June 13, 2011
Recession lesson: Do this and survive
By: Bob Bissler
Left to right: Skeeter Lothringer, Jody Chesser and Tony Montalbano broadcast live during Montalbano Tire’s 70th anniversary celebration.
The recession is supposedly “over.” At least that’s what economists declared in June, 2009. But is it really?
Unemployment remains high (8.7% nationally, as of May, 2011, according to the U.S. Bureau of Labor Statistics). For those fortunate enough to have a job, the cost of getting to and from work rises along with soaring gas prices. And if that isn’t bad enough, all that commuting wears out tires, and the price of a new tire is rapidly approaching $100.
Price increases have dominated tire industry headlines so far this year (see Modern Tire Dealer Editor Bob Ulrich’s latest blog, As Maxwell Smart might ask, "Would you believe "4 for $400?").
All these changes affect tire dealers too. Like most good businesspersons, you adapt to market changes. One person who has adapted well to the changes of his local market is Tony Montalbano of Houston, Texas. His shop, Montalbano Tire & Auto Service, just celebrated its 70th anniversary (read the story here).
There have definitely been some bumps in the road during Montalbano Tire’s history.
“We did have two locations for 32 years; 25 of them were good,” says Montalbano. “The last seven weren’t too great and we shut (one) location down six years ago. The area it was in deteriorated. We decided to quit fighting that battle.”
The area around Montalbano’s single remaining location, near downtown Houston, had also been deteriorating.
“We’re in Houston’s First Ward and a lot of it had become run down over the years,” he explains. “It was one of the better parts of town, and then it deteriorated. A lot of our business had been commercial business as far as truck tires.”
But over the years, Montalbano’s commercial business began to dry up. It turns out that as gasoline prices got higher and higher, more people wanted to live near their downtown jobs. And Montalbano stayed on top of that changing local market.
“A lot of the commercial accounts that we had in our area got bought out because property had gotten so valuable,” says Montalbano. “We really had to change our focus of who our major customers are. For so long, our commercial business was first and retail was secondary. It has now flip-flopped. Now, our retail business is primary and our commercial business is secondary.”
Where once there were dozens of commercial facilities, now there are apartment buildings, townhouses and condominiums full of people who need tires. But Montalbano doesn’t just sit back and wait for them to come to him.
“Our commercial man goes out to these apartment complexes and we get on their preferred vendor lists and offer special discounts to them,” he explains. “That has really been an excellent program for us through the management companies for these various apartments. One just called and said they’re getting ready to buy another property and they asked if we would be a preferred vendor for that one too.”
So as Montalbano Tire & Auto Service begins its 71st year, the lesson is obvious. Stay in business by keeping up with market changes. And, don’t sit back and wait for customers. Be proactive, and get the customers to come to you.
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