Voices of experience: Top tire dealers share advice on everything from recruiting employees ('steal them') to running a single-store business ('specialize')
For the last several years, the Tire Industry Association's "Successful Tire Dealers Share Their Secrets" panel discussions have provided attendees with a wealth of useful information in the form of real-world advice and experience. Last month's sessions were no different, as some of the industry's best and brightest readily offered counsel on a wide range of important topics.
The seminars were moderated by veteran tire dealer Don Olson. Attendees enthusiastically asked questions and swapped ideas with the following panelists:
Day one: Brett Matschke, Richlonn's Tire & Service Centers, Greendale, Wis.; Don Dobbs, Dobbs Tire & Auto Centers, High Ridge, Mo.; Gary Wright, Nebraskaland/Kansasland Tire, Lexington, Neb.; Nick Hodel, Northwest Tire Factory, Portland, Ore.; Jim Pangle, Fountain Tire, Edmonton, Alberta; Tom White, Tire Source, Akron, Ohio.
Day two: Tony Vetter, Northwest Tire, Bismark, N.D.; Paul Weaver, Southern Indiana Tire Inc., Evansville, Ind.; Mel Dobrin, Butler Tire Co., Marietta, Ga.; Barry Steinberg, Direct Tire & Auto Service, Watertown, Mass.; Tim Seehusen, Hopkins Firestone, Hopkins, Minn.; and Steve Craven, Craven Tire & Auto, Fairfax, Va.
On recruiting for skilled positions:
Dobbs: You have to take it upon yourself. If we see a bright person, we'll steal him or her. In our business, you can't use a headhunter very successfully.
Matschke: We've had success working with local tech schools and colleges. It takes getting to know people at these facilities.
On how to keep salespeople:
Dobbs: We have a desire to keep everyone happy. They have the feeling they can talk to us.
Hodel: You have to treat them fairly. Our stores are more like franchises; I don't hire and fire store managers, but I hire some staff at our distribution center. We look at what the industry is paying and pay a little more.
Dobrin: In our stores, we have profit sharing. It's in increments and goes into a pool.
Vetter: The bottom line is, 'How much money do they make?'
Steinberg: I pay every employee at least 20% to 25% over scale. It works pretty well.
On the profitability of automotive service:
Wright: Your return on service is much higher, but I also know dealers who sell only tires.
Hodel: We have some stores that do zero service and some stores that do up to 50% service. Normally, the stores with higher service numbers have higher gross profits.
On selling accessories:
Wright: You have to decide who your customer base is going to be. It boils down to your commitment.
On selling tires via the Internet:
Hodel: It's smart to have a Web site. People 27 and under use the Internet like older folks use the Yellow Pages. The stores tell me they're not selling tires on the 'net but are getting inquiries. We get 2,500 hits a month.
Matschke: Statistics show that a large majority of buyers still rely on a salesman's recommendation.
On the performance tire/custom wheel business:
Hodel: You need people to enjoy that side of the business. I have guys my age who would rather not look at it and we have stores that thrive on it.
Craven: You need somebody who's really into it, maybe a young guy or gal who really loves cars. Create enthusiasm and your reputation will grow.
Dobrin: Wheel displays are important; you need to have them.
Seehusen: Wheel displays are a huge deal. Customers want to see wheels and touch them.
Steinberg: Every tire should be mounted on a real wheel. A plastic hubcap doesn't work anymore.
Dobbs: We dedicate 5% to advertising. We work with an agency that recommends how to spend that money intelligently. In our market, we see newspapers as being less and less productive. TV is the most productive but it's very expensive.
White: We do a lot of database marketing and pull information from our customer base. We use direct mail as well.
Pangle: We do a fair share of research and find that newspapers give the biggest bang for our buck.
On improving customer service:
Matschke: It revolves around the basics -- making sure we communicate with customers and following through to make sure we do more than the customer expects. It's not the big things that make customers come back; it's the little things.
White: Make them feel comfortable. We send out hand-written thank you notes to every customer.
Dobbs: At our company, the store manager is charged with keeping the customer happy at all costs. We give them the flexibility to do it.
Steinberg: We never say, 'No.' We offer free loaner cars, free road hazard on certain products -- but what works best is that each of my 83 guys is empowered to make a decision. And I'll never question a guy for making a decision.
On securing repeat business:
Craven: We do extensive database marketing. We send flyers and newsletters to customers on a regular basis.
Steinberg: When we get complaints, I call every single customer personally. If you don't communicate with that customer, you may never hear from them again.
On store image:
Vetter: One thing we don't want to do is look like the competition. We put in a room where customers can use the phone while they wait. At one point, we had toys for kids.
Steinberg: I'm a strong believer in having almost too many people. There have to be enough people to work with the customers.
Dobrin: Your service department should play a big part. We have (windows) in our showroom so people can see what we're doing. Your techs should be clean and your equipment in good shape.
On selecting a new location:
Dobbs: If you want to be in an upscale neighborhood, we've learned that the return on your investment will be much higher.
White: Make sure you do your demographic homework.
On opening a second store:
Wright: Going to two wasn't so bad. But when we turned the corner and opened a fourth store, I quit being a store manager.
On renting vs. owning locations:
Wright: Our preference is to own our locations. But we also lease locations because that was the better option at the time.
Pangle: We like to own a lot of our locations, but if you're going to plan a big expansion, sometimes you'll have to lease.
On how many tires to stock in a new store:
White: We opened a store a year-and-a-half ago and started with 900 tires in inventory. We stocked the bread-and-butter items.
Pangle: We try to project what our sales will be and stock enough for a minimum of four turns that first year.
On the future of single-outlet dealerships:
Dobbs: It will be very difficult to operate as a single facility. You have to associate yourself with some type of group.
Hodel: The best thing you can do is specialize. The Goodyears and Michelins of the world aren't looking after the smaller guys. The little guy is going to have a tougher row to hoe.