Back in the ’90s while he was in charge of marketing at Rich-mond Savings, Brent Cuth-bertson took on Canada’s big banks-firing potshots at them in the memorable “Humungous Bank” campaign.
In 2001, he moved onto Bell Mobility to kick at another giant-then Western Canada wireless market leader, Telus. Now, he’s rolling up his sleeves again for a new fight with another group of heavyweights. This time it’s the dealer networks of GM, Toyota and other huge auto makers and it’s a good bet that he’s willing to give them an ad-inspired pounding.
Cuthbertson became vice-president of marketing at Delta, B.C.-based automotive oil-change company Mr. Lube last September, lured there by Paul Healey, his old boss and president at Bell Mobility. Healey was hired as president of Mr. Lube last July with a mandate to overhaul the 30-year-old brand, turn it into a finely tuned retail operation, increase traffic to the existing 90 franchises and open new locations across the country.
Mr. Lube is by far the biggest player in the quick lube market with a 41% share, well ahead of Pennzoil at 14% and Jiffy Lube at 9% (smaller providers make up the rest), according to J.D. Power and Associates in Toronto. But the auto dealers still take the lion’s share of the oil change and basic automotive maintenance business-something Healey and Cuthbertson are determined to change.
“(Mr. Lube) needs a lot of development on the marketing front,” admits Cuthbertson. “It’s like a David and Goliath story again because we are going up against the major manufacturers and dealers, and we still have a relatively small portion of (the oil change) business in Canada.” (To help, Cuthbertson has even hired the same agency team that came up with the Humungous Bank campaign; back then Chris Staples and Ian Grais worked for PJ DDB, now they’re partners at Vancouver-based Rethink.)
“This is an exciting opportunity,” says Cuthbertson. “I don’t know if I would have imagined myself in this business, but the growth potential of where the company is at now and the mandate to grow the business from a market share perspective is pretty amazing.”
“It’s a huge market. It’s much bigger than the wireless market,” adds Healey. After all, people who want their cars in good running order should be changing the oil up to three times a year. “There is so much market opportunity out there that we don’t need to own the market, we need to just grow the market. We want to be the fastest growing provider of routine maintenance services in Canada.”
It’s a grand vision, but one with grand visionaries behind it. Healey was hired to grow the business by Jim Treliving and George Melville, the two men behind the impressive success of another B.C.-based franchise company Boston Pizza. The pair, along with Boston Pizza International CEO Mike Cordoba took a controlling interest late last spring (see “Franchise players,” p. 18).
“What we found was it was like Boston Pizza was probably about 10 years ago,” says Cordoba. “It was a great brand with a great brand following, a brand where franchisees make money and what we saw was the potential really to get involved with the group and add a team that we believe can take this brand to a new level. Our goal is to own the automotive maintenance business across Canada.”
In February, Mr. Lube held its first franchisee convention under the new management, in Bermuda. Called “Fast Forward”-because “we are looking to grow this company fast,” says Healey-it unveiled the vision and a three-year plan. “Our franchisees live the brand. They are entrepreneurs, they are passionate about what they do and they are hungry for growth,” he says.
The plan projects new outlet growth of 35% with greater concentration planned in Eastern Canada where penetration rates are not as high. Mr. Lube has an office in Mississauga, Ont. and the company’s management team and staff are split evenly between there and the head office in Delta.
To hit those targets, Mr. Lube’s biggest hurdle to clear is the common belief among car owners that their warranty requires them to visit their dealer for oil changes. “Our job is to become a little more creative and clever in delivering the story,” says Cuthbertson. “We have to do something that is going to get people thinking and talking about us as a real alternative to the traditional model.”
Rohan Lobo, senior manager of automotive research at J.D. Power agrees that many new car owners go to the dealer for oil changes because they’re worried about voiding their warranty. “If Mr. Lube can change that perception, kudos to them because that will open up a huge market for them.”
But what else can Mr. Lube offer to attract new customers? Convenience and customer service, says Lobo. “When you go to a dealership very often the service experience is so sanitized, it’s so disengaged you don’t feel like you are part of a valued customer base,” he says. “When you go to a quick lube, there’s all this customer engagement and it feels like some-body is looking after you.”
And while Mr. Lube is not the cheapest place for an oil change, Cuthbertson says that’s by design. “We are not the discount oil change provider in the category, and if that’s all that you are making your decision on then you can find cheaper alternatives,” he says. The goal is to be a “premium brand built around the service experience, our convenience, our locations, and our overall approach to the training and development.”
To help get that story out, Mr. Lube has set a marketing budget of about $10 million a year for national and regional programs and last December hired Rethink as its agency. Aside from Humungous Bank, Rethink also worked for Cuthbertson when he was at Bell, developing the “Pixel” campaign. One execution in late 2005 showed a cheetah representing Bell swallowing and then throwing back up a rabbit representing Rogers. Bell ended up in court over that ad.
Mr. Lube’s 90 yellow and blue retail locations are already highly recognizable, but less known is the slogan “Doing it right. Before your eyes.” While the colours may stay, the slogan will undoubtedly change, because research showed most people don’t care to see what happens under the hood.
Beyond that, says Cuthbertson, they’re reviewing all the Mr. Lube “touch points” right down to the coffee cups. “We are looking at everything from top to bottom to make sure everything reinforces the brand,” he says. “We feel we have external street appeal and a very strong visual identity, but the inside environment could speak more strongly to what we do.” Having inviting, clean environments, he adds, is critical if they want customers to look at Mr. Lube more as a retailer and less as a garage.
“This is one of those great opportunities, it’s virgin territory,” says Rethink’s Staples, of the dearth of quality advertising in the segment and the opportunities for his new client. “You very rarely get a category where no one has done any great work-ever.” The first creative for Mr. Lube will likely hit the streets this spring, while television, an important part of the strategy, may wait until September. And it could well be that the big car companies will come under the same scrutiny that the banks faced with Humungous Bank. When that campaign began consumers seemed fed up with the big banks, says Staples. The theory at Rethink is that car owners are feeling the same way towards auto dealers today.
The challenge, he says, is to make oil interesting. “The oil change business is one of the ultimate low interest categories-it’s just not on people’s radar. What that means is that we have to do something that really breaks through the clutter,” he says. “Nagging people isn’t going to work, we have to do something that is entertaining, and funny and a little bit outrageous.”
Healey, for one, is convinced Rethink and Mr. Lube can do it.
“Coffee used to be a low involvement category-no one ever thought you could differentiate coffee,” he says. “Coffee was always 50 cents, it was black and it was bad, but now it’s not. Now it’s an industry. So if you can make coffee exciting you can make anything exciting.”
