The human touch: Dealers explore human resources and other vital topics at ITE
If two heads are better than one, what happens when you bring 11 great minds together?
At last month's International Tire Expo in Las Vegas, conference attendees had the chance to find out when two separate panels of independent tire dealers shared ideas on a wide range of topics critical to everyday business success.
Focusing on human resource issues, the dealers also pulled no punches in tackling other problems that dealers, both large and small, face in their pursuit of profitability. The panels, moderated over two days by former Florida tire dealer Don Olson, included:
* Christie Stock, vice president of Logan, Utah-based Wholesale Tire Distributors, which operates 16 outlets;
* Jack Furrier, president of Western Tire Centers Inc., a Tucson, Ariz.-based chain with 22 stores;
* John Marshall, vice president of 24-store Grismer Tire Co. in Dayton, Ohio;
* Paul Sullivan, director of marketing for 52-outlet, Norwell, Mass.-based Sullivan Tire Co. Inc.;
* Mike Lyons, owner of three Big O Tires stores in Longmont, Frisco, and Louisville, Colo.;
* Mark Rhodes, president of Plaza Tire Service Inc., a 39-store chain based in Cape Girardeau, Miss.;
* Tom Bothe, vice president of retail operations for 42-store, Baltimore, Md.-based Mr. Tire Inc.;
* Mike McGee, president of Lakeland, Fla.-based McGee Tire Stores Inc., a 16-outlet operation;
* Pam Fitzgerald, president of six-store, Melbourne, Fla.-based Mike Gatto Inc., and one of this year's inductees into the Tire Association of North America's Tire Industry Hall of Fame;
* Randy Clark, chairman of Dunn Tire Corp., a 30-store chain based in Cheektowaga, N.Y.;
* Rich Hoffman, president of Hoffman Tire & Alignment Inc., a single-store dealership in Fayetteville, Ga.
On finding employees:
Lyons: You have to steal them.
Sullivan: Our people are the best recruitment tool we have. If they sign someone and that person stays with us for at least a year, they get a bonus.
Marshall: There's no magic to that; it's all of the above. Stealing employees, kidnapping them (laughs)... getting connected with trade schools, knowing the instructors, everything and anything. It changes every day.
Furrier: We've gotten employees through auto parts houses.
McGee: We find many of them through our own employees. We also let our vendors know we're looking. We've had very little luck with newspapers.
Hoffman: A lot of chains take a guy with no experience and put him out on his own; he can develop a lot of bad habits.
Fitzgerald: One of the biggest problems we face is the image of our auto techs as grease monkeys. We've done a disservice to young people in high school by convincing them they can't be successful without (traditional) college. Get in touch with your community colleges; most have vocational education programs. Make sure their equipment and curriculum are updated. If you work closely with them, you'll get the call on which kid is best to pick up.
Olson: If your store has a wonderful image, word spreads fast. So if the opportunity presents itself, they will want to come to you.
On keeping employees:
Lyons: Make it fun.
Rhodes: Make the goals different every so often. Each person probably has different motivations. Get a comfort level with them and their personalities and what they've proven themselves to be.
Bothe: Turnover rate is astronomical, particularly within the first 90 days. If you can structure a program to get techs through those first 90 days, you'll do as much good as you would running around trying to find (more of them).
Clark: We have a high turnover. I think that will get better as we have a higher rate of unemployment.
On training employees:
Stock: Training is always an issue. If we can get a tech one-on-one with a new hire... it gives the feeling that we really care about where they're going in their career. We also have weekly training with store managers.
Lyons: Typically, we bring our guys in from the shop. Every one of our sales guys I've brought from within, and that fosters loyalty at both the service end and the sales counter. If you bring them up from the service end, they see what you do day after day.
Rhodes: You have to get it through your head that 'We're going to do this.' It's a commitment level. You have to set up some kind of regimented schedule. We have a guy who does nothing but train every day of the week.
McGee: There are several schools in our area. We encourage our associates to become certified through ASE, which helps our image, too.
On employee benefits:
Furrier: The most critical benefit we offer is health care -- not only for employees, but for their families. The second is profit sharing; we've had a profit-sharing plan for many years.... You really have to be competitive.
Stock: We offer health insurance, 401(k), vacation. We've been doing a lot of flextime lately, where if somebody isn't a morning person they can come in later. That's really worked well for us.
Marshall: The most valued benefit is medical. We have education programs; if employees go to school and get a C, we'll pay half of it. If they get an A or a B, we'll pay all of it. Incidentally, we require employees to pay a sizable amount of their tuition up front... to make sure they have something at stake.
We also try to teach our managers to have meetings with their people and take (care of) their complaints, whatever they may be: equipment, maintenance, etc. One, you're showing interest in them. And the other thing is they see that incremental progress is being made.
On store image and improving a bad one:
Clark: We've spent $3.5 million on remodeling. If you were to walk into one of our stores, you'd think you had walked into a living room. We serve gourmet coffee, which costs customers nothing. We have a woman in the office who does decorating.
Olson: A lot of times (image) is the result of little things. Maybe it's what you do with a school or by working with an association.
McGee: Have your manager get involved in the community. It will help tremendously.
On marketing strategies:
Sullivan: When you identify the three segments of consumer (selling) -- price, brand and outlet -- we really believe we are the brand because we are the outlet. Consumers want to shop at an outlet they trust. Trust is ultimately what you're selling. We want to keep the image of a family-owned and operated business.
Rhodes: We have a newsletter on our Web site (customers) can sign up for.
Marshall: We send out coupons and give them gift certificates. We do a lot of direct mail.
Stock: We do reminder cards and get about a 30% return. We do a lot of marketing of our own private brand credit card.
Lyons: We do some odd things when it comes to marketing. For example, we went to an elementary school and asked one of the teachers if we could put a homework assignment out to the kids. The assignment was to design an ad for Big O Tires. When a child comes home with a homework assignment, mom and dad -- if not doing it -- will at least help with 50% of it, so they're in the phone book looking up what Big O is all about. By the end of the day, both mom and dad know everything there is to know about Big O. It worked great.
Hoffman: We try to position ourselves so we have a tire for everybody. In any particular size I may have four, five or six different tires. I give customers the feeling that they don't have to go anywhere else. People have less time to do more than five years ago; they don't have time to run all over town. I want to make it easy for them. One of the best gimmicks we have is a two-coupon direct mail piece (that offers) free rotation and a discounted oil change. You'd be surprised what a free rotation does to customers.
Clark: We market in four areas: Erie, Pa., and Buffalo, Rochester and Syracuse, N.Y. In two, we have a TV and radio campaign, and there was never a price in one of those ads. It worked great.
We offer free flat repairs and rotations. Forty percent of all invoices written by Dunn Tire last year were no-charge; we fixed 53,000 flats for free. It's a lot of manpower, but you know what? Those people will come back to Dunn Tire. An independent can out-market any big chain.
On major brands vs. private brands:
Furrier: You make a lot more on private brands.
Sullivan: You do make a lot more with private brands. However, dealing with the majors... they have a lot of programs that offset a lot of your costs. Just the advertising alone is a huge expense! So we take advantage of all programs the majors have.
On tires sales vs. automotive service margins:
Marshall: We've found it difficult to wear both hats (tires and service) well. We really don't direct our managers to a) sell service, or b) sell tires; it's more, "We're going to achieve a certain gross profit." One of the things we did to get into the service business was we went heavy into the tune-up market. It's a pain, but profitable if you do it right.
Lyons: Service is a wonderful gross profit item, but I choose tires because I can get more tires in and out with fewer problems and make more money. We bring people in for tires and virtually cherry pick their vehicles, doing the work we want to do.
On out-the-door pricing:
Stock: Everything we do states that we offer free mounting, balancing and tire disposal.
Furrier: We have all-inclusive pricing. We make it very clear in our ads that the price includes all services, and that is the clear distinction between ourselves and our competition.
Rhodes: We're probably one of the few people who still add-on; it's an advertising theme, a marketing point.
On monitoring service quality with multiple locations:
Clark: You need to have people closely watching what happens in those shops. You have to police them. In our shops, one guy puts tires and wheels on and tightens lug nuts; another guy has to sign off on it.
Bothe: Develop a computer code for comebacks. I get a weekly printout of which techs had comebacks on a particular job.
On matching low prices:
Clark: You can buy tires that will allow you to do that. We know price clubs have certain lines of Michelin and Goodyear-produced products; we don't carry those lines.
Bothe: We will match all of the clubs. You shouldn't be afraid of that.
On fixing "loser" stores:
Bothe: Interview every employee. You need to spend time looking at numbers and identifying what the problems are before you can attack them.
McGee: Is the manager relating well to other employees? Is there harmony within the store?
Fitzgerald: If traffic count is the problem, it's often how your guys handle the phone. If you're not good on the phone, you'll never get them in the store.
Clark: The phone is your link to the outside world. If you want to fix a losing store, the first thing you do is call it.
Hoffman: A lot of it is attitude. It's amazing how one person can destroy a lot of people in the shop. The first thing I'd do is look at the mix of people -- does it have a good flow?
Olson: I've had my share (of loser stores). Go to the store, have a meeting with the employees and the manager. Say, "Here's where we're at. We're losing money." Let them develop a plan. If they develop their own plan, they'll work a lot harder.
On general customer service:
McGee: If the customer knows you're listening, they'll keep coming back.
Fitzgerald: If you go out of your way to convert a complaint into a customer, that person will spread the word around town. People don't want to expect that you're perfect, but they want to trust you. Give them what they want so they keep coming back.
Hoffman: We're afraid to ask for what we deserve. We have something that nobody else has. People are willing to pay for experience.