Guts. Gumption. God.
Ken Towery is marking his 50th year in the tire industry this year, and he calls winning Modern Tire Dealer’s Tire Dealer of the Year award “the icing on the cake!”
Towery’s career began in 1958 when he was a college student and was hired as a tire changer for a tire company-owned retail outlet. He opened his own dealership in 1971, and today he is president of Ken Towery's AutoCare SuperCenter, with 16 retail locations in Kentucky and Indiana, plus a wholesale division known as America’s Best Tires of Kentucky Inc.
His is a story of guts, gumption — and spiritual belief. It took guts to tell his employer, the Firestone Tire & Rubber Co., that he wanted to open his own store — when his bank account held only $500. He had the gumption to work extremely hard, especially in the early years when he would sometimes sleep on a cot in the back of a store when he stayed late and opened early.
And Towery is a devout Christian, who never forgets to thank God for the blessings he feels he’s received.
As Ben Franklin wrote in 1757, “God helps those who help themselves.” Here’s what this “partnership” has wrought.
In the beginning...
Towery was born in Berea, Ky., and his family moved to Louisville when he was a child. He says he inherited his work ethic from his mother, who still lives in Louisville. He got his first job at the neighborhood grocery store at 14, bagging groceries and stocking shelves.
While a junior at the University of Kentucky 50 years ago, Towery got a job as a tire changer at a Firestone retail outlet in New Albany, Ind., across the river from his hometown.
In his senior year, he was transferred to a large Firestone store in Lexington, Ky., that also had a gas island. He changed tires until the store closed at 6 p.m., and then pumped gas until 9 p.m. When he wasn’t attending to customers, he was studying his class books.
Hard, yes, but he loved what he was doing, Towery says.
He graduated in 1959 with a degree in marketing management, and was recruited by Firestone to join its executive management training program — one of only 50 candidates chosen per year. The six-month training program offered a well-rounded education that took him to company headquarters in Akron, Ohio, as well as to work in a retread shop and a retail store. Upon completion of his training, his first assignment was as an office and credit manager in a Louisville Firestone store. It had $125,000 in accounts receivables.
As was the custom of the day, in addition to tires, the store sold appliances such as refrigerators, television sets, radios and other household items including luggage and bicycles. Towery says, “I had to be a jack-of-all-trades, selling bikes, toys, lawn mowers, etc. I definitely didn’t get bored!” He did this job for about a year. Then he was moved to fill a spot on the company’s commercial tire sales team, specializing in off-the-road and medium truck tires.
In 1961 he landed the Coca-Cola Co. as a national account, and in 1964 he was named the number one commercial salesman in the company. After that he was promoted to running a retail dealership in Middleton, Ohio, about 150 miles from Louisville. He did that for one year, and then was moved back to Akron to serve as manager of field training. One of the responsibilities of his new job was writing and updating all the company’s training guides — on such topics as how to sell refrigerators, tires, televisions and other home and auto products!
Another aspect of his job was to travel to new Firestone stores before their grand openings to make sure everything was in line with company policy and review all the store personnel. He traveled anywhere a store opened — from California to New York. Plus he was one of five college recruiters for the executive management program.
The big fix...
In 1969, after “five years and two months” as manager of field training, Towery was asked to fix three big money-losing Firestone store locations by R.D. Thomas, Firestone’s executive vice president of sales.
Towery was nervous about the assignment, but he told Thomas, “I think I can get the job done.” Towery characterizes himself as a workaholic, and he says he wasn’t afraid of the challenge.
All three stores were in the Louisville market, which had 10 Firestone stores in total. After only one year under Towery’s guidance, all three locations were showing a profit.
How did he do it? With a lot of hard work, long hours and, most importantly, a change in the store personnel’s attitude, he says.
One of the three stores in which he was in charge was having a particularly hard time.
As was common in the 1960s, the store was connected to a shopping plaza. The shopping center management was threatening to terminate its lease. The store manager had recently been fired, and the assistant manager was not what you’d call a “people person,” Towery remembers. “For customers and employees, it was a very negative atmosphere.” He was even told by Firestone personnel, “This location is a loser and will always be a loser!”
These mall stores typically had long hours — from 7:30 a.m. to 9 p.m. Towery says he was always at the store until after closing, and if he was there past 10:30 p.m., which wasn’t uncommon, he would stay at the store overnight, sleeping on a cot in the stock room. “Any time I was there that late and had to be there early I stayed over. I kept a shaving kit and a set of clean clothes at the store to use in the morning.”
Towery felt, above all, “If we change the personnel’s attitude, we have a chance.” He instituted a policy that required employees to meet once a week to talk about what it took to take care of the customers.
He set big goals for the location. He wanted to “merchandize the store with excitement. I wanted it to look like a jewelry box,” he says. (In those days, it was the Firestone format to use jewel tones in the stores such as ruby reds and golds, plus furnish the stores with wall-to-wall carpeting and fancy wall paper.)
Not everything went smoothly. Towery notes the assistant manager had to be let go because he would not adapt to the new program. Yet the store was turned around, profiting from Towery’s belief of “turning customers into friends.”
He recalls a good example of how this relationship can pay off. Very late one Christmas Eve, a customer, Tom Fryer, called him at home.
“I’ve got a real problem, Ken,” Fryer said. “I’m on a church committee that’s giving toys to underprivileged children. One child had requested a ‘banana-style’ bicycle, and I had one in layaway at a local store. But when I went to pick it up, it had been sold out from under me. I’ve looked everywhere for another bike, but they’re all sold out. This child will be devastated on Christmas morning. I know your stores sold these bikes. Is there any chance you still have one?”
Towery had stocked his stores with several hundred of the popular bikes. He told Fryer he did indeed have one or two remaining in boxes.
“I hate to ask,” said Fryer, “but would you mind meeting me so I can get the bike?”
It was close to midnight. Towery had already been in bed. But at 1 a.m. he found himself driving across town to deliver a bicycle.
Once this story got out among the church’s parishioners, Towery’s store was sent so much business that sales went through the roof. (The church even bought enough air conditioners from Towery to cool its whole sanctuary.)
Ask and ye shall receive
Impressed with his success, Firestone asked him to take on more stores. One store employee, Tom Reese, had great potential, Towery felt. He was put in charge of a store for Towery.
Towery and Reese worked well together, and in 1971, Towery was starting to feel like he wanted to run his own dealership. He asked Reese if he was interested in going into business with him. Reese was just out of college, with a family, and told him he couldn’t take the financial risk. (Reese eventually moved up the executive ranks at, first, Firestone Tire & Rubber Co., and, then, Continental General Tire Inc.)
So Towery figured he could go it alone, and wrote Firestone a long letter saying he wanted his own store in Louisville. In it, Towery presented research he’d done on the Louisville tire market. He wrote that he felt the market was under-represented and emphasized that Firestone would benefit from having an aggressive dealer like him in the market.
He went to Akron to present his plan. However, knowing Towery’s track record, the company had its own ideas. Firestone wanted him to work at headquarters again. “They knew I had accomplished everything they had given me to do — above and beyond what was asked,” Towery says.
So he went home with his future undecided.
The company flew him back into Akron a second time to plead its case. “We’ll give you a division,” they said.
“No,” Towery firmly told them. He wanted his own store. He had already picked out a good location, a shuttered Marathon gas station. “And I promise to open more Firestone stores in the future,” he told the execs. “I know I don’t have much money, but I have ability.”
Thomas, now Firestone’s president, called the company’s real estate attorney, and they all flew down to Louisville to see Towery’s potential location.
The price for the lot was $50,000. In two days, the sale was approved (“Thomas had never seen the company move so quickly,” Towery says). Firestone bought the land, built a building and leased it back to Towery.
A wing and a prayer
When it came time to place orders for tires and equipment, Towery hit a small snag.
The creditors discovered he had a meager $500 in his bank account — and he didn’t even own a car. The store was getting ready to open, but his suppliers refused to supply him!
Towery went to his best friend who was “a financial wizard,” Towery says, and he showed him his numbers. “I’m not wrong — this will work, right?” Towery asked. His friend agreed it was workable.
All the Firestone financial people ran the numbers, too. Everyone agreed the plan looked good. Then Towery’s friend agreed to sign a $30,000 note for seed money. The money was enough to prove credit-worthiness to the suppliers.
Ninety days after the store opened, Towery was able to pay off the whole $30,000 loan. And true to his word, two years later Towery opened a second store, and a third was opened a year later. He’s been increasing his store count ever since.
The company now has 16 locations — nine in the Louisville area; three in Lexington and one in Danville, Ky.; and three in southern Indiana (New Albany, Clarksville and Jeffersonville). It also has a wholesale division, which it runs under the America’s Best Tires banner. The company employs 200 “team members.”
Its newest store was opened in 2001. Another one is in the planning stages; the company expects to break ground on it next April or May. The new location is, “going through a zoning change (from C-1 to C-2), but we expect no major problems. We just have to jump through a few hoops to proceed,” says Towery. Once started, construction at the 10-bay shop is expected to take about 120 days. Traffic count passing by the new corner lot is the highest in the whole state of Kentucky, Towery points out, totaling 77,000 cars a day.
Towery also is looking at several other locations, and in the next five years, he hopes to add six to seven more stores.
An abundance of products
Although he started out as a Firestone-only retailer, in 1978 Towery added the Michelin brand. “I was one of the last dealers to offer a second brand,” Towery says.
Why did he branch out? “Families had more than one vehicle,” Towery explains. “We needed different options for our customers. Plus there were other dealers they could go to. I didn’t want to turn anyone away. I wanted to be able to service all their needs.
“Vehicles were coming with a variety of tires as original equipment. Many customers follow OE brands; although the percentage is not as high as it used to be, it’s still at least 30% to 40%. If they’re happy with the OE brand, they’ll stick with it.”
Ken Towery's AutoCare SuperCenter locations now offer most major brand tires, including Firestone, Bridgestone, Hankook, Goodyear, Kumho, Michelin, BFGoodrich, Uniroyal, Dunlop, Pirelli, Continental and Dayton, plus many private brands. His outlets specialize in passenger and light truck tires. However, the wholesale division does offer medium truck tires as well.
America’s Best Tires warehouses about 26,000 tires, freeing up the Ken Towery’s locations from having to stock a large number. Each store has about 1,500 to 2,000 consumer tires on hand, and they can get any other tire on demand through the wholesale division’s hot-shot delivery service. In addition, the wholesale division has 400 dealer customers in Kentucky, Indiana, Tennessee and West Virginia.
Although a very small part of its business, used tires also are offered at his stores. “In today’s economy, more and more people are looking for good used tires because that’s all they can afford,” Towery explains.
New tire fill rates are a major concern right now, Towery says, with order fill rates as bad as 40% in some cases. “Back orders are causing every dealer concern. We simply can’t be out of tires!”
Since the beginning, all the stores’ profits have been augmented by automotive service, which accounts for 50% of the company’s income.
Each location typically has eight or nine bays utilizing in-ground or above-ground Challenger lifts. The company offers brake service, shocks, struts, wheel alignment, air conditioning service, engine diagnostics, batteries, exhaust work — pretty much everything except engine swaps. Oil changes are performed using an above-bay reel system connected to 500-gallon tanks of Kendall oil.
Ken Towery's AutoCare SuperCenter locations also sell American Racing wheels. “Custom wheel sales are tricky,” says Towery, because “designs can go out of fashion in a flash. You see a wheel design selling slowly, you better try to sell it quick or you’ll be giving it away.”
The company does not offer nitrogen tire filling, but Towery has looked into it and is trying to justify the cost of equipping all 16 stores with nitrogen generators.
“There are a lot of questions to be answered,” Towery says. “To pay for your investment, do you charge for the service? What do you charge — $3, $5 a tire? What are your competitors doing? When I get answers, I’ll make a decision.”
Ken Towery’s also has its own credit card to help customers with big purchases. It has no annual fee and offers 90 days interest free on any qualified amount. The card is accepted at not only Ken Towery’s stores, but also at 5,000 Bridgestone Firestone retail outlets nationwide. Towery says the response to the card has been very positive.
Ken Towery’s has its own training room at company headquarters. It also utilizes a nearby Jefferson Technical College facility, where it sends its service technicians for hands-on training in electrical work, brakes, alignment and other services. The company is big on having its techs ASE certified. “Training is constant,” says Towery.
New general service hires work with an experienced designated trainer for a period of time. And once a month, service personnel attend a meeting at the company’s training room to go over company procedures.
A policy to help eliminate the possibility of wheel-offs was just put into place. One tech mounts the tires and signs off on the service. The car is dropped to the ground and a second tech uses a torque wrench to do the final tightening of the lug nuts. His signature is required to sign off on this step. A salesman checks for the two signatures.
Towery is serious about this policy, and, in fact, has regrettably had to fire techs for not adhering to it.
The company also is putting heavy emphasis on tire pressure monitoring system (TPMS) service training, utilizing workshops presented by the Specialty Equipment Market Association (SEMA), the Tire Industry Association (TIA) and other sources.
All store managers and sales people have their own monthly meetings, during which they cover a wide variety of categories such as road hazard warranties, secret shopper reports and customer service. They also review the company’s five steps to a tire sale:
1. Meet the customer with a friendly greeting.
2. Get out to the car.
3. Qualify the buyer.
4. Make recommendations and sell the benefits and features.
5. Close the sale.
Every sale is different, Towery admits. And he can testify that step #3 is tricky. He recalls that very early in his career, he greeted a customer by his beat-up, old Cadillac. The man was dressed in worn-out clothes. “I felt like I was surely wasting my time,” Towery says. But he proceeded with the sale and recommended his top-of-the-line Firestone tires. “Wouldn’t you like a set of these tires on your car?” he asked the man.
To his surprise, the man accepted the suggestion. Then Towery started worrying about collecting the money. He thought, if the guy pays on credit, it may be bad, or what if his check bounces and the company loses the money?
But he wrote up the sales ticket and the car was taken to the service bays for the tire installation.
It was then that a co-worker asked him, “Don’t you know who that is? He owns Calumet Farms (of Kentucky Derby horse racing fame)!”
“So don’t prejudge a customer’s buying power based on his appearance or the age and condition of his vehicle!” Towery advises.
Building a support group
Towery believes that with success also comes responsibility. He feels the need to give back to the industry as much as possible for the opportunities the industry has given to him.
He’s served on several tire manufacturers’ dealer advisory councils, and for 10 years he was on the executive committee for the National Tire Dealers and Retreaders Association, which is now TIA. But he never sought the presidency. He says he couldn’t afford the time it would take him away from his business. Up until recently, he says, he did not have the support team that the business would have needed.
That all started to change in 2002, when he married his wife, Joanne, and she started working part-time for the firm.
Towery and Joanne met in 2000 while attending a grief class at their church following the death of their spouses. They shared a passion for swing dancing and jazz music and instantly hit it off.
Joanne has a Ph.D. in food science and was vice president of research and development at Yum Brands Inc. based in Louisville. (Yum is a $10 billion restaurant conglomeration with more than 35,000 KFC, Long John Silver’s, Pizza Hut, Taco Bell and A&W locations, among other properties. In fact, Joanne is one of a very small number of people that actually knows all 11 top secret herbs and spices that go into the KFC chicken recipe. She is still sworn to secrecy.)
Joanne had planned to retire from Yum, but when she married Towery, her plans changed. She left Yum in 2004 and joined her husband full-time in the daily operations of the tire business as executive vice president and chief financial officer.
At Yum, she was the right-hand person for seven presidents — the best financial minds and human resources experts in the world, she says. Her years of experience were put to use at Ken Towery’s. She is credited with revamping the company’s human resources system. She instituted yearly team member reviews and has put goal-setting plans in place for selling service, alignments, tires and tire protection plans. “Everyone is now accountable for their goals and results,” Joanne points out.
The first year after Joanne joined the company, the profits grew. And they have continued to grow. Last year, profits were up 35% compared to the prior year.
This year is a little softer, the Towerys note. Tire units are OK, but service is down, where the gross profit is normally high.
They say the company is doing well with its tire protection plan. It covers three years or tire wear to 3/32nds tread depth. The plan costs $9.99 or 10% of the tire cost, whichever is higher, and includes free tire rotations and free tire repairs. If the tire is not fixable, it is replaced. Some 55% to 60% of their customers buy the plan, and the gross profit is close to 80%.
Joanne also is a big help finding ideal land parcels for new stores. From her years of experience with KFC, she knows which locations retailers covet: “Red light, corner lot,” Joanne says emphatically.
Prayers answered by Church
Another opportune addition was Dave Church, the company’s senior vice president. Church, a long-time friend of Towery’s, is an astute businessman and entrepreneur who over the years has had a variety of his own retail establishments and has extensive experience in the tire industry.
He now handles hiring, sales and advertising — including the creation of newspaper, television, cable and direct mail ads.
A local television station films the TV ads at a Ken Towery’s store, and they star Ken and Joanne. Their faces have become very well-known in their markets, which helps add a personal touch to the advertising.
Every Sunday, the company has a three-quarter-page ad in the Louisville Courier-Journal and a full page ad in the Lexington, Ky., paper, the Lexington Herald-Leader. The company runs its ads on the sports pages. Towery says they tried other sections, but the response was not as good. “People have been indoctrinated to look in the sports pages for tire ads,” he says.
The company also uses direct mail pieces with the help of a MaddenCo computer program and Michelin North America Inc.’s direct mail program. But word-of-mouth advertising from satisfied customers is the most critical, the Towerys agree.
Church’s job of hiring new team members is even more challenging. He says the company uses Career Builder for management and sales positions, and posts signs at stores for general service personnel. The company also runs newspaper ads and gets referrals from current employees. If a referral is hired and works 90 days, the employee who made the referral gets a gift card.
The Towerys note that every potential hire takes a drug test, and if there is an accident, those involved are tested for the presence of drugs immediately following the incident. If drugs are found, the person is let go — no exceptions.
Towery also has close ties to a local seminary school, and for the last four to five years he has hired students who are working their way through college.
Also helping the bottom line is Towery’s son, Kris. After working in stock investments for a number of years after college, he came back to the fold in June.
Kris learned the business from the ground up. “I’ve always been excited about tires,” he says. “I knew the difference between a Goodyear and a Firestone before I could read. At 12 years old I was unloading tires. I started in sales when I was 16. I was a shy kid, and sales helped me develop a better rapport with people.” He also worked at a Ken Towery’s location in Lexington while attending college, where he majored in business.
“Everything I learned in college I’ve tailored for use at my dad’s company,” he says. “I’m passionate about solving problems.”
As store supervisor, he says he empowers team members to handle store problems themselves, but makes frequent visits to all the managers to review store policies. Kris’ best friend, Jeff Kuhn, also is employed at Ken Towery’s as office manager. He joined the company 13 years ago, also starting on the ground floor changing tires.
Towery’s daughter, Lorea Ware, is a homemaker and hasn’t worked for the company. However, her two sons are showing keen interest in getting involved.
At 72, Towery still has no plans to retire, but says he feels blessed to have two more generations becoming involved with the business.
It’s better to give than receive
Towery believes in giving back to the community, too.
Eight years ago, the company became involved in the Coats for Kids program. It offers a $20 in-store gift certificate to anyone donating a new or gently used coat. Ken Towery’s partners with Cintas, the uniform company, to have the coats cleaned and repaired, if necessary. The coats are then donated to various churches, community organizations and children’s homes. This annual event has collected thousands of coats since its inception.
The Towerys also donate clothing to a local charity. No, not a bag of used clothes, but truckloads of new ones.
As an example, Stein Mart Inc. holds sales a couple of times a year offering 75% off its retail price — and then sends its best customers coupons for 20% off the already incredibly low sale price. The Towerys go to the sales and buy up clothes of all sizes (sometimes as much as $20,000 worth) at rock-bottom prices. Then the clothes are donated to Life Bridges, a local church that helps the homeless and down-trodden. Some of the clothes get shipped to an orphanage in Hungary.
Ken Towery’s stores also are used as drop-off points for the Kentucky Harvest canned food drive and Toys for Tots and they assist fund raising activities for the St. Joseph’s Children’s Home, a Louisville orphanage. (To increase participation in the food drive, Ken Towery's AutoCare SuperCenter locations offer customers $2 coupons — capped at $15 to $20 — for each can of food they bring in. The company has collected thousands of pounds of food over the years.)
As an aside, the Towerys say the key to success for a charity drive has a lot to do with developing good relationships with the local radio DJs. The Towerys are often on-air guests at the Louisville and Lexington radio stations promoting their charity events.
The dealership also holds an annual ride-and-drive with the help of tire manufacturers Hankook Tire America Corp. and Kumho Tire U.S.A. Inc. Participants pay a $10 entry fee to test drive tires on a road course set up at the University of Louisville’s football stadium parking lot. The event has raised money for The K.I.D.S Center, which serves children with physical, neurological and developmental needs.
Towery also serves on the foundation board of the Southern Baptist Theological Seminary in Louisville.
Towery’s Tire Dealer of the Year award money is earmarked for Necole’s Place in Louisville, a subsidiary of Women’s Choice, a pro-life organization.
“It gets no money from United Way,” Joanne points out. The organization provides women with an education on how to take care of themselves and their babies.
The Towerys also made a large anonymous donation to fix the leaking roof of the small church they attend near their weekend vacation spot. “You can’t out-give God,” say the Towerys.