It's All About Service for 2018 Tire Dealer of the Year John Quirk
At the end of 2012, John Quirk made a deal that would forever change his business. It cost him 500 employees, including the 56 people who managed his retail stores in Maine, Massachusetts and New Hampshire. Those 50-plus individuals just so happened to be his best salespeople.
And he gave up the keys to every one of his stores. In a single day, sales fell 20%. And they continued to fall. It took 18 months to break even. It wasn’t pretty.
“It was the best thing that ever happened to us,” says Quirk, chairman and CEO of VIP Inc., dba VIP Tires & Service.
What caused this cataclysmic shift? Quirk sold VIP’s auto parts business and welcomed the nation’s third largest parts retailer as a tenant into his tire stores.
And all of this turmoil came only a year after VIP sold off its commercial tire division, which had been the backbone of the business his grandfather and father built.
It resulted in a transformation of the nation’s 17th largest independent tire dealer into a laser-focused retail leader.
Not quite six years after turning his business upside down, Quirk is Modern Tire Dealer’s 2018 Tire Dealer of the Year.
The OTR business
It all began in 1926 when Quirk’s grandfather, Edward Quirk Sr., opened Quirk Tires and Service Corp. on Arsenal Street in Watertown, Mass. Twenty nine years later the second generation, Edward Quirk Jr., took over. He was 26 years old in 1955, and sold both passenger and commercial tires. Three years later his fourth child John was born.
Quirk and his siblings all grew up working in a family business, though his sister did get a pass from tires and worked with their mother at a public golf course the family owned. Quirk says his dad bought the course as a real estate investment, but it included a busy banquet business. His sister and mother became masters of flipping a room for as many as six weddings a weekend.
Unofficially, Quirk’s first job at Quirk Tires was sweeper. Then one summer when he was about 15, Edward Quirk told his son, “You’re not staying home this summer.” He learned how to change truck tires and swing a sledge hammer. He admits he was a grunt, but the work also was good exercise for his life as a hockey player.
Quirk Tires was heavily focused on the commercial tire segment, with giant off-the-road tires representing about 70% of the company’s business. Much of that OTR business came from road construction projects throughout the Northeast, as Quirk Tires counted about 100 sand and gravel quarries as customers. In particularly busy seasons, the company might service 150 of those rock crushing quarries where aggregate is made for road surfaces. Each quarry could have a dozen dump trucks on site.
“The bigger the tire the better it was for Quirk Tires,” says Quirk. “We had many multi-generational giant tire technicians working for us, even one three-generation. They were pros. They were also very expensive.”
The OTR tire installers were members of a union, and Quirk says it was difficult to manage the seasonality of those employees’ work. At that time the cold winter weather forced the quarries to close for the winter.
“In January, February and March we’d lose money every year because the plants would all close. We didn’t want to lose these guys because they were so technically advanced, and training someone to do that job safely is intensive. It takes years and years.” It was Quirk Tires’ business model to have inventory “on the ground” for its commercial customers, including those in the OTR tire market.
”Back then we didn’t have cell phones, but they had my beeper number. When a piece of equipment would go down, they would call me day or night, and our business was to say yes. They knew we had the product in stock.”
In the offseason Quirk Tires surveyed its customers’ equipment and told owners what tires needed replaced. The better operators followed those recommendations to minimize downtime. But plenty of others didn’t, and the service calls that followed were money makers.
“The bigger the fire the better for us when it came to equipment going down,” Quirk says. “You knew when you called, our guys were going to show up and know what the hell they were doing, and they were going to get the machine going quickly.”
He still remembers losing a sale on a set of four 45/65-45 tires. They were $10,000 a piece, and a new purchasing agent decided to buy them from another tire dealer because the invoice was $1,800 less.
Two weeks later the tires were delivered on the back of a tractor trailer rig and neither the tire dealer nor the customer had a way to unload them. The purchasing agent called Quirk and asked if he’d do it. He said no. He told the purchasing agent what he should do is refuse the shipment, buy the tires from Quirk, and his team would come the next day — because they had the tires in stock — and would install them. “His equipment superintendent convinced him it was the right thing, and we got the order.
“You have to look at the big picture. It’s such a service-intensive business and you have to draw the line in the sand to say ‘if you want top notch service you have to pay for it.’ It’s not like we were getting filthy rich. We were investing in the business and in the inventory.”
A single crane truck would cost $150,000, and during busy road construction season, it wasn’t uncommon for Quirk Tires to have a dozen of them out on job sites.
With expertise and inventory, Quirk Tires sold itself as a one-stop solution provider. If customers didn’t want their all-encompassing service and chose to shop for tires based on price alone, Quirk Tires wanted to compete for that business, too. “But 99% of customers didn’t want to invest in the infrastructure or the training. They relied on our training.”
It revolves around tires and service, but Quirk says, “We’re in the relationship business.” The better the relationship with a business owner or management team, the better it is for business.
“They knew if they called Quirk, their problem would go away. Granted, they were going to get a bill for it, but they knew they could trust what we said, and our recommendations were based on a lot of industry experience. In the long run we were able to reduce those quarry operations’ costs substantially by looking at a total lifecycle of a tire over the long haul.” They taught their OTR tire customers not to buy the cheapest tire, and instead purchase a premium product to lower the overall cost per hour. With its tire management system Quirk Tires showed customers how they would experience less down time and that their machines would use less fuel with better tires.
The development of tires for specific applications was another game changer. Quirk remembers watching equipment at a transfer station in Maine burn through tires — literally. The grime on the garbage was slippery, and the equipment was smoking as the tires were slipping.
“I went to the guy and said I can cut your cost by 25%, and I’ll put that in writing.” At the time, the operator was only getting three months of use from a set of tires on a loader. “We were able to cut their costs by 70% on an annual basis, although the upfront investment was more than double what they were originally procuring. It was because they were running the wrong tires.”
Talking about these customers, Quirk’s love of the commercial business, and his particular passion for the OTR industry, is palpable. Yet, he’s running a retail-centric business in 2018.
Over the years there were the typical ups and downs of business, but there are a few moments that stand out to Quirk, including a 1970 moratorium on new highway construction from Massachusetts Gov. Francis Sargent. “Our business changed a lot when that happened.”
In 2012 Quirk sold the company’s commercial tire division to Pete’s Tire Barns Inc. The sale included what had been the Quirk family’s second location and commercial hub, in Westborough, Mass.
“The board tried to get me to do this a lot sooner than I did and focus 100% on the retail business, feeling that my resources personally were being stretched and thinking you’re better off focusing on one discipline. And in the end, they were right.”
An acquisition changes everything
By the 1980s there was a drop in construction activity throughout New England, and the Quirk family was relying more on its retail business. They could see how the principles of their commercial relationships would work in retail: Gather your facts. Understand the equipment better than the owner does. And then respond with a sound recommendation to help the customer. By 2001 Quirk had more than 15 years under his belt leading his family’s two-store tire business, and he was looking to make a big move. He satisfied that itch and bought VIP Discount Auto Center, another independent, family business that sold tires and auto parts from 48 stores.
VIP was geared toward the discount business. Its monthly promotion fliers heralded low prices on tires, and that message was visible on its stores, too. Quirk says every location had a “4 tires for $88” sign on display. He waited six months before taking them all down.
But he didn’t wait that long to make another change. In his first meeting with employees he said effective immediately every manager in the company had complete authority to handle any customer complaint — regardless of the cost. He says he’ll never forget the look on the face of his chief financial officer, Allan Kirkland.
Afterwards Kirkland asked what he was thinking, and warned it would cost him a fortune. But Quirk wasn’t worried about that. “If they don’t have the basic sense of what is right and wrong for the customer, they shouldn’t be a manager.” He knew he’d be leading a culture change at VIP.
That started with a name change to VIP Parts, Tires & Service and a move away from the discount model. Because VIP was the larger and better known entity, Quirk Tire locations also took on the new VIP name.
Quirk remembers his dad asking him if he knew what he was doing. “I think so” probably wasn’t the most reassuring response, he says. But Quirk’s father had grown up listening to his dad’s stories about surviving the Great Depression, and Quirk knows that influenced him. The elder Quirk was financially conservative and “made sure he could weather any storm. He had that rainy day fund because he knew that times could change. He was not the biggest risk taker.”
A new focus on service
Quirk saw an opportunity at VIP to make automotive service a much bigger focus. Parts sales drove the business and combined, tires and service only accounted for 35% of sales. In 2018 the mix is closer to 60% service and 40% tires.
“Our goal is to get to 70-30. We call that weatherproofing our business,” Quirk says. “We have a big seasonality factor here, especially in northern New England.”
The first burst of that seasonality is good. When the snow flies, business explodes. “We’re open as late as we can, and we’re challenging our crews to work all kinds of overtime. We don’t bring in part-time help because that goes against our mission of delivering an exceptional experience. “For about an eight-week period it’s all hands on deck. And then after that, our business drops like a rock. From the middle of January to the middle of March is our slow period, but stores that have a really strong mechanical team, generally their revenue only dips 10% during that period.”
Tire sales plummet 40%, but Quirk says revenue from the mechanical line is pretty stable year round. So that’s why VIP markets itself as “Northern New England’s leader for all things automotive.” It’s also why he stresses to employees the need to conduct a thorough inspection of every vehicle.
Quirk thinks of it as getting the DNA off the car. “You go to the doctor and they check your blood pressure. They check your weight. They check your cholesterol. Why would you want to talk to a customer if you didn’t know all the vital signs off the car?” There are basics, such as the tires, oil, filters and fluids. “When you get that information off the car, you can talk intelligently with the customer and help them with a plan over the long haul.
“It’s not about getting every last dollar out of the customer that day. It’s about building a relationship with them.”
An essential part of that relationship at VIP is taking the customer to the vehicle — in the bay.
“Our goal is to get every customer in front of the technician. Let them meet at the car. Let the technician show what they see and go over the health check with the customer underneath the vehicle and show them why this needs attention,” Quirk says, noting that customers go into the shop even when their vehicle doesn’t need an additional service. “You’d be amazed how many letters and emails we get from customers that have never been under their car before. I’d say 95% of our customers have never been under a car.
“Most shops say due to insurance regulations customers are not allowed in the shop. We had to battle with our insurance company because we told them transparency is the most critical element of our business. We have to be transparent with ourselves as a team and we have to be transparent with each and every customer. That’s how we’re going to build a customer base.”
In 2017 VIP served 312,699 customers, up 2.3% from 2016. In the last 12 months VIP rang up $70 million in sales.
Transparency also means VIP has installed large glass windows in their waiting areas so customers can watch what’s happening in the bays. Only a few of the 57 stores don’t have a layout that allows for the glass.
“The bigger the glass wall the better,” Quirk says. “We say technicians are the crown jewels of our company, and we’ve got nothing to hide out there.”
The parts business
The VIP brand long has been tied to the parts business. When Tom Auger Sr. founded the company in 1958, he sold and installed tires under the name L&A Tire Co. Over time, however, the “old man” as he called himself began spending a lot of money on parts. Quirk says the Lewiston, Maine, native went to an auction of a local parts business that filed for bankruptcy. He cut a deal with the auctioneer to buy the whole lot, and over the course of the next year sold every part at a weekly flea market. He eventually changed the name of his business to VIP Discount Auto Center. By 2001 VIP had grown to 48 stores with tires and parts.
When Quirk Tires acquired VIP that year — a couple weeks after the Sept. 11 attacks — VIP was catering to the do-it-yourself mechanic. Parts accounted for 65% of VIP’s revenue.
But the heyday of VIP’s parts business came before the surge in parts proliferation. The business stocked 23,000 skus, and nine times out of 10 had the part a customer wanted. But just like tires, the auto parts business is no longer a one-size-fits-all industry.
The biggest players have gobbled up a large share of the market, and their scale gives them another big advantage. “We estimated a 20 to 25% cost advantage just procuring the parts,” says Quirk.
It was clear to Quirk, and the board of directors at VIP, that the company needed to get out of the parts business. He says VIP stores were carrying about $150,000 in parts inventory in each store. O’Reilly Automotive Inc., dba O’Reilly Auto Parts, averages four times that amount. “And the more parts you have in store, the more money you generate.
“We knew the writing was on the wall. We were going to have to get out of the parts business, or I was going to have to take on an equity sponsor and give up a lot of ownership of the company.” According to data from an O’Reilly Auto Parts analyst presentation in August, the three largest national chains (AutoZone Inc., Advance Auto Parts and O’Reilly) operate 15,862 stores in the U.S., or 43% of the total parts stores in the country. So Quirk invited eight parts companies to meetings to hear his pitch. In the back of his mind he considered O’Reilly his best opportunity: The auto parts retailer had stores in 39 states, but hadn’t yet entered the Northeast.
“We were fortunate we were able to get a deal. We were able to get out of the parts business without getting killed. We made a little money and partnered with O’Reilly.”
But this was no ordinary acquisition. O’Reilly is a tenant in Quirk’s VIP Tires & Service stores. The stores are co-branded as VIP and O’Reilly. There is only one customer entrance. There is no demising wall to separate the parts store from VIP’s space.
It’s an unusual concept that Quirk admits was a stumbling block to sealing a deal with some of the other parts companies. But he had estimated it would cost $250,000 at each of the 56 stores to build a wall and create a separate entrance.
Two weeks after his presentation to O’Reilly officials, the company’s then-co-presidents, Greg Henslee and Ted Wise, called and asked for a meeting. They were in Auburn, Maine, and said they had just completed visits to every VIP store. They agreed to pay Quirk’s asking price for VIP’s auto parts operation, but had two requests.
They also wanted all 56 of VIP’s general managers, and the keys to every store. The deal was effective Dec. 31, 2012, and VIP dropped the word “parts” from its name.
Big bumps in the road
The whole time Quirk was working on pitches to sell the parts business, there was only one other VIP employee in the loop on what was happening. Kirkland, the chief financial officer, had been with VIP since 1988.
After Quirk shook hands with Henslee and Wise from O’Reilly, he called into his office Winkeler, who at the time was vice president of merchandising for VIP, and Gary MacCausland, vice president of operations. MacCausland, who has 30 years of experience in the tire industry, including about 20 years with Sears Holdings Corp., reacted with a single question: “I get to keep our store managers, right?” MacCausland knew those managers were critical to keeping the VIP ship sailing through the transition. But the negotiations included transferring VIP’s retail employees to O’Reilly’s side of the business, and every store manager was classified as retail. It was a detail — and a big one — that got by Quirk in the negotiations. But Kirkland says his boss wasn’t going to cherry pick employees to try to cover for his mistake. Kirkland says, “John put his word out there.”
In all, half of the company’s 1,000 employees would begin 2013 on the O’Reilly payroll. (None of the employees in the service bays were affected.)
MacCausland knew he needed to hire 75 people to keep the stores open. The store managers were VIP’s top salespeople. They filled in for service managers on their days off, and they also handled everything from hiring and firing employees to inventory management and training.
Service managers and service writers were thrust into these leadership positions. In a handful of stores, Quirk says those service leaders wielded control, increased sales and succeeded. “But 90% of them within a month, six weeks or eight weeks were waving the flag: ‘I didn’t sign up to be the manager. I don’t want this job.’”
The transition continued through the first three months of 2013. During that time every employee in the stores wore VIP black work shirts. O’Reilly hadn’t yet installed its own point-of-sale (POS) system, so Kirkland managed and balanced two sets of books. Parts sold at the retail counter were O’Reilly sales. Parts sold as part of a work order were credited to VIP. In that period, sales were basically flat, up 1% one month and down 1% another month.
Then on March 18, 2013, O’Reilly’s POS system was ready. The parts employees wore green O’Reilly shirts to work. VIP’s sales dropped 20% that day. “And it was 20% the next day, and the next day. It was a bad week. A bad week turned into a bad month, which turned into a bad quarter,” Quirk says. “The effect of letting my managers go to O’Reilly really sunk in at that point. Our best salespeople don’t work for me anymore, and I’m wondering why sales are down.
“And you have managers, and some of them don’t really want the job. They’ve never been trained on being a leader. Today we laugh about it, because it was the best thing that ever happened to us, although it took us almost a year and a half to get back to break even. Since then, we’ve been improving every month.”
And, there was another benefit on the company’s ledger sheet. “The one great thing about selling the parts business to O’Reilly is we have no operating debt. We have some real estate debt, mortgages on the stores, but that’s in a separate company. VIP’s balance sheet is extremely clean.”
A new way to hire
Losing all of the company’s store managers forced VIP to hire rapidly. There were people with sales experience who knew nothing about cars or tires. There were others who performed well in the interview process or checked off certain boxes on their resumes. They were viable job candidates, but VIP had no strategy to pick the best workers.
“It forced us to examine the characteristics of an individual who is going to be an excellent leader in a tire and service operation,” Quirk says.
VIP redefined its job descriptions and started using a predictive index tool to help understand what motivates an individual to perform and be productive. The company also started drug testing candidates, and conducted both state and federal background checks. “We got much more disciplined in the hiring process.”
Winkeler, who in 2017 was promoted to president and chief operating officer, says it all begins with the right manager in each store. The company’s top managers have three critical skills:
- They genuinely care about their employees.
- They know cars.
- They are customer service advocates.
“When a leader has those three attributes, people typically want to work for them,” Winkeler says. “They don’t have turnover and keep a stable staff. They attract really good people, and their people aren’t the kind who are punching in and punching out. They enjoy coming to work, enjoy what they’re doing at work and they’ll go the extra mile for the customer.
“For us, that’s the secret sauce, except it’s not a secret. You can open up a shop tomorrow and not have any of the whiz bang tools, but you have a leader who genuinely cares about their people, who gets the customer service piece and who is an expert in their field, and surrounds themselves with good technicians, and they’re going to have a successful business.”
Winkeler admits not every single salesperson working at a VIP front counter is a car expert. But those employees have learned how to leverage the expertise of their technicians to answer consumer questions and convey accurate information to customers.
VIP’s “5-for-5 customer engagement process” also helps fills in the knowledge gaps. The company outlined a perfect customer visit in 30-plus detailed steps, then grouped and defined those steps into a five-step action plan that begins when a customer walks in the door and ends when the customer meets the technician under the car for an overview of how things look.
“We strongly believe that when we get a customer into the shop to meet the technician and see their car, it makes their visit memorable,” Winkeler says. “And ultimately how you get them to come back is they’re thinking, ‘That was really cool.’ When you don’t make the visit memorable, it’s amazing how many customers just confuse us with our competitors.”
VIP believes the 5-for-5 process is so important it has created a 40-page guidebook and three-hour training program on it. The training is part of the onboarding process for all new employees. The company also created a training video to capture every detail in every step.
The ripple effects of the O’Reilly sale
Selling the parts business to O’Reilly meant Quirk had to decide how he planned to replenish tire inventories in his stores. VIP had a 110,000-square-foot warehouse in Lewiston, Maine, that had housed both auto parts and tires. When a store sold a set of tires from its racks, the warehouse pulled another set and delivered it the next day. Parts were replenished the same way. A 53-foot tractor trailer rig typically was loaded and rolling down the highway with parts and tires for seven to 10 stores.
“When we sold the parts business we realized we don’t need those big trucks anymore. We outsourced our tire logistics to Max Finkelstein Inc.” VIP still buys its own tires, and even has an employee stationed in the Finkelstein warehouse. Chuck Sarchi, VIP’s warehouse manager, has been with the company for 35 years.
When VIP buys a trailer load of tires from TBC Corp., the tires are delivered to the Finkelstein warehouse. “We pay them to unload it and put it away, and we pay them to ship it to our stores when we want it there,” Quirk says.
“Finkelstein does a great job at moving tires. They’ve been doing it for almost 100 years. And it got us to focus on the most important thing in our business, which is our people and our customer engagement process.”
About a third of VIP’s stores get daily deliveries from Finkelstein. A few remote locations only get deliveries three times a week. The vast majority of stores receive shipments every other day. VIP was already a Finkelstein customer before this, but “nowhere near what we’re buying today,” Quirk says.
When a VIP store needs a tire but doesn’t have a delivery scheduled the next day, there are still options. Rather than picking a tire from VIP’s own stock in the Finkelstein warehouse, a store can purchase a tire from Finkelstein’s shelves and get next-day delivery. “If you’re in a jam they’re going to do what they can to help you. And if one of our stores is in trouble, they just call Chuck and Chuck will make the problem go away.
“We were able to save money, we’re getting better service, we’re turning our inventory quicker, and most importantly we can focus on the customer, which is the most important thing,” Quirk says. “I can’t remember the last time I worried about whether a tire is going to get to a store or not, which is really nice.”
And Finkelstein delivers more than tires. The wholesaler’s drivers ferry everything from internal mail and in-store displays to paychecks to VIP’s stores.
Kirkland, the CFO, says the Finkelstein agreement also eliminated risks for VIP. Its workman’s compensation burden has been lowered. The company no longer has truck drivers on the road. There are no equipment breakdowns to worry about or deliveries to schedule. “The business model becomes simpler.” The key is that VIP’s POS system has to communicate with Finkelstein’s computers so the right tires are picked from the warehouse.
VIP is in the midst of discussions with a vendor to update its POS system. Kirkland calls the existing system “clunky but functional.” It was built internally with pieces added onto the framework over the years. The company, which has two full-time programmers on staff, is looking at a modern, all-in-one system for the future.
With Finkelstein taking care of tire distribution, Quirk officially had an empty warehouse on his hands. He’s leased it to a Maine institution — L.L. Bean Inc. — and the company is building its iconic boots in the space. L.L. Bean signed a 20-year lease. “We were very fortunate to get that deal done,” Quirk says. Kirkland sees the lease as “another great opportunity for the stability of the (VIP) business.”
Talking to technicians
The close of the O’Reilly deal finally gave VIP a singular focus: its retail operation. Winkeler says he and Quirk realized the business regularly focused its attention only on certain groups of employees. There were meetings with managers and discussions with the teams working at the sales counter.
However, two-thirds of the company’s employees were technicians, but other than asking them about what they were working on when they walked through the shop, VIP wasn’t communicating with them. “What do they think of the business? What do they think we should do to be a better company?” Quirk proposed meeting with every technician in the company.
First, VIP created a list of 20-plus questions for the technicians. Winkeler says it amounted to an employee satisfaction survey.
- How satisfied are you as an employee?
- How satisfied are you with training?
- How satisfied are you with communication?
- How satisfied are you with your manager and leadership?
- What do you think we could do to improve teamwork?
The company gathered the results in January 2014 and then Quirk, Winkeler and MacCausland went on a road trip. For three straight weeks they met with technicians, eight to 10 of them at a time, in hotel meeting rooms. They covered the results of the survey and talked about the most frequently cited issues. “And we were taking notes. We took pages and pages of notes,” Winkeler says. “We had lots of conversations of what we should and could do to make VIP better.” One of the biggest things to come from those meetings is VIP’s policy on training. During one session Quirk challenged one of his most experienced technicians and asked why he didn’t have any Automotive Service Excellence (ASE) certifications, noting the company would reimburse him for the cost of the test if he passed it. The technician pushed back. “What’s in it for me?” Then another technician chimed in and said he doesn’t take the ASE tests because he doesn’t have the money to pay for the tests. He was living paycheck to paycheck, and said there was no guarantee he’d earn a raise for passing the test. Another employee said he couldn’t afford the $80 study guides.
“We ended up taking all of those barriers down,” Winkeler says.
VIP appointed an employee, Mary Daigle, to be its ASE coordinator. The company now pays upfront for every study guide and every test. There’s no limit to how many times a technician can retake a test to pass it. And, perhaps most importantly, VIP created a pathway for technicians to earn raises.
There are two paths, actually, and both are laid out in seven steps. There’s one for automotive technicians, from the entry level installation technician to the master ASE-certified technician. There’s another outline for service advisors to work their way up to the store leadership role of service manager. On both tracks every step is defined by earning certifications, whether it’s from ASE, the Tire Industry Association (TIA) or even a state inspection license.
The “what’s in it for me” employee is a master ASE technician. “We now have 50-something master technicians in the company, which we couldn’t have dreamed of a couple years ago,” says Winkeler.
Three of those master technicians have gone even farther and earned world class status with ASE. In August Tom Wheeler earned the elite ranking; his fellow VIP colleagues Kenny Bridges and Brian Thibodeau achieved it in 2017. VIP used to spend $3,500 a year to reimburse employees for ASE certifications. In 2017 the company spent more than $60,000. Employees have earned more than 1,000 ASE certifications, and ASE patches are sewn onto their uniforms. The company believes that when it focuses on educating its employees, those workers are better able to educate customers about their vehicles. That, in turn, helps VIP achieve its mission: “to earn an automotive customer for life.”
Last year VIP also made a commitment to focus on TIA training. One of its district managers, Gerry Kostro, is a certified automotive tire service advanced instructor and he’s trained 12 other VIP employees, including Quirk, to be certified instructors. In October 2017 the company trained and certified more than 250 employees for Basic Automotive Tire Service (BATS), and by the end of 2018 the company expects all 450 of its employees to have completed BATS as well as TIA’s Advanced Tire Pressure Monitoring Systems certification.
Long term, VIP wants to have a TIA-certified instructor on staff at each store. Plus, Quirk wants to have a master ASE technician in every store for every shift. VIP stores are open seven days a week, which means it will take 100 of those top-notch technicians to make that dream a reality. “We’re still probably two years away from getting to 100 master techs.”
The employee survey
It was clear to VIP leaders the employee survey and follow-up meetings were an essential tool that would help the business. The next year, it was expanded to every employee in the company. This year VIP completed its fifth survey and meeting tour.
Each year the survey and employee meetings have served as a guide and playbook for what the company needs to tackle next. In the first year there was a lot of finger pointing, with service advisors complaining about things they thought technicians should be doing, and technicians talking about what service advisors should be handling. A technician told Quirk and Winkeler they should create a company-wide guideline. It was the birth of VIP’s 5-for-5 customer engagement process. On this year’s survey, VIP has already addressed the two issues employees gave the lowest scores: the company’s sick leave policy and its retirement plan benefit.
As of Sept. 1, 2018, the start of the company’s new fiscal year, VIP’s hourly employees have two sick days to use. They previously didn’t have any paid sick days.
Winkeler says when the survey results were calculated, and these two items were ranked the lowest, the executive team calculated the costs of making improvements. Each sick day will cost VIP $45,000.
The company offers employees a 401k retirement savings program, but hasn’t offered a company match for a number of years. This month, the match returns, but it’s small. VIP will match 50% of the first 2% an employee contributes to the 401k. Winkeler says the company expects more employees will join the 401k to take advantage of the match, and that it will cost the company $250,000 in the first year.
But because the company knew those were the issues most important to employees, they were able to estimate the costs and share them during their February meetings. It also gave them a chance to connect the dots between an employee’s contribution at work to those added benefits.
“That’s when we go back to talking about the processes in store that we want to be focused on,” Winkeler says. “Let’s talk about checking fluids and talking to customers about preventive maintenance, or why inspections are so important. When you process a customer in and out quickly and don’t do the inspection, that customer spends $40 with us. They might have bad brakes or wheels out of alignment.
“All of those services are the right thing for the customer, but they’re relying on you to help them understand their car. When you complete the inspection process, the financials of the business flourish, and when the business financials flourish we can spend money on benefits.”
Winkeler says employees got it. They told officials not to upgrade the benefit program all at once, and instead make incremental improvements. The survey also provides a glimpse of what VIP is doing right. Here’s the statement that employees gave the highest score: “I am willing to give extra effort to help VIP succeed.”
Winkeler and Quirk believe that’s a testament to the culture VIP is working to establish.
“The goal is to be the best tire and service provider in the country,” Quirk says. So they looked at some of the nation’s top tire dealers, including Discount Tire Co. and Les Schwab Tire Centers Inc., and tried to learn from them. “The companies doing the best were the ones that had the least amount of turnover and they promoted from within.”
Winkeler says, “John believes our managers’ number one priority is career development, and helping their team.” That’s why the creation of the seven career steps programs and other training modules is so important. Those tools help managers train and develop employees. As workers realize there’s a path to move up the ladder, learn new skills and make more money, they become more committed to the organization.
“If you’re looking for a career-minded individual, they’re looking for an organization that’s going to invest in them and that’s what we’re trying to do.”
Supporting its communities
VIP invests in more than its people. It also supports causes in the communities where it does business and where its employees live.
VIP’s biggest project is an annual fundraising drive for the Make-A-Wish Foundation. During November and December, the company’s busiest months, VIP solicits donations from its customers at the counter. Then, whatever customers donate, Quirk matches.
In the last 10 years VIP has raised more than $400,000 for Make-A-Wish. Since VIP operates stores in three states, the money collected in those states, and Quirk’s match, is given to the Make-A-Wish chapters in those states.
There are perks for stores that raise the most money. MacCausland says, “Pizza and donuts go a long way.” There are several levels of goodies, and the top prize includes every level of incentive, plus an extra day off. “I think we had a dozen stores at that top level last year.”
VIP also is a sponsor of the Boy Scouts of America Pine Tree Council. VIP donates a pinewood derby car to every scout, sponsors the Pinewood Derby State championship race and provides a welcome packet to every Cub Scout and Boy Scout leader in the state. The packet includes a certificate for a free oil change.
Events big and small, from car shows to car washes, are all possibilities. Quirk says if it’s something a particular store wants to support, “we let them do it.” Sometimes an employee is involved in an event or project. Those get the VIP stamp of approval, too.
“Our rule of thumb is if one of our VIP associates is personally involved, then we will absolutely provide support for that organization.”
When VIP opened its newest store in Lebanon, N.H. in August, the company found a unique way to celebrate and get acquainted with its newest community. Winkeler remembers a news article crossing his desk about the financial strains on the local schools. The VIP team reached out to the superintendents of two local school districts and asked how the company could get involved.
Together, they created “oil changes for education.” Through the end of October VIP is offering $10 oil changes to all customers at the Lebanon store, and 100% of the proceeds will be donated to seven local schools in the Lebanon and Hartford school districts.
“When we enter a new market, we want to become active in the local community — it’s part of our company culture,” says Winkeler. ■