA Carolina’s most well-known retail business is travel services.
“Our leisure travel agency is the largest in the Carolinas,” says Parsons, noting that travel’s gross revenues are around $240 million annually, which gives customers access to tremendous travel deals.
“Whether you’re taking a short drive to Charleston or booking a dream cruise to the Mediterranean, AAA Carolinas can help with the trip,” says Parsons, “and likely will save you money and avoid problems over booking it yourself.”
“Travel was hit hard by the recession. Both leisure and business travel decreased and people waited to see what was going to happen with the economy before making any plans,” acknowledges Parsons.
“We had a down travel year in 2009, but then things picked up last year. There was a pent-up demand in the travel market that was released by significant price cutting and some tremendous values,” he continues. “We saw a 26 percent increase in travel from 2009 to 2010.”
No Ducks, No Lizards, Just Great Insurance
Insurance services are also available through licensed insurance agents at the AAA superstores. Agents offer insurance quotes through a number of carriers to give customers more options and better rates.
AAA Carolinas offers a portfolio of insurance products through national insurance carriers or can provide auto coverage through The Members Insurance Co., or TMIC, its wholly owned insurance subsidiary. Those AAA Members who qualify can receive discounts for mature operators, multiple car policies, auto and home policies and clean driving records.
Insurance is a fast-growing business for the company, growing by 25 percent year over year for the past few years, according to Parsons, with annual premiums of nearly $100 million.
Traditional Automotive Servicing
AAA is most often thought of in terms of its original purpose, offering assistance to motorists who have vehicle breakdowns. No doubt, most people associate AAA with tow trucks and roadside assistance. In 2010, AAA ran over 850,000 road service calls in the Carolinas. In addition, maps, tour books, Triptiks, and drive vacation planning is also available to members.
AAA membership, available at six different levels, begins at $49 a year. All tiers include roadside service calls but the number of miles your car can be towed for free changes per membership tier. With a Premier membership, you can be towed 200 miles and a free rental car is also provided.
“Show Your Card and Save is a great member service which, when taken advantage of, will more than pay for the cost of your membership, Parsons points out. “Discounts on travel, hotels and many national and regional products, services and entertainment are available. You can save money on clothing, phone services, restaurants, Dish satellite service, satellite radio, eye glasses, pets, and prescription services.”
“Our discounts range from national retail services to local events,” says Parsons. “One recent deal, available to members during the Queen’s Feast restaurant event in Charlotte, allowed people to purchase a $25 coupon that could be redeemed for $50 at any participating restaurant.”
Car Care Front and Center
Automotive maintenance and repair services build on the legendary mainstay of AAA—roadside assistance.
“We receive 2.4 million telephone calls in our call center each year,” says Holcomb, who first came to AAA Carolinas in 2000 from banking to lead the transfer of the call center from Charlotte to Roanoke Rapids. “We dispatch tow trucks to service over 850,000 members each year.
“By including automotive repair in our product offering, we can offer more solutions to members whose cars have broken down,” says Holcomb. “We can tow the disabled vehicle to one of our Car Care Centers and offer a total solution to their automotive problem.”
Another reason Car Care Centers are growing is that demand is up. Consumers in today’s economy are trying to save money and hold down expenses, which means keeping their cars longer. At the same time, consumers are buying more cars to better accommodate busy lifestyles. Families may purchase a car for each member old enough to drive; many homes have three or four cars in the driveway.
Beth Simms, a AAA Carolinas member in Mt. Pleasant, S.C., recently took her car in for a maintenance check at a AAA Car Care Center nearby.
“I get my 3,000 mile maintenance and oil change service through the Car Care Centers,” says Simms. “I also recently had my brakes replaced as well as my timing belt which became defective due to an antifreeze leak.
“The technicians were helpful and informative throughout the process,” she says. “As a women, I know that matters of the car are things we normally shy away from, but the techs went so far as to draw diagrams to explain what had gone wrong, and they took me out in the garage to show me how they would fix it.”
Building a Lifetime Relationship
“The increased demand for car care services goes along with our mission statement to offer members value, safety and total peace of mind in all things automotive, travel and insurance,” says Holcomb. “It really resonates with our customers.
“We carried the AAA brand to our Car Care Centers,” says Holcomb. “Our motto is: One Time, On Time, Courteous, Honest Service. Customer service distinguishes our Car Care Centers. We don’t manufacture or sell auto parts; what we offer is world-class service.”
In general, says Steven Knooihuizen, Car Care Center regional manager, customers should bring their vehicles in for maintenance/service checks every 3,000 miles or at a minimum two or three times a year. All car brands are serviced at Car Care Centers, he says, so a family can bring three or four different cars to the same place.
“One of the things done differently at Car Care Centers,” says Knooihuizen, “is that we follow the car manufacturer’s recommended service intervals for the vehicle instead of making our own maintenance/service check-off sheet to fit all vehicles.”
“Our goal is to help customers make their cars last longer. If vehicles are serviced according to the manufacturer’s designated guidelines, there’s no reason a car can’t last to 200,000 miles and beyond,” says Holcomb. “We offer a special program to get it there: ‘On Your Way to 200K’, a one-year preventive service package.”
When it is time to replace a vehicle AAA also offers its members and customers an Auto Sales service designed to seek below-market prices for new and used cars. “AAA’s consumer specialists can find specific vehicles and sales are often completed over the phone and the vehicle is then delivered to the home or office of the purchaser, eliminating dealership sales hassles and bureaucratic paperwork,” said Holcomb. Additionally, all pre-owned vehicles purchased through AAA come with the On Your Way to 200K package.
Most people think car maintenance means an oil change every so often, but maintenance encompasses transmission services, proper fluids and filters, and tires. At the Car Care Centers, it includes TLC, or Total Lubrication Care, a 30-point booklet that explains the condition of the vehicles, the fluid levels, and air pressure.
“We give it to our customers so they can see what’s needed, not just hear us tell them,” says Knooihuizen. It includes strip tests that chemically measure how much “life” is left in a fluid, he says, so a customer could find out if the transmission fluid is near the end of its useful life.
“We focus on maintenance,” says Knooihuizen, “because we want to keep your car on the road as long as possible. Most of our car care business, 73 percent, is maintenance-related, the remainder is repair.
“When your vehicle is properly maintained, you aren’t likely to break down on the side of the road with an overheated car or a dead battery,” he says. “And, when you’re making car payments for five to seven years—when you’re making that kind of investment—you want to be sure your vehicle lasts to 200K.”
AAA members receive a 10 percent discount on labor for automotive repairs and a 24-month, 24,000-mile warranty on all repairs—double what is offered by most dealers and auto repair shops, says Holcomb. In addition, they receive discount coupons for oil changes and specials such as brake repairs or winter or summer tune-ups.
“At the end of the day, it’s not about selling. AAA Carolinas offers world-class service and a commitment to build a lifetime relationship with our customers so they will choose to come to us when they need the services we offer,” says Parsons.