KELLY JOHNSON / STAFF WRITER
  Customer loyalty programs are nothing new to the repair shops at new-car dealerships.
   Dealers routinely send reminders to customers that it's time to come in for a tire rotation or tuneup. Or dealers can hire a "customer relationship management company" to handle the task for them.
   Independent repair shop owners, on the other hand, aren't as likely to find the time after turning wrenches all day to send a friendly note to their customers. Their choices for companies to help them are more limited, and some companies offer only part of the overall package that these independent repair shops really need.
   That's how the marketplace is viewed by CustomerLink Systems Inc., a Roseville startup that was launched last month by three graduates of California State University Sacramento. The business will serve auto repair shops initially, but expects to expand later to other service-oriented industries.
   Although CustomerLink, which employs 23 workers on Roseville's Douglas Boulevard, is just getting started, it already has two key alliances and commitments from 40 repair shops:
   •Alldata, the Elk Grove-based division of auto parts retailer AutoZone Inc. that sells automotive diagnostic and repair software to auto and truck garages, has a strategic alliance with CustomerLink. Alldata's sales reps will help sell CustomerLink's service.
   •Last month CustomerLink
also gained the endorsement of
the independent repair shops'
trade association, the Automo-
tive Services Councils of California. It will help promote the product.

How it works: CustomerLink uses a proprietary database marketing system to allow repair shops to communicate with customers with ongoing reminders for service, thank-you letters, surveys and promotional materials.
   After getting the necessary logos and owner signature stamp, CustomerLink handles all the communications — whether by mail, e-mail, fax, phone or wireless device. For example, within 48 hours of bringing in a vehicle, a vehicle owner would receive a postcard, phone call or e-mail thanking the customer for the visit.
   Working with Alldata's many maintenance records for various

Startup Links Car Repair Shops and Customers

CustomerLink Systems Inc.
The Business: A provider of customer relationship management and e-marketing solutions to small and midsized businessess in service industries, with an initial focus on independent auto repair shops.

Staff: 23 employees in Roseville, with plans to employ 35 to 40 by year's end.

Startup funding: At the end of August, the company closed it's initial round of financing with $2 million from three large venture-capital firms and angel investors. Secon round begins today for $8 million to $12 million.

President and CEO: Kirk Olson, 33 president and CEO, B.S. in Business administration, formerly in sales and publicly traded Internet startup MindArrow Systems and at International Business Systems, provider of supply chain software for the wholesale distribution industry;

COO: Mark Hockridge, 32, B.S. in biology, automotive restoration enthusiast whose family owns and operates a repair shop, founder of a child development center and formerly in sales at IBM;

Executive Vice President:  Anthony Romano, 31, B.S. in business administration, formerly in sales and marketing at IBM and IBS

Contact: (916) 781-4344; www.customerlink.com

makes and models, Customer-Link will know how often a par-ticular vehicle needs mechanical repairs or new parts, and can then communicate with vehicle owners accordingly, said An-thony Romano, executive vice president and one of the three founders.                 CustomerLink also will pro-vide shop owners with customer feedback and a monthly proof statement on who came into the shop as a result of the contact.
   In addition, the company educates repair shops about how best to communicate and build relationships. The information might come in the form of an industry white paper, a recom-mended book or CD, or a Web site, Romano said.
   "The shop owners are beg-ging for this kind of informa-tion," said Kirk Olson, president and chief executive officer.
   For this service, auto shops pay $249 for setup, $49 as an annual fee, and a charge of 27 cents to $1.49 per transaction, depending upon whether the contact was through e-mail, mail, phone or some other means.
   Some repair shop owners have software to help them cre-ate these mailings and such, Romano said, but usually they don't have the time to do the work after working on 15 to 20 cars a day. And it's expensive doing it on their own.
   As a result, the only time vehicle owners hear from the shop is when they drop off and pick up their vehicles.

But it's cheaper to build a brand and, thereby, increase customer loyalty, than it is to market for new customers. Con-sumers who are solicited in this fashion, he said, are "four times as likely to come back."

Competition varied: The auto-motive services industry is the most reachable yet highly frag-mented industry, Romano said. The $115 billion industry has more than 325,000 service and repair shops, with most being independently owned with sales of less than $1 million annually.
   Automotive shops handle
more than 2 million jobs per day. They spend more than $10 bil-lion annually on marketing and advertising to acquire and retain customers.
   The competition includes customer relationship manage-ment companies like Newgen Corp. of San Diego and Reynolds & Reynolds Co. in Ohio, which serve only car dealer repair shops.
   There are online companies providing customer loyalty pro-grams too, but CustomerLink believes they lack a total prod-uct. Additional competitors are newspapers, radio, yellow page

ads and value-pack coupons.
   CustomerLink figures it will also have competition for the business of independent shop owners within a year. The com-pany's plan is to penetrate the industry first and best.

A needed tool: Building lasting relationships with customers is extremely important, agreed Fred Wallace, Newgen's vice president of marketing and busi-ness development.
   The service that Customer-Link proposes is "a very good thing for those independent owners," he said. They'll appre-ciate anything that can help build customer satisfaction and loyalty.
   Wallace noted, however, that "it's only as successful as that independent operator makes it."
   Solicitation is one thing. Shop owners must treat customers properly and provide good re-pairs at reasonable prices to make the solicitation effort pay off, he said.
   "We think they've got a great idea," offered Brad Walker, executive director of Automotive Service Councils of California, a Sacramento-based trade associa-tion of 1,900 independent garage owners. It's an "excellent prod-uct at an extremely competitive price."
   To compete with car dealers' shops and mass merchandisers, independent garage owners have to get more involved with customer-retention programs, Walker said.
   Walt Samuelson, Alldata's executive vice president and chief operating officer, said he was impressed by Customer-Link's plan. He likes that the company creates a shop's data-base and handles its communi-cation.
   And he was won over by Customer Link's professional-looking correspondence materi-als and its follow-up reporting to repair shops.

Looking to the future: Custo-merLink plans to develop a sales force in Southern California in October. Later, it would set up a sales force in key regions of the country, Romano said.
   "We would expect to be a profitable company within 24 months," he said.
     Located in 5,000 square feet in Roseville, the company has a broker helping it look for a new office of 10,000 to 15,000 square feet for next year.
   Eventually, CustomerLink hopes to be acquired or, more preferably, seek an initial public offering in 18 to 24 months.