Retail

Words of wisdom, secrets of success: Tire Dealers of the Year take different routes on the road to fulfilling goals

Lloyd Stoyer
Posted on November 1, 2006
Barry Steinberg of Direct Tire & Auto Service in Watertown, Mass., was MTD’s first Dealer of the Year in 1993.
Barry Steinberg of Direct Tire & Auto Service in Watertown, Mass., was MTD’s first Dealer of the Year in 1993.

We asked those chosen as Modern Tire Dealer Tire Dealers of the Year to share their words of wisdom and secrets of success for other dealers. We found they shared their wisdom willingly, but most insisted there really are no "secrets" to running a profitable and successful tire business.

These dealers' "secrets" do not involve what they have done to build a business as much as how they have done it.

The dealers honored by MTD over the last 14 years have taken many different routes to achieving their unusual successes. But it's also true that they share a number of common characteristics.

They are intelligent, innovative and energetic, but they are not totally consumed by their business. They look at the bigger picture. They are willing to forgo a quick profit -- even spend money -- to build long-term customer and community goodwill.

They are excellent judges of people, able to identify and keep good employees and willing to train them, trust them, listen to their ideas and handsomely reward their efforts. In return, however, they expect results!

Their employee turnover is extremely low.

As the related story clearly shows, the dealers are generous financially and in many other ways. They know their communities and create a business strategy that fits their market. They build a customer base that matches their style of operations.

As a group, they have demonstrated that they understand how to take advantage of opportunities. But in some instances, they have successfully overcome unexpected setbacks.

Bill Williams of Jack Williams Tire Co., MTD's most recent Tire Dealer of the Year, shared his business insight with you in our September issue. Now let's look at ways the first 13 Dealers of the Year have put their secrets to success into practice.

Barry Steinberg, our first Tire Dealer of the Year, has found many ways to build his business. His Direct Tire & Auto Service headquarters in Watertown, Mass., is in Greater Boston.

His markup on tire sales is 39% to 48%, but for this he provides his customers outstanding service. He has a fleet of loaner cars, replaces sets of premium Toyo tires purchased at the dealership for free as many times as is necessary for as long as you own the car if you get your tires aligned at least once a year.

Since his suburbanite and apartment-dwelling customers have limited storage space, Direct Tire will call customers spring and fall with an appointment to take snow tires on and off their cars and will store the tires not in use for $150 a year.

He's possibly the largest independent tire alignment specialist in the country, with seven of his dealership's 27 service bays devoted to that service. Direct Tire also concentrates on brake work with the slogan "We Fix It So It Brakes."

He used to pay an executive "headhunter" to find talented service people, but with his pay scale, bonuses, etc., it's no longer necessary. Now good people just wait for a chance to fill any vacancies that arise.

He does not pay commissions on sales to discourage any temptation to push unneeded merchandise on customers. "Sometimes," says Steinberg, "the best sale is no sale at all."

And when customers leave Direct Tire, there's a sticker on their rear view mirror asking for comments with the question, "Did we WOW you today?"

Jerry Bauer of Bauer Built Inc. based in Durand, Wis., credits good people for providing the kind of "small town" service that brings in business from word-of-mouth comments of customers.

He goes all out to find good people for his 26 locations. Bauer Built pays bonuses to employees for recommending good people, recruits through radio and print ads, the Internet, job fairs and college campus visits and Web site notices, asks suppliers for recommendations and, on occasion, even hires headhunters to fill top positions in the dealership.

It's vital, he believes, to "partner with good suppliers who know what they are doing." You should also share with these "experts" a good business plan, he says.

The strong dealer-supplier relationship applies, Bauer believes, across the board: on commercial operations, which make up about 70% of his business; wholesale supplies, which constitute 20%; and the retail business, which accounts for 10%.

Tony Troilo operates mostly in small-town markets like Brandy Station, Va., headquarters of Rosson & Troilo Motor Co.

He actually has reduced his number of stores from a high of 12 to three outlets after losing out on adding a key location he had expected to acquire.

So Troilo has concentrated his business on his remaining stores, enhanced his heavy towing business that now accounts for about 20% of sales, and opened a used car dealership to dispose of vehicles his dealership has towed that nobody else wanted or claimed.

These have helped maintain healthy profits for the company.

Troilo's heavy involvements in the small community, including service as a volunteer fireman, also produce good will and enhance business.

David Stringer's loyalty to topnotch major suppliers, Michelin North America Inc. and Bandag Inc., and others, paid off handsomely over his years of building Stringer Tire Co., headquartered in Jacksonville, Fla., into a major commercial dealership.

Stringer also was extremely loyal to his employees. He recognized his own business strengths and gave trust and support to those skilled in other areas, inspiring legendary loyalty among his employees.

But his loyalties also created a problem. For years, Michelin tires were his major line in his eight commercial outlets; three Bandag retread shops also were a key part of his business.

But when Michelin entered the retread arena, something had to give and Stringer was torn between his support of two companies with whom he had long-standing relationships.

He finally decided to retire and sold the dealership to Michelin, which folded the stores into its Tire Centers Inc. subsidiary in 2000, loyally staying on until 2001 to smooth the transition.

Walt Dealtrey took over a weak Goodyear dealership in Allentown, Pa., and built Service Tire Truck Centers into a dealership admired by customers and loved by its loyal employees.

When named MTD's Tire Dealer of the Year in 1997, his customers raved about his dealership's service and integrity, and the mayor of Bethlehem, Pa., apologized for "gushing" and called him "the epitome of what a community leader should be."

Dealtrey, who died in 2003, spent tens of thousands of dollars on employee training, went to great lengths to provide outstanding on-the-road service to truckers over a wide area, and had rules and standards to cover every aspect of the business.

From the very beginning he simply built his reputation and dealership by being the most thorough and best.

Tom Gegax's business success was almost just a means to an end. Of course, his Team Tires Plus Ltd. stores made money, but they were only one of his many interests.

A free spirit, he took the team idea seriously as "head coach," not the CEO of the dealership operating out of Burnsville, Minn. He encouraged teamwork and visionary thinking and worked with co-founder Don Gullett, who handled business details.

He rewarded employees with generous financial benefits and incentives, but he also encouraged them to live healthy lives.

He was into meditation, eschewed meat, sugar and most dairy products, exercised his body and strengthened his spirit as a student of Eastern philosophies.

When he reached a point where his 100 company stores and 50 franchises operating in 11 states were doing $200 million in annual sales, he knew there were many other "worlds" to conquer. So he sold the business.

Raynal Pearson used a far different approach at Richfield, Utah-based Pearson Tire Co. A devout Mormon, quiet-spoken Pearson started small and built his business slowly.

He inspired trust in customers, and a supplier noted a "verbal commitment is all you need in doing business with Raynal."

Pearson developed his people skills during two years as a Mormon missionary in Oregon and Washington after Air Force service during the Korean War.

Pearson grew his dealership by bringing big city efficiency to stores located mostly in small- or medium-sized towns, a tradition continued and expanded by his son, Larry, who now runs day-to-day operations. He also started an internal newsletter to better communicate with his far-flung outlets.

Les Schwab is no longer directly involved in everyday operations at Les Schwab Tire Centers, but his ideas that built the company are still very much in evidence in the 410-plus stores in the dealership now that John Britton, president of the operations division, and Dick Borgman, president of the holding company division, run everyday operations. (Former President Phil Wick is now the company's chairman, while Schwab is chairman emeritus.)

Schwab's success formula is simple. You lay out simple rules that all understand. You hire good people and expect them to work hard -- or leave. You pay them well and give them every opportunity to advance in the company.

Schwab buys tires from a variety of sources and sells them at a fair, but not low-ball, price. Whatever the brand, they are "Les Schwab tires" and come with outstanding service and the guarantee that any problems will be handled, usually for free.

Store employees dress neatly, have no pierced body parts, no mod hairdos or tattoos. They meet customers in the parking lot, where they immediately inspect their vehicles' tires and discuss any problems.

These policies were developed in small town tire stores and some doubted they would work in big cities, but Schwab dominates markets of all sizes in the Northwest.

Larry Morgan has used the whirlwind approach to building a reputation that earned him the title of Tire Dealer of the Year in 2001. He hitched his wagon to Firestone tires from the very beginning and rapidly expanded a family-owned dealership before striking out on his own by buying Don Olson Firestone in Clearwater, Fla.

With rapid-fire purchases of other dealerships, including Team Tires Plus from Tom Gegax, Morgan built a 600-outlet retail/wholesale/commercial operation in partnership with Bridgestone/Firestone.

Along the way, he has "given back" in many ways, including serving as president of the former Tire Association of North America (TANA).

He's now a minority owner of Tires Plus, which will be taken over completely by Bridgestone Firestone North America in 2008.

Morgan's formula is simple. Hire good people. Pay them well and encourage them all to share ideas. Communication is vital in an operation of that size.

Obviously, Morgan's success has been enhanced by his willingness to take calculated risks.

As he phases out of the tire dealership, Morgan has no plans to retire. He has invested in three auto dealerships, a road construction company, a carton manufacturer and a self-storage company operation.

Tom Raben has prospered working together with close-knit family members. He and his five brothers are involved in decision-making and running the dealership. Altogether, three generations of Rabens spark Raben Tire Co.'s double-digit annual growing by "doing what needs to be done" in 33 mostly small town locations in six Midwestern states.

The dealership, based in Evansville, Ind., emphasizes topnotch professional service both in retail and commercial work and in retreading.

Outlets are known for their "59 and You're Out" Tire Installation Guarantee. The stores will pay customers $1 for each minute longer than that it takes to mount a tire on their vehicle. They also guarantee the lowest prices on their tires in a 50-mile radius of the store where purchased.

John Marshall and his brother Rusty made changes in Grismer Tire Co. operations as they became more involved in the Dayton, Ohio-based business, and these have sparked growth.

They raised managers' salaries and improved pay structures. They put more emphasis on service with a goal of making service cover operating expenses while depending on tire sales to produce profits. Now service accounts for up to 64% of sales.

They believe value is more important than price in most instances and most people see tires as important and believe their price is only a small percentage of the total cost of their car.

Bob and Juanita Purcell have used the team approach in building their "well over $200 million a year" Purcell Tire & Rubber Co. business based in Potosi, Mo.

Bob looks at the big picture, concentrates on sales and expansion while his wife, Juanita, handles details and watches the bottom line.

They have prospered by hiring good people, giving them great leeway in how they operate and providing employees with a share of ownership in the business (see related story, "Tire Dealers of the Year give back").

Careful planning and timing is important in growing the business, they believe, while location of their commercial tire outlets is "not so important."

Paul Zurcher is an example of good guys finishing first. He has built Zurcher Tire Inc. on the idea of partnering with deserving workers who want to get into the tire business.

Only in the headquarters town of Monroe, Ind., does Zurcher and his family own 100% of a tire store. In more than 250 Best-One Tire and Service stores and 16 retread operations he owns varying shares of businesses that he has given promising businessmen the financial opportunity to open.

Zurcher is a much beloved mentor, but he gives his partners ample leeway in their operations. And he sets high standards for principles and honesty in dealing with customers and suppliers.

Zurcher believes trust is important in relationships, opportunities should be earned -- "not handed to someone on a platter" -- and life should be a balance of material goals and personal integrity.

'Dealerships' of the Year: then and now: Management changes, but growth and prosperity do not

The tire dealers nominated by their peers and selected as Tire Dealers of the Year have, in most cases, watched their dealerships grow and prosper. Fourteen have been so-honored since Modern Tire Dealer began the recognition in 1993.

This year's Dealer of the Year, Bill Williams of Jack Williams Tire Co. in Moosic, Pa., was featured in our September issue. Here's an update on the 13 others, specifically the progress of their dealerships since the year in which each received the honor.

1993: Barry Steinberg, Direct Tire & Auto Service, Watertown, Mass. Since 1993, the dealership has grown from one to four locations in the Greater Boston area. Daily customer traffic has tripled to about 300 per day and dealership employees are up from 36 to 86. Annual sales have increased from $6 million to nearly $15 million.

1994: Jerry Bauer, Bauer Built Inc., Durand, Wis. The dealership has grown from 22 tire centers to 26, from five retread shops to seven and from nine wholesale locations to 10. Annual sales, which then were $100 million, are expected to be about $205 million this year.

1995: Tony Troilo, Rosson & Troilo Motor Co., Brandy Station, Va. Despite consolidation from 12 tire stores to three, sales have remained strong and profits have improved.

1996: David Stringer, Stringer Tire Co., Jacksonville, Fla. When he retired in 2000 and sold out to Michelin North America Inc., Stringer was operating eight commercial outlets and three retread shops with sales of nearly $30 million a year -- up from $14 million plus when he was named Tire Dealer of the Year.

1997: Walt Dealtrey Sr., Service Tire Truck Centers, Bethlehem, Pa. Dealtrey passed away in 2003, but the dealership he founded has continued to prosper with Ron Bennett as CEO and president. It has grown from 11 branches with more than $52 million in annual sales to 23 locations with double that figure. The stores are served by three retread facilities.

1998: Tom Gegax, Team Tires Plus Ltd., Burnsville, Minn. In 2000 Gegax sold his Tires Plus stores to Larry Morgan. (Morgan sold controlling interest in the stores to Bridgestone/Firestone Inc. in 2001. The sales agreement had Morgan continuing as chairman and CEO of Morgan Tire & Auto Inc. (MTA) through 2008, when Bridgestone/Firestone would take over 100% of Morgan's tire store outlets. (Morgan relinquished his duties at MTA in 2002). At the time Gegax sold Tires Plus, he had 100 company-owned and 50 franchised outlets with annual sales of $200 million. Gegax founded Gegax Management Systems in 2000 and does consulting, speaking and writing on management. He also helps oversee the Gegax Family Foundation, which is dedicated to contributing to environmental improvement and charitable works, and is chairman of the Gramercy Fund, which has $10 million available for venture capital partnerships.

1999: Raynal Pearson, Pearson Tire Co., Richfield, Utah. Though his son, Larry, runs day-to-day operations, Raynal Pearson is still much involved in the dealership. Seven years ago, the company's six retail stores and four wholesale warehouses supplied some 300 dealers, 70 of them associate dealers, and grossed $7 million-plus. Today, sales are more than $11 million through one retail store, two retail/wholesale outlets and three wholesale warehouses that supply upwards of 400 dealers, 100 of them associate dealers.

2000: Les Schwab, Les Schwab Tire Centers, Prineville, Ore. He's 89 now and Schwab leaves the operations of the dealership to Chairman Phil Wick and others, but the dealership continues its phenomenal growth. Six years ago, the dealership's 313 outlets -- 283 company-owned -- grossed $893 million. This year 410 stores with 80 member-dealers will do $1.5 billion in sales!

2001: Larry Morgan, Tires Plus, Clearwater, Fla. Under an arrangement with Bridgestone/Firestone, Morgan had a majority interest in nearly 500 outlets five years ago with $573 million in annual sales and an agreement to gradually sell the operations to the tire manufacturer. Today, he has a minority interest in about 600 Tires Plus retail facilities and commercial/wholesale outlets grossing $1 billion! By 2008 the stores will be totally owned by Bridgestone Firestone North American Tire LLC. Morgan can stay on for up to 10 years as a consultant.

2002: Tom Raben, Raben Tire Co., Evansville, Ind. When Raben was selected for the Dealer of the Year, the dealership had 30 outlets and three retread plants. The dealership has since purchased Disney Tire and operates from 33 locations in six states. There are 30 full-service retail centers, most of whom also are commercial outlets and truck centers, three with retreading facilities. In addition, there are three wholesale distribution outlets.

2003: John Marshall, Grismer Tire Co., Dayton, Ohio. Marshall has 25 retail and commercial stores, including 13 Associate Tire Outlets plus a retread plant. In the last three years, the dealership has added a retail store.

2004: Bob and Juanita Purcell, Purcell Tire & Rubber Co., Potosi, Mo. Purcell Tire has added five locations since 2004, opened two warehouses while closing one and operates five retread plants. Annual sales have grown from about $185 million to "well over $200 million."

2005: Paul Zurcher, Zurcher Tire Inc., Monroe, Ind. The Zurcher family owns only one tire store, but Paul Zurcher partners with store operators of more than 250 Best-One Tire & Service outlets in 14 states. Zurcher's partnership in 16 retread plants makes the Best-One Group one of America's largest retreaders.

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