Brothers With a Vision: 2017 Tire Dealer of the Year Award Winners Mark and Scott Rhodes
At Plaza Tire Service Inc., there’s only one brand that really matters. “Whatever you do, say Plaza Tire a lot. We may not have this brand or that brand tomorrow, but there will always be Plaza Tire.”
That was the advice Vernon “Pee Wee” Rhodes passed along to his older son, Mark, 30 years ago as he started to hand over control of the company’s marketing duties.
It’s been 54 years since Pee Wee Rhodes opened a car wash that ultimately led him into the tire business, but his words still drive the organization he founded in Cape Girardeau, Mo.
Now the business is led by his two sons, Mark Rhodes and Scott Rhodes. They’ve added 25 stores since they purchased the corporation and have transformed a 150,000-square-foot former manufacturing plant into a new headquarters and distribution center. Their 62 tire stores in four states generate an estimated $80 million in sales, and construction of the 63rd store is underway.
Their success has earned Mark Rhodes and Scott Rhodes Modern Tire Dealer’s 2017 Tire Dealer of the Year Award.The early days
It all began with a car wash. In 1963 Pee Wee Rhodes opened Plaza Car Wash Inc. in Cape Girardeau. Rainy days made for slow days, so he struck up relationships with used car dealers. He’d clean up cars as they were sold and install retreaded tires on them. “Dad always called it ‘romancing’ used cars,” Scott says. He bought the retreads from a shop behind the car wash.
Eventually that retreader went out of business, so Pee Wee bought the equipment. As tire sales increased, he installed a tire changer on the sidewalk in front of the car wash. City officials cited it as a violation of a local ordinance, which forced the business owner to make a decision. Over Labor Day weekend in 1968 Pee Wee ripped out the equipment from his car wash business, sold it for scrap, and on Tuesday morning reopened as Plaza Tire Service.
“He sold a going business for scrap,” Scott says. “That’s how my father did things, and he never looked back. He was very good at making a decision and sticking to it.”
The first new tire brands he sold were Gates and BFGoodrich. He built a wholesale business and created routes based on what he had learned while working for Bunny Bread Co. In the beginning, Plaza Tire was more of a wholesaler than a retailer, with 80% of the business coming from wholesaling.
New retail locations were added in the early 1970s, but it was after fuel prices skyrocketed in 1979 and 1980 that Pee Wee saw a path toward rapid retail expansion.
That’s about the time Mark started working for his father. Corporate records show his first day of work was in 1978, but he says he has a check stub that dates back to a year earlier. After graduating from high school in 1982, he spent a couple disengaged years at the University of Missouri earning mediocre grades. He came back home and considered taking a semester off, but knew all along that he wanted to work in the tire business.
Once he was back in Cape Girardeau, he became entrenched in the business, and one thing after another seemed to cement the idea he was where he needed to be. There was the flood after more than 6 inches of rain fell on May 15, 1986. He and his uncle Edwin “Pete” Rhodes had water up to their armpits as they were treading through the company’s headquarters and original store. (His parents and Scott, who was 15 at the time, were out of town.)
Later that year his uncle, who had been a partner in the business, retired. A few years later his father had a heart attack. “There was always a reason for me to be here,” Mark says. “It never made sense to go back to school, and by that time I had such a job and responsibilities built up, how would I leave? And I didn’t want to.”Change in responsibilities
The heart attack prompted Pee Wee to take a step back, and Mark says it also changed his role in the business. “As I got more engaged he probably got less engaged.” Mark eventually took on the bulk of the tire operations — overseeing the wholesale and retail businesses, as well as the purchasing, pricing and marketing.
Pee Wee turned his focus to real estate. He was a believer in owning the land where stores were built, so he scouted property for future Plaza Tire stores. The company owns all but three of the locations where it sells tires. He also bought other property along the way.
That real estate development business, now known as the Rhodes Group, is controlled by a group of family members, including Mark and Scott. Its holdings are mostly centered in Cape Girardeau, and include some highly visible properties around town. About half of its business is tied to the land where Plaza Tire builds and operates its stores. The other half of the real estate is leased to third-party entities, with a focus on retail and office space.
But real estate is just one piece of the network of businesses Mark and Scott have built. They also own a Mighty Auto Parts franchise, a quick lube, and a commercial construction business. And they say each entity helps Plaza Tire grow.
“A lot of them are industries that we use or need, and we have tried to capitalize on. It’s all interconnected,” says Scott, who estimates he spends half his time focused on those other entities, with the other half dedicated to the inside operations of Plaza Tire. Like Mark, Scott says he inherited his tasks in the business as his father stepped further away from the day-to-day operations.
The parts franchise “gives us a consistent price and quality of parts,” Mark says. The parts inventory is housed inside Plaza Tire’s lone distribution center, in Cape Girardeau, and parts are shipped to stores on the same delivery schedule and in the same trucks as tires. A majority of the parts franchise’s business is made up of sales to Plaza Tire stores.
Performance Quick Lube opened in late 1998 next door to Cape Girardeau’s third Plaza Tire store. The tire dealership is surrounded by new car dealers and on a street that features heavy retail traffic with Walmart and Target nearby, plus quick access to hotels and Interstate 55. But the real estate was expensive, so Scott says they looked for “something that was complementary.”
They built the quick lube and tire store side-by-side at the same time. But since then there’s been a dramatic shift in the quick lube business. “We’re not in love with the quick lube business,” Scott says, though they have no plans to leave it.
“Back then Pennzoil and Valvoline went to great extremes to tell everybody that they needed to change their oil every 3,000 or 4,000 miles,” Mark says. “Now all the car manufacturers are saying it’s 8,000 miles or 10,000 miles, so they’ve cut that business in half.”
Still, Mark says the quick lube — they opened only that one — “keeps its head above water, but it’s not a great money maker on its own for us. Back then it looked like it was an upcoming industry.”
Scott expects quick lube businesses everywhere will have to offer more services in the future. “I question that whole sector and what’s going to happen.”Boulder Construction LLC isn’t facing the same uncertainty. Mark and Scott created the construction company in 1999 in an effort to “get a little more control” over the building of its stores, Scott says. As they’ve grown into it he says they’ve found they can save money on their own projects, but also make money working on others.
“These other businesses kind of started as part-time ventures,” Mark says. “We have this building and we rent it out. But the construction business has really developed into a big business of its own.”
In early August, Gabe Wunderlich, the company’s general manager, was juggling about 10 different projects as crews were mobilizing to start the construction of Plaza Tire’s third store in Springfield, Mo.
Boulder Construction is a small, low rise commercial general contractor — with a lot of tire store experience. It has about 50 employees.
A special case
In Springfield, Plaza Tire is doing something it has never done before. It’s opening three stores, back-to-back-to-back, all in a year. The first opened in May on the east side of town, and the second opened its doors on Aug. 3, 2017, on the west side. The third is due to open by the end of the year.
Springfield, in the southwest corner of Missouri, is the third largest city in the state, and it would seem like a natural market for a tire dealership born in southern Missouri. But the 276 miles from Springfield to Cape Girardeau in the southeast corner of the state have always been a barrier.
Mark says, “It’s probably a market we neglected. Springfield traditionally is hard to get to from Cape Girardeau. We woke up to the fact it might be a good spot for us.”
It’s required some adaptation. Plaza Tire prides itself on serving customers quickly, and that includes having the tires they need in stock. Daily delivery to Springfield from the company’s sole warehouse in Cape Girardeau isn’t a viable option, so that means the Springfield stores need more space for tire inventory — anywhere from 1,800 to 2,400 tires per store. They receive deliveries twice a week.
“We think you’re not planning on having a tire problem when you get out of bed in the morning,” Mark says. “You have a tire problem and pull into Plaza Tire, you don’t want me to say ‘I’ll have it tomorrow.’ That’s the way we think.”As a result, each of the 62 Plaza Tire stores stocks at least 1,200 tires. Some have 1,600 tires in stock.
That focus on inventory and fast service has been part of the mantra since Mark and Scott’s father was in charge. He came up with the business’ tag line, “the quick change artist” and did everything with a sense of urgency. Mark says, “My dad was a believer that it didn’t really matter how well you did something, but if you did it fast, it was good.”
That didn’t mean quality work wasn’t important, but he knew he could satisfy with speed.
“He wanted everything to be done quick, because it fuels more business. You get people in and out quicker and you have time for another job in that bay.
“Even today when we look at customer reviews, the one thing that comes up overwhelmingly in reviews, both good and bad, is you were either really good and fast and speedy, or you were slow,” Mark says. “So if you can dominate that speed factor it makes the customer happy. Why do we have quick lubes and drive-thru restaurants? Because time is of the utmost importance.”
This year, Plaza Tire has introduced a new element to its race to service customers better and faster with a new promise: “four tires in one hour, guaranteed.” It excludes custom wheels and applies to purchases of in-stock tires only.‘We want to sell more tires’
While some tire stores are minimizing and even eliminating the tire displays in their showrooms, Plaza Tire takes the opposite approach. There are tires on display inside the store, as well as outside.
Creating those outdoor displays got a little easier for employees last year. At the 2016 Specialty Equipment Market Association Show, Mark discovered TruStack Tire Dollies. The flat, plastic dollies make it easy to stack and move tires. Plaza Tire uses them to cart tires outside the store each day. “Each store was rolling 20 to 30 stacks of tires in and out every day. This is a clean, easy, efficient thing. It was one of those things that we really needed and it fits into our marketing.”
It probably doesn’t hurt that the thin platform is bright green and matches the Plaza Tire color scheme.
“When people drive by our stores there’s no doubt that we’re in the tire business,” Mark says. “That’s what we do. We’re probably 65% tires. We like to be a very high percentage of tires. That’s our M.O. There are people who focus on service. There are people who focus on tires. We want to sell more tires.”
Plaza Tire offers 16 tire brands to its customers, but the company doesn’t buy from them all equally. Mark says its top brands are Falken, Bridgestone, Firestone, Nokian and Michelin.
“Typically the more well-known the brand, the more competitive it is,” Mark says. “Everybody has Bridgestone, Firestone, Michelin and Goodyear available to them, so therefore the margins get compressed on them.
“You have to balance yourself with those well-known brands — because people want to buy them, they’re pull brands — with brands that you can kind of market as your own. And then you have to have your economy brands, too.”There’s at least one thing in the tire industry that hasn’t changed since the first tire meeting Mark attended decades ago. “I’ve always been taught that about 70% of people buy what’s recommended. When you take that into consideration, even the people who say they want the cheapest thing still fall into the category.
“You’re going to sell them something. They don’t know what the cheapest thing is. You still have pretty good control over what you’re selling.
“One thing I think we’ve done well with is supply a high degree of variety, brand and price points.”
Success with direct mail
Giving customers a choice ties into Plaza Tire’s marketing strategy.
Brian McMillan directs marketing and advertising for the tire dealership, which is the 18th largest in the country according to the Modern Tire Dealer 100. Plaza Tire points its marketing in a lot of directions, including television and radio, Facebook and Instagram, paid online search and direct mail. But the overall strategy is clear — market the Plaza Tire name.
Direct mail is an especially good example of that. The company usually sends five or six mailings a year across its four-state region of Missouri, Arkansas, Illinois and Kentucky. Each mailing adds up to about a half million pieces, and can cost roughly 30 to 40 cents per piece for full-color printing and postage. There are 8-and-a-half-inch by 5-inch postcards, eight-page catalogs and jumbo full-page postcards. They prominently feature tire prices and specials, as well as discounts on oil changes, alignments and other automotive services. No matter the format, no mailing focuses on a single tire brand.
“We’ve done smaller pieces, but we just don’t get the response from them. It honestly doesn’t cost that much more to do a larger, multi-page piece,” McMillan says. “Our premise has been if you’re going to send it, you’re going to get more response if you do just a little more.
“We have people tell us all the time, ‘we’ve got better options than direct mail,’ but you can see a change when those mail pieces start to hit.”Mark says, “It’s a balance. If you just do direct mail you’re missing all the people who are digital. If you just do digital you miss all the people who aren’t. There’s a happy medium in there, whether it’s television or radio or Facebook or an email blast or a direct mail piece or a printed ad or billboard. There’s still billboards that are quite viable.”
McMillan believes direct mail still delivers the best return. “It’s right there in front of people, and ours are always bright and colorful. We put enough time on the coupons that they don’t expire too quickly, and the coupons are trackable, so we can definitely see what gets the most redemptions. Anytime we do one of these buy three, get one free offers it’s a great deal, and people love it.”
The company applies similar brand thinking to the look of its stores.
While some tire dealerships promote tire brands with large lighted signs on their buildings, Plaza Tire keeps the look clean and simple. Stores all feature a distinguishable bright green fascia, and tire brand banners usually fly from the tops of bay entrances, but the stores don’t feature fixed exterior signage from any tire company. All of that space is dedicated to highlighting the Plaza Tire name.
“With city codes it used to be that you could hang as many signs as you wanted on your property,” Scott says. “Now it’s very restrictive so you have to choose who you want to focus on. If there’s going to be a big sign, we want it to have our name on it.”
Because zoning rules are different in every community, Plaza Tire doesn’t have a fixed signage plan for its stores. “We want all we can get,” Scott says. Case in point, the newest store in Springfield is the same model as the store in Chesterfield, Mo., a suburb of St. Louis. Zoning laws in Springfield allowed four signs on the building, plus a sign attached to a pole.
“In Chesterfield we have the exact same building and we could only get two building signs and a monument sign (that’s 6 feet off the ground),” Scott says. “You never know. You try to get all you can.”Building blocks
Those discrepancies in zoning rules are a common hurdle for the fast-growing tire dealership, and specifically for Scott, who leads all real estate efforts, including those fine details. He says even though building codes are similar, the specifics of signs and architectural features on buildings vary by municipality. For years Plaza Tire’s trademark red letter sign has been backed by green metal sheeting. “Some don’t like the green metal because it’s too bright,” Scott says. “We were in Chesterfield and they likened us to a McDonald’s and Walgreens. I told them if you mean that as a slap in the face I take it as a compliment because they’re very successful organizations.”
Plaza Tire has found a way to adapt in those circumstances. In November 2016 the company opened a new store in O’Fallon, Mo., another St. Louis suburb, and was forced to replace the green metal with green-painted, wooden slats. It gave the store a more modern look, and the three stores that have opened since have featured the same slatted-front.
The Chesterfield outlet carries the distinction of being the most difficult store to build, Scott says. It opened in December 2008 and was the 50th Plaza Tire store. “We were new in those markets. And in the high-end demographic cities, the metro areas, their system is much more structured, and they have a lot going on. Smaller markets are eager for something that is happening, so it’s excitement and they welcome you. In a lot of the bigger markets they have a ton going on and your store opening is just another day for them.”
Ideally, every store would mimic two of the three Plaza Tire stores in the company’s hometown. Both are located on Kingshighway Street, albeit on opposite ends of town. The north-side store has nine bays, while the flagship south-side store, which sits on the same block where the business began in 1963, features 11 bays.
“Those two stores are our favorite prototypes,” Scott says. “The bays run parallel with the street so you get good street presence. They take more frontage, so sometimes you don’t have the opportunity to get that much, or you can’t afford it. But it follows something our father taught us. You want to show the bays. We have very visible bays and glass doors.”
Improving the visibility of Plaza Tire’s flagship store was a process decades in the making. It required multiple deals to acquire a full city block, but after the final parcels were purchased in 2010, the company was able to build a new flagship store in time for its 50th anniversary in 2013, and also turn the building to face the busier street. Missouri Department of Transportation counts show 20,170 cars drive past the store each day — that’s the equivalent of more than half of the city’s residents passing by daily.
‘In it for the long term’
Plaza Tire’s growth has been steady, but Mark and Scott say they don’t have a master plan on a shelf for where they want to take the business. No magical number of stores they want to own. No pie-in-the-sky dream of hitting a certain sales figure. “We want to run a good business,” Mark says. “We want to be profitable and be able to pay our bills and treat our employees well. To think we have a five-year plan or something that sophisticated would be wrong. We’ll grow within our marketplace and expand out gradually if the moment is right. Next year we might not open any stores. That’s the good thing about being independent.”
The brothers say there’s no ideal number of stores to open each year, but for their size opening two or three a year isn’t a problem. One year they opened eight stores, including acquisitions, and also bought part ownership in a local new car dealership. (They’ve since sold their stake in the car dealership.) That was a bit much, they admit. “It wears out our people and our infrastructure,” Scott says.
Still, they’re constantly looking at markets for new stores. “We try to be opportunists,” Mark says.
Scott adds, “We don’t land bank a ton of real estate. Although we’re 62 stores we’re still a small company. When we open a store it takes a lot of operations staff, it takes a lot of cash, equipment, inventory, hiring and time. It’s a big task.”And once the construction work is done, the risk is really just beginning. “We have an over $2 million investment in Springfield, plus inventory and equipment, and we’re going to throw the keys to a store manager who hasn’t worked for the company for a long time and tell him, ‘get after it.’ If you think of it that way, it’s a little crazy.”
Most of Plaza Tire’s growth has come from organic expansion, but the company occasionally does acquire other tire stores. About a quarter of the existing stores are the result of acquisitions.
“We like to acquire, and we constantly talk to people,” Scott says. “You get people exiting the business and they’re not sure they want to exit. It’s an emotional deal. Sometimes those conversations take a long time, but we want to buy existing stores.”
One benefit to acquisition is the quicker operational startup, but Mark says, “that doesn’t always mean that it’s more successful.” Scott adds, “We pick up baggage, good and bad. You don’t know what’s there until you’re committed, but the good thing with an existing business is there are existing customers coming in the door.”
The flip side is that as an independent tire dealer, the company can take risks as it opens new locations. “If we know we’re not going to be profitable quickly in a certain market, or know it’s going to take a little longer than it should, that’s a personal decision we’re making,” Mark says. “We’re going to open this store and know it might not be successful for 18 months, but we’re going to take that risk. We’re in it for the long term.”
After 54 years in business, Plaza Tire has more flexibility than it did when Pee Wee was just getting started. He made decisions based on how much money he had in the bank. There were times he knew he didn’t have enough to make payroll, so he’d create and sell coupon books to car dealers, or sell window stickers to customers for a year’s worth of unlimited car washes. He’d go out and hustle to get cash for payroll.“We have a little better foundation than that,” Mark says. “It helps the decision-making process. If you gamble on something, it’s not all or nothing.”
But the long-term thinking isn’t reserved for the men at the top of Plaza Tire. Mark and Scott say it’s something they have to instill in all 452 of their employees, and especially in their store managers.
“We tell them to think long term,” Mark says. “I’ll catch managers and they’re not going to fix something for a few dollars. I ask them, ‘Are we going to close tomorrow? Can we not take care of that right now?’
“That goes for our buildings, too. I’ll walk into a building and a door knob will be busted or a chair is broken. But they don’t want it to go on their expenses. I tell them to think a little longer term. We build buildings out of block concrete and steel. When we build something we own it, and we want it to be around and look good for as long as possible. We’re here to be long term.”
That same long-term thinking is important in every facet of the business, including managing employees, knowing how to stay away from needless drama and providing good customer service.
Employee management: Mark thinks the company is easy to work for, and “not crazy demanding” of its employees. Workers have been known to get a second chance and even a third chance on more than just an occasional basis, especially in entry-level positions. That’s because the company knows it’s hard to find good people, but also, Mark says, “Sometimes we see more in them than they see in themselves.
“They’re 22 or 23 years old. They’re living in today, maybe starting a family and thinking about wanting to earn $1 more an hour. But I’m thinking, if this person works out we could do this and this with them. We’re thinking long term and they’re thinking about right now.”
Avoiding drama: Growing up in a family business, there’s plenty of opportunity for drama. But Mark and Scott say they both learned early on you can’t engage it. “You have to realize everyone has their role,” Mark says.
“There’s going to be ways he wants to do stuff and there’s going to be ways I want to do stuff with the business or buildings or people, and you just compromise and figure out ways to make it work. You could argue about stuff all the time if you wanted to. We separate our tasks.”
Scott adds, “I always tell people we don’t have $1,000 arguments. It’s bigger than that. If you make decisions you’re going to make some bad ones, and we accept that. We make decisions on each other’s behalf every single day. We have to be comfortable with that or nothing gets done.”
That’s another lesson that needs to trickle down to the store level. “I get hit with problems all day long, five, six or seven days a week,” Mark says. “You can’t get wrapped up, because you’d be wrapped up in it 100% of the time. I’ve grown up here when we had 12 stores, and as we’ve grown you learn to roll with the punches.” If there’s a problem you review it and respond with a plan, “and hopefully we fix it in a long-term kind of way.”Customer service: “It’s a lot easier to take care of a problem when it happens than for the customer to call the store manager, the store manager to call a supervisor, a supervisor to call Kevin (Seabaugh, the head of retail operations),” Mark says. “The time it takes to go through all those people, the customer is then really upset. There’s no better time to take care of the customer than the minute it happens. That’s something you’ve got to teach some managers because they tend to feel like the customer is mad at them. They’re not mad at them.
“When I get a complaint, and I don’t get many of them because our guys are good, I let the customer say everything they want to say, and then I ask what can I do to make it better? How can I make you happy? And then whatever it is, you do it. Ninety to 95% of the time you can make them happy.”
Jim McWilliams has worked in the tire industry for 35 years, and joined Plaza Tire as part of an acquisition in 1998. He’s now an area supervisor with 10 stores in the St. Louis area, and says the thing that sets Plaza Tire apart is “hands down our customer service is impeccable.
“If there’s a problem, we’re going to take care of it. That’s how the Rhodes brothers are: take care of the customer no matter what it takes. We want happy customers and happy employees.”Jerry Iverson manages the newest Plaza Tire in the St. Louis market. The store on the north side of O’Fallon, Mo., opened in November, and he says he recently had a customer say his car got scratched while it was at the store. He told the customer to take it to the body shop and get an estimate so he could turn it in. “He said it wasn’t there when he brought it here, so we took care of it,” Iverson says.
“At the end of the day if they’re still your customer, it’s going to take care of itself eventually. An unhappy customer though, you’ll never get them back.”
The power of good employees
In the span of about one week in the summer of 1971, Plaza Tire hired Andy Klipfel and Chuck Schuessler.
Klipfel remembers his first day on the job: They drilled holes into the walls of the car wash building to make room for more tires. He continues to work on the site of that original store and is the company’s most expert tire technician on any size tire, from passenger to truck to farm to off-the-road tires. Schuessler works in the corporate office. He supports the retail operations and also helps with inventory issues. If there’s an inventory problem, he finds it and fixes it.
When Klipfel and Schuessler started, Scott was not yet 5 months old. They’re among the 19 employees with at least 20 years of service to the company.
“Obviously we wouldn’t be where we’re at without great employees,” Mark says. “That’s a big part of the honor of us being named Tire Dealer of the Year. All of the employees can share in the recognition, because they’re on the front lines every day making customers happy and making things work. We’ve got great employees, management and family. It’s a true team effort with all those people.”
Plaza Tire recognizes employees’ service to the company with awards and plaques on significant anniversary dates. But when the first employee hit the 25-year mark, the company wanted to do something special.
James “Peto” Williams was the first to receive a gold Plaza Tire ring. As employees notch another five years of service, the company gifts them with another diamond for the ring. When Williams died in 2011 he had served Plaza Tire for more than 30 years.Mark and Scott are proud of the relationships they’ve maintained with long-term employees.
“I think we’re very good at keeping people. It’s hiring the right person at the beginning and having them grow with us,” Mark says.
“Every time I get ready to hire somebody, I think about how I want to hire the right guy, because I don’t want to have to end a relationship with anyone either. If you hire well at the beginning you don’t have to face that.”
And even though the industry talks a lot about a shortage of technicians, Scott says it’s just as important to focus on good managers.
“You have to figure out a people pipeline and stack a bench. You have to have good techs and good shop people, of course, but if you have strong managers, they will hire good people. They will seek out the good people.” He says it’s the company’s responsibility to provide the tools to recruit good employees: access to training, the potential to advance with the company, plus benefits.
“We’re not competing for people just within our industry. We’re competing for people in lots of industries. People with a good work ethic have a lot of opportunity.” In Cape Girardeau and the surrounding region, Plaza Tire’s biggest competitors in hiring are the medical sector, plus other retailers.
Competing with tire manufacturers
Competing for employees is one thing, but competing for tire sales is another. And the revolution of tire manufacturers entering the direct-to-consumer segment online is troubling.
“It’s reality,” Mark says. “But on the other hand I don’t like them telling me who I can sell and who I can’t sell. If I was playing devil’s advocate, I’d say if they can sell tires on the internet how can they tell me who I can’t sell to, which is what some of them are doing. They’re sending out letters and saying you can’t sell tires to this company or that company, but then they turn around and do it.
“They tell me I have to buy so many tires a year, but they don’t want me to sell them through a certain channel. But they’ll sell through that channel and then those people are selling that tire in my market.“If you’re going to sell those tires online, you should reduce the amount of tires I have to buy.”
The issue really isn’t a new one in the industry, Mark admits. “I didn’t like it when they started selling straight to car dealers either. I still don’t like it. We were selling those people tires, too, and now manufacturers that we’ve been buying tires from have opened up competitors in our towns by selling to car dealers directly.”
Plaza Tire currently isn’t an installer for any tire manufacturer’s online selling program. It’s not a Recommended Installer for Tire Rack Inc. either. But the company’s stores will install tires for any customer. “We like to make them our customer,” Mark says.
“We have great relationships with our manufacturers. None of this is antagonistic. Do I disagree with them on how they do things? You’re damn right. If I think it hurts Plaza Tire’s business I’m going to speak up.”
An evolution of online sales
Plaza Tire knows it might have to adapt to joining those tire installation programs one day. It has already adapted how it handles its own online tire selling platform.
In the beginning the only way to get an online quote for tires from Plaza Tire was to submit a request online. But more than five years ago the company changed its ways. Now customers can compare prices. They start by selecting which store they want to visit, and then input either their vehicle information or tire size.
Mark says, “You have to think about the concept of why people go online. Why would people take the time to go online if they didn’t want to see pricing? That’s my opinion.”Scott agrees. He’s seen it in his own shopping habits. “I find myself wanting to buy more stuff online and expecting to find pricing. I don’t like that, because I’m a big believer in buying and shopping locally.”
Don Francis spent five years managing a Plaza Tire store before he moved to the corporate office as the project manager. His job now is to jump from one special project to the next. But he remembers well what it was like to stand behind a sales counter and have a customer come in and ask to have tires they purchased online elsewhere installed.
“My attitude in the very beginning was not good about it, because they didn’t buy them from me. There was a little ego involved. But then I realized they have the whole rest of the car that I can work with.
“My attitude has evolved into making a friend out of that person instead of worrying about them saving $60 when they bought the tires,” says Francis. “I can get that $60 back pretty quick if I just take care of that customer.“People online can’t go out in the parking lot or the driveway and see their car. I can say ‘I see something you might want to get looked at.’
“You can’t stop the trend of people buying tires online, but how can you make the most of it? When people are calling you, at least half of the people don’t know what size of tire they use. They really don’t know enough to go online and buy tires without some degree of research.”
Data mining: the new frontier
Francis and McMillan, Plaza Tire’s marketing manager, work together on a lot of projects. “Our roles overlap a lot,” McMillan says. They both can see a big future in data.
“I think data mining is the frontier ahead of us,” Francis says. “How can we take years’ worth of consumer behavior and start to analyze it?”
Here’s an example. “Why are people buying certain service products that we offer on certain days or even certain times of the day? Or why is this store very successful at doing certain things that other stores aren’t? We can research what they’re doing and implement it elsewhere. There are all kinds of things like that, if you’re paying attention.”
McMillan says, “Stores don’t probably have enough of a macro view to put it all together. You have to take a higher level approach to get there. We have all these locations and transactions, so you start to have enough of a data sample.”
Two years ago while focusing on the company’s online reviews, Francis realized that the store with the second-highest number of reviews submitted had the highest customer satisfaction rate. “They were leading the pack.”
So he dug into those reviews, and saw over and over again customers were mentioning store employees by name. They were establishing a personal connection.
“They probably knew the customer’s name when they walked in the door and people are impressed by that. For some people, that comes really naturally for them to do that; others have to work real hard at it.”
Noticing that spilled into human resources, he says. “How can we select more of those people and get them into those positions? We’re doing OK like we are, but we want to keep raising the bar and get more intentional.”
The data also has helped the company identify the biggest cause of customer dissatisfaction.
“It’s clear it’s communication related,” Francis says, so store employees need to be more patient and more intentional with their communication. “Work a little harder and be a little more straight up, a little more considerate, a little more transparent. Usually if you communicate with people like that, they’re pretty good about not beating you up later.”
Mark sees time as the most critical factor. “A high percentage of the dings are ‘you didn’t get it done in time.’”
Sometimes it’s as simple as not telling the customer when a second problem had to be investigated, or another part had to be ordered and it’s going to take an extra 30 minutes.
“If you tell a customer it’s going to be an hour, it needs to be an hour. If you tell them it’s going to be $100 and it’s $105, he may not say anything to you, but in the back of his mind he’s thinking, ‘you told me $100.’”
Buying groups offer benefits
Data mining might represent the future of the tire business, but Plaza Tire still sees plenty of room for the tools that have helped tire dealers for decades. That includes membership in buying groups.
Plaza Tire is among the founding members of the 21-year-old Tire Alliance Groupe LLC (TAG), and Mark is the group’s current chairman. He’s also chairman of the SURE Tire Co. buying group, of which Plaza Tire is a member.
“Mark has gotten involved in the management of TAG over the last several years,” says CEO and President Paul Alves. “Although this was new to him, his levelheadedness as we continue to grow as a group has been very helpful.”
With TAG, Mark says the benefit comes from the relationship among dealers. He looks past the fact that in some cases, fellow TAG members are his competitors.
“Competitors will teach you a lot of lessons, good and bad. It’s not uncommon in any of those relationships to learn what works for them, and share what works for you.”
Plus, membership helps leverage purchasing power, which is something any tire dealer can appreciate. Even with 62 stores and 130,000 tires in his warehouse, Mark doesn’t think it’s possible to outgrow the benefits of a group.
“You never know what specials are out there,” he says.
“We may get a deal because of our relationship with the manufacturer. We may get a special because of our size. We may get one because we’re part of the group. I think it would be some of each. I don’t think it’s clear cut.
“Growing up in the business and being part of TAG, Larry Morgan and Tom Gegax were part of the group when I was just getting started in the business, so these are people who you learn things from,” Mark says.
(Morgan and Gegax, from Morgan Tire & Auto Inc. and Tires Plus, respectively, are both former winners of MTD’s Tire Dealer of the Year Award.)
With SURE Tire, Plaza Tire holds the exclusive rights to the Summit brand of tires in its territory. That’s an especially helpful benefit for Plaza Tire’s wholesale business, Mark says.
Snapshot of a store
Rob Millsaps manages the Plaza Tire store on the north side of Cape Girardeau. It’s near an upscale, residential neighborhood.
“We’ll probably have two or three appointments a day, but we’ll see 65 cars a day,” Millsaps says. “Eighty percent of our business is walk-in business.”The store, which opened in 1995 and was the second Plaza Tire store to open in the company’s hometown, sells 600 to 700 tires a month (half its inventory) and does $1.9 million in business a year, Millsaps says.
The store also provides some auto services for two used car dealers and one new car dealership nearby.
‘They are forward thinking’
One big asset to Millsaps’ alignment business has been the use of Hunter Engineering Co.’s Quick Check inspection system. About a third of all Plaza Tire stores have some version of the system that checks a car’s alignment, brake system and tire tread.
The Quick Check lane at Millsaps’ store is designed to check a vehicle’s alignment. Plaza Tire has set up screens in its customer waiting areas that show the results of each inspection as it’s done. Millsaps says the system helps sell alignments “at the beginning of the sale.”
Larry Watson is the Midwest division manager for Hunter. He says the equipment company has a long-standing relationship with the Rhodes family, and that Plaza Tire was the first independent tire dealer in the nation to install the Quick Check equipment in its stores. “The one thing about Plaza Tire is they are forward thinking. They’re not scared to invest in technology to differentiate themselves from the pack.”
Plaza Tire had at least a three-year head start on any other independent dealer using the Quick Check technology. It also was the first to install large windows and flat screen monitors in its showrooms so customers could watch the inspection as it happens, he says.
“There are a lot of tire dealers who feel like ‘we’ve done it like this forever.’ But if you’re not careful with that mentality, you can be outpaced,” Watson says. “(Mark and Scott) have always got their eyes open, always willing to try new things, but at the same time they try to stay consistent with their values. They’re not all over the place.”
Every new store Plaza Tire that has opened within the last five years has been built with a bay dedicated for the Quick Check system, and the company has retrofitted their busiest existing stores to add it as well, Watson says.
“You’ve seen Plaza Tire adopt new ideas and build stores. You see them growing. You look at the other regional chains in their area and they’re not keeping pace.” ■The Next Generation Steps Up: ‘It’s Their Choice,’ Says Mark Rhodes
Both Mark and Scott Rhodes grew up in the business, and had to work their way up. They see a similar path for the next generation. Mark’s two oldest children, sons Sam, 22, and Zach, 20, have already started working for the business, as has a nephew, Casey Holloway, their sister Kelly Holloway’s son. They start in the warehouse, in the service department at a store, or behind the sales counter.
Mark also has a young daughter, who turns 6 this month, and Scott’s children are young, too. Scott says right now their idea of working at Plaza Tire is riding on a forklift and raiding the vending machines.
Sam earned his undergraduate degree from the University of Mississippi in the spring, and has returned to campus this fall to complete a one-year MBA program. Zach is a junior at the University of Missouri.
But Mark is cautious in trying to envision how the next generation takes its place in the business. He doesn’t want his sons to think they have to follow in his footsteps.
“It’s their choice,” he says. “If they choose to be part of it, then they have to understand that it can be very hard, and very rewarding.”
Scott understands the difficulty Mark is facing. As Scott was preparing to graduate from college in 1995, his friends were getting recruited to companies and moving to new places. It sounded more glamorous than staying in his hometown and working for his dad in the tire business. He talked to his dad about it, and remembers “those were not always great conversations.” (Mark on the other hand, can’t imagine ever doing anything else. In fact, it took him more than 10 minutes to answer this question: “If you could be anything but a tire dealer, what would you be?” Read his response on page 52.)
Scott says his dad “never really understood why you wouldn’t want to do this. There was not a day my dad did not look forward to coming to work. The older I get I have more appreciation for it, which I think is common. He viewed it, and we do, too, as we work with our friends, our suppliers. Our employees become our friends and part of our family.”
Plaza Tire Averages 4.7 Stars Out of 5.0: Online Reviews Provide a Playbook for Stores
Four-and-a-half years ago when Plaza Tire Service Inc. turned its focus to soliciting online customer reviews, Don Francis was uneasy.
“In the beginning we were leery of the whole review thing. We thought people were only going to post reviews if there was something they were concerned about,” says Francis, who has spent the last five years working as a project manager for the tire dealership. “We found it was just the opposite.”
Tens of thousands of reviews later, Plaza Tire’s 62 stores average a 4.7 rating on a five-star scale.
Initially the company worked to publish those reviews on its own website. Its customer relationship management (CRM) software sent an email to customers after they visited a store, and reviews were posted on the company’s website by store location. Francis says the company averages 700 reviews a week.
The only problem is, those reviews aren’t also showing up on Google.
“Knowing that Google pretty much owns the market in search, we decided to expand our focus and start looking at Google reviews as well,” says Brian McMillan, director of marketing for Plaza Tire.
Despite having thousands of reviews direct from their customers, McMillan says there weren’t many reviews posted directly on Google. So the company invested in another tool, and now customers who provide a cell phone number at the time of service are sent a text message asking for a Google review. Those who provide a landline (the software can detect which is which) are still sent an email with the same request.
Fast Facts About Plaza Tire History
• Why is it called Plaza Tire?
The original store was located across the street from the Town Plaza shopping center. The name defined where it was.
• Why is everything green?
Pee Wee Rhodes had three mismatched trucks. Two were green, and one was red. It was cheaper to paint the red one and make them look consistent.
• When did your dad retire?
“He never retired to the golf course or Florida. He worked until about a month before he died (on July 29, 2011),” Mark says. “My father was a deal maker. He liked to make deals, whether it was buying a tire store, buying a piece of real estate or buying a truck; it wasn’t the size, it was the thrill of negotiation.”