3 Questions with VIP Tires’ Tim Winkeler
Paying Higher Wages Is a ‘Philosophical Line in the Sand’
VIP Tires & Service brought its entire management team under one roof for the first time in two years this fall.
The Lewiston, Maine-based company — which is one of the 20 largest independent tire dealerships in the United States, according to the 2021 MTD 100 — hosts an annual managers conference for its store, regional and district leaders, where it lays out its game plan for the year to come.
In the midst of various classroom sessions, MTD sat down with VIP CEO and President Tim Winkeler to talk about the pressures of recruiting, opening new stores and expanding the company’s services for fleets.
MTD: Recruiting and retaining employees is such a pain point for businesses of all kinds right now, including tire dealerships. How does that picture look at VIP and what strategies are working for you?
Winkeler: This year Gary MacCausland, (our) senior vice president of operations, launched an enhanced compensation program for our entry-level positions. What the industry would call a tire and lube tech, we call an installation tech.
We’ve always had a four-step program (for entrants to move up), including ASE certifications. We just added enhancements to that program. We raised that rate. It’s now $15 minimum. Then they have bonus opportunities to make $16, $17 or $18 an hour.
Our minimum pay went up from $14 to $15 an hour. None of the states (we operate in) had gone up to $15 yet. I’ve always said I never want to be at minimum wage. We should be paying a premium. That’s a philosophical line in the sand for us. We’ve always been ahead of it.
We have about 70 more associates today than we did a year ago. When many other companies were doing lay-offs and furloughs last summer, we were hiring. We quickly went on the recruiting trail and were able to add a lot of great talent.
There were some new store positions we needed to fill, but even in existing markets we were pretty aggressive to find great talent who might be looking because maybe their employer didn’t treat them so well last year during the slower months.
We didn’t maximize profits this past fiscal year because we were carrying a lot of payroll. And that was strategic.
Even though the business was COVID 19-slowed a little bit, we carried extra payroll through the winter months, knowing that vaccines (were coming and) people were going to want to get out and drive.
The economy was going to boom is what all the forecasters were saying, so we wanted to be the company that was best-positioned to take advantage of the boom when it happened. So we did everything we could to retain employees and we did everything we could to bring on additional talent.
MTD: VIP has been steadily growing its store count and expanding its footprint in New England in recent years. Is the “people problem” slowing down your company's growth?
Winkeler: We opened five new stores last year. Across 65 stores we’re probably about 40 to 45 people short of where we’d like to be. We have challenges and positions we’d like to fill. I’m of the mindset that’s always going to be the case when you’re growing.
We’re by no means shorter- staffed than we’ve been in the past. I think it’s because we had our foot on the gas pedal from a people standpoint last year.
One of the toughest areas we’ve found for recruiting is Burlington, Vt. I’m guessing at the reasons — we have three colleges, lots of people with degrees and fewer people growing up working on their own cars.
Burlington was a market we didn’t serve very well, but it’s where 60% of Vermonters live. We knew it was going to be a long road to build the business we want there and it was going to be more challenging from the people standpoint. But we have a lot of confidence in our team, in our district managers and our two regional guys. We know what to do. It’s just a matter of doing enough of it. In that market, it just takes more work.
We tend to recruit really well in areas that are just outside the city because you have somewhat of a rural approach and people learn how to work on cars.
In the city of Portland, Maine, we don’t have many employees who live in Portland, but we have lots of employees who live west of Portland. Burlington is in the same situation. We are having success. It’s just more challenging. It’s taking more work to find those people.
We’ve opened five stores. We’ve got three or four in the pipeline for the next 12 months. We have decided at the front end of the funnel to slow down just a bit. Our forecast is always that a new store isn’t profitable on day one. There’s always a ramp-up. During COVID-19, that made new stores more difficult.
We also opened some of those new stores in markets where we didn’t have a presence in the past — in markets where we didn’t have brand recognition. So our new store results were slightly below our expectations and because of that, we’ve decided that we don’t want to push too hard and grow too fast.
MTD: Tell me about your relatively new fleet program. How does it fit into your existing model? Is the goal to offer fleet services across your entire geography?
Winkeler: Absolutely. We are in so many rural markets, it will be interesting to figure that out as we go on.
Our first foray into (fleets) was two years ago. Bill Galant is our director of fleet sales. We started with a focus on the greater Manchester, N.H., area. We have six or eight stores that he can really feed into. It took him a while to figure his way through and get it done.
Cold-call selling is never easy, but he’s learned lessons and he’s done a great job of really helping grow our presence from a fleet perspective. Over time, those customers have transitioned a lot of their communications to the service managers at the stores (where they get service.)
We have two more positions that we wanted to add, (including) one in Massachusetts, so that’s six stores, and we have a position for a fleet sales manager in the greater Portland, Maine, area. We have nine stores in the greater Portland market.
I’ve heard from other dealers who have gone big and hired five or six people at once and they’ve made a big splash, but then they typically end up thinning the herd. I didn’t want to go about it that way. I wanted to add slowly.
Our seven-day-a-week model fits great (with fleets.) They drop off vehicles on Friday after the last appointment or last route and pick it up Monday morning. That gives us Saturday and Sunday to work on a vehicle or vehicles.
You don’t have to discount much. They’re not looking for the cheapest. They’re looking for who’s going to service them the best — with the best quality. They want to make sure when they put money in that vehicle, it’s going to be done right. More than anything, they’re looking for you to do it on their schedule. They’d rather not do repairs. They’d rather do maintenance ahead of time.
One of the things I love about our seven day-a-week model is that it gives our assistant managers two days (during which) they get to run the store. Our managers only work five days a week, so for two days a week, the assistant manager is the manager on duty. That’s how we groom.
We give our assistant managers a chance to beat expectations. That goes back to our culture of always helping people get better, get promoted and always move ahead.
Working on Culture: VIP Tires’ Store Managers Swap Best Practices, Support
When VIP Tires & Service brought together its 100-person management team in September for the dealership’s annual managers conference, it was more than just a return to normal programming since COVID-19 upended things. It was a boost to the culture that VIP creates for its employees.
The company’s leaders talk a lot about culture. That includes CEO and President Tim Winkeler. They want employees to feel like they’re part of the team — and that it’s the team’s job to serve consumers and solve problems.
“There are a lot of benefits to being as big as we are, but we also operate smaller when it comes to relationships,” says Winkeler.
VIP Tires’ culture is built around transparency. The company shares everything — from financial results to customer feedback from company-wide surveys — with its workers.
Goals are built around core strategies that don’t change from year to year, such as investing in the VIP Tires team and focusing customer engagement on a five-step action plan.
Winkeler says bringing every store manager together, alongside their regional and district leaders, for a couple days of training and fun helps cement the team energy around the dealership’s common goals and strategies.
“These managers are the leaders of their teams. Whether they’ve got seven, 10 or 15 people, they’re the ones leading and doing the things to help that business run. We give them a lot of freedom to run it like it’s their business, but that can get a little lonely.”.
Bringing employees together builds connections “because no one can appreciate what you do like someone else who does it, too.”
Managers sit next to each other in training sessions and trade stories over meals. They discover common problems and learn fixes from someone who might be a few steps ahead.
They also learn practical things, like troubleshooting common vehicle service issues.