Good guys finish first: Tire Dealer of the Year, Tom Raben

Sept. 1, 2002

You can't build a successful tire dealership without a solid foundation. And you can't maintain success without setting goals and working toward them. These statements may sound like cliches. But to Tom Raben, they're rock-solid principles that have helped him transform his dealership, Raben Tire Co., from a small service station into a Midwestern retail/commercial/retreading powerhouse with outlets in six states.

Raben operates his business based on the following objectives that are posted at Raben Tire headquarters in Evansville, Ind., and the company's 33 locations:

1. Our goal is to provide customers with products and services that exceed their expectations and exceed those available from the competition.

2. Our goal is for each of us to conduct ourselves in a manner that reflects a professional image.

3. Our goal is to create an upbeat atmosphere in our stores through ambitious and enthusiastic employees working together productively.

4. Our goal is to ensure the safety, training and skills of our employees for their good and the good of our company.

5. Our goal is to achieve a fair profit in all of our operations and provide a fair wage to all of our employees.

6. Our goal is to foster the growth of our company in such a way as to benefit our customers and provide a solid future for our employees.

7. Our goal is to build lasting relationships with our suppliers based on competitiveness, values and the mutual respect of objectives.

Adherence to these tenets has earned Raben the respect and admiration of customers, suppliers, employees, and peers -- and Modern Tire Dealer "Tire Dealer of the Year" honors. But there's more to his phenomenal success than meets the eye.

"The biggest asset we have is not on our balance sheet," says Raben. "It's our people. From the person sweeping the floor to our management teams, I have been blessed with wonderful people who sincerely care about our customers."

Chip off the old block

"We need to make the customer happy," says Raben. "We need to make sure customers get 100% of what they thought they were going to, and then some. If every one of our customers is treated like a friend, they'll be back.

"The customer is the king of the deal. If we're not pleasing him or her, then we have one foot on a banana peel and the other on a roller-skate."

This philosophy, which permeates every level of Raben Tire, stretches back to 1952, when Raben's father, Henry "Butch" Raben, bought a single-location service station in downtown Evansville from his brother-in-law, Bernie Flittner. Prior to entering the tire business, he had supported his wife, Evelyn, and young family by driving a potato chip delivery truck.

The entrepreneurial spirit was deeply embedded in Butch. His grandfather, Anthony, had settled in Indiana during the 1850s, working as a barrel maker, or "cooper." He later opened a prosperous general store in St. Wendel, Ind., that was passed down through the family.

After buying the service station, Butch began to focus on tire sales and service. His reputation as a fair businessman spread throughout the community.

But it was Butch's generosity and concern for others that really set him apart, Tom says. Once, a customer who owed him a significant amount of money died unexpectedly. Butch immediately sent a letter to the man's widow canceling his debt.

He often let a cash-strapped customer roll off the lot with a new set of tires, not sure if he'd ever receive payment. Sure enough, sometimes that was the case.

"It's amazing how many older people tell us they bought their first set of tires from dad when they couldn't afford it," says Phil Raben, who is four years Tom's junior and was two years old when Butch went into business for himself. Phil now handles operational systems, purchasing, software and other responsibilities for Raben Tire.

"He made a point to know people," says another brother, Mark Raben, 47, who oversees the dealership's passenger and light truck tire sales. "We still have customers coming in today who say they knew him.

"Occasionally, the phone still rings somewhere for Butch, and he's been dead for 30 years."

Personal integrity -- and a good sense of humor -- were qualities the elder Raben held in high esteem, according to Tom. "I remember one Saturday after we closed down the store, he and I went to a little tavern. We sat down at the bar and the first guy sitting next to us happened to be a friend; dad tells the bartender to get him a drink. The next guy who sits down, dad says, 'Get him a drink.' He skips a guy, then buys two more people drinks. I say to dad, 'You didn't buy so-and-so a drink.' Dad says, 'I know I didn't. He cheats at golf!'"

"You can't betray those principles," Mark adds.

Good start

Tom, a lifelong Indiana resident, describes his childhood as pretty close to perfect. "Being one of 13 kids, it was a great childhood. All the things that parents are supposed to give you we had in abundance.

"My mom and dad were a beautiful couple. They dated every day of their lives." Tom's mother spent most of those years as a homemaker, but later worked in the family business. She is now retired.

Tom started tagging along with his dad to the tire store while in elementary school. "I remember going in with him on Sundays to do things he couldn't get done during the week, like going through old casings, finding out what could be sold, things like that.

"I can remember being put in a stack of tires headfirst (by employees as a prank). I liked the people who worked for my dad. I liked coming to the shop."

At first, Tom's responsibilities included changing tires using tools that, by today's standards, were primitive. "We had three scissors lifts, and I mounted tires after school, on Saturdays and through the summer. We didn't sell shocks or brakes or anything else like that at the time.

"We used four-way lug wrenches. It was like a race to see who could get it done the fastest."

He also repaired tires. "I was 10 years old before I realized my name wasn't 'Patch This!'

"Dad was a tough boss in that he wanted things done right. But he was fair. He wasn't unrealistic in what he expected. If you screwed up and he got on you, it only involved what you screwed up about. It had nothing to do with (personal) relationships.

"We still have that today with our employees. We can discuss things."

Tom worked part-time at Raben Tire while attending nearby Mater Dei High School, where he played football and golfed. He graduated in 1964.

By his freshman year of college, Tom was making commercial sales calls, helping out with group sales and wholesaling tires to gas stations. "I loved doing that," he says. "The people you called on became your buddies."

Tom met his wife, Clara, while on the job in 1965. "She was working as a receptionist for a company that had a past-due bill. I went in one day to see her boss and I asked her out. I thought she was cuter than a speckled pup under a red wagon." They married in 1967. Their first child, Brian, was born one year later.

By then, Tom had dropped out of college to devote more time to the family business, working alongside his brother Phil. He also started a National Guard stint around that time.

Things were going well for the Rabens. Then tragedy struck.

Butch died unexpectedly in 1972 from a heart attack, leaving his wife, Evelyn, and a house full of children -- ranging from grade school to high school age.

Tom's life soon changed.

Big shoes to fill

Following their dad's death, Tom and Phil took over the day-to-day operation of Raben Tire. And Tom, being the eldest, assumed responsibility for the family's welfare.

Making the transition from employee to boss in such a sudden manner was frightening, he says. The brothers no longer could fall back on their father's advice. "We had to make the decisions and they were ours. We didn't have that resource, that mentor.

"We knew we could (do it), we knew we had to, we knew we wanted to. But it was scary until we felt secure in our own abilities."

They had a lot of help from their uncle, Stan Flittner, who had been with the dealership since his older brother, Bernie, owned it. "Stan was a fantastic guy, a great salesman and a big help. Other folks who worked for dad stayed with us for quite a while. His secretary stayed with us until she retired."

Tom and Phil's younger brothers started working for the company full-time during the 1970s. "They were a big help. Each carried a different skill set to help make a difference."

At first, Tom's plan was to pay the bills, stay profitable and keep Raben Tire going. But he also wanted to expand the business. "We wanted to make the pie big enough for everybody," he says. "You can't have people come in and slices get smaller.

"I remember Phil and I standing outside the downtown store the day after dad's funeral and almost making a pact that we'd make the business into something he'd be proud of. Today, I think he'd be proud of how this family has worked together."

All for one, one for all

Raben attributes his success to the efforts of his family. Aside from Phil and Mark, three other brothers work in the business.

Larry Raben, 46, supervises the dealership's commercial truck and farm tire division; James Raben, 40, oversees new location openings and consumer affairs; and Jon Raben, 38, helps oversee the company's wholesale department. Another brother, Jeff Raben, 43, operates his own company, Mine Wheel, which manufactures custom wheels for mining and earthmoving equipment.

Three "honorary brothers" also help chart the company's direction: Larry Noah, who has been a Raben Tire partner since 1980; Herman Lintner, managing partner of Raben Tire's operations in Missouri and Arkansas; and Jason Reffett, the dealership's controller. (None of Tom's six sisters are currently involved with the dealership.)

"We work great together," says Tom. "Our relationships are more than work relationships. We're all friends. And we have a high level of trust that's well-deserved."

Major decisions at Raben Tire usually are made by committee. "We'll throw (an idea) out and talk about what's going on. Somebody will be the devil's advocate, and frankly, if that person with the idea can't sell it, it doesn't happen."

Tom leaves decisions at stores up to the people who manage them. "You have to support them with training and infrastructure, but they have to know when to zig and when to zag," he says. The main office provides outlets with inventory and other items, but most administrative functions are centralized to free-up the managers. "We have an accounts receivable service, a department that takes care of credit for them, human resources, payroll -- all the stuff that gets in the way of doing what they do best: taking care of the customer."

Raben Tire also provides TV, radio and print advertising that store managers can tailor to fit their individual markets. "Your best people don't want you to tell them how to do everything," says Tom. "We give them the basic parameters, but there are a lot of ways to get it done." If problems crop up, "then we go back to the drawing board." For the most part, things run smoothly. "I'd say we're probably guilty of giving them too much latitude."

Controlled growth

Raben Tire has 30 outlets throughout Indiana, Kentucky, Illinois, Missouri, Arkansas and Ohio, plus three retread plants.

Tom never expected the company to get so big. He never had a master plan to grow it to a certain size. But he proudly notes that Raben Tire is in good financial order, which enables him to take advantage of opportunities when they arise. "You want to stay flexible," he says.

Acquisitions represent two-thirds of the dealership's expansion over the past 30 years. Raben Tire picked up quite a few Goodyear Tire & Rubber Co.-owned stores during the 1980s "when Goodyear was downsizing from rural communities to focus on metropolitan markets."

The company also has bought out several fellow independent tire dealerships, most of them small operations. And some Raben Tire stores have been built from scratch.

The biggest market in which Raben Tire does business is Louisville, Ky. (pop: 256,000). The rest are in small cities and towns with average populations of 20,000 people or fewer.

Last year, Raben Tire opened a new, state-of-the-art retail shop in Evansville and a truck tire center in Owensboro, Ky. It also acquired a Goodyear truck tire and retread shop in Clarksville, Ind.

The company entered the Cincinnati, Ohio, market in early 2002, recently made additions to two existing facilities, and is rolling out a new 60,000-square-foot truck tire center/retread shop in Louisville to replace a nearby outlet it has outgrown.

New outlets "have to make sense from profitability and logistics support standpoints," says Tom. "Often, it's where we advertise already and our name is known. I'd be a little scared opening a shop in Los Angeles tomorrow. We'd be just another name."

Opening outlets without proper infrastructure support and financial backing is a recipe for disaster, Raben believes. "We've never said, 'We're going to open this place, but it's going to lose money for five years and we'll subsidize it.' We like to hit the ground running. Still, we've had our share of losing stores."

Retreading has proven to be profitable for Raben Tire. It entered the segment in 1978, using Bandag Inc.'s hot water, double envelope Vacuum Vulk system.

"I went to school (at Bandag headquarters) in Muscatine, Iowa, to learn how to be a retreader. I then bought used equipment from Jimmy Crews (of Tire Treads Inc. in Jackson, Tenn.), brought it back here, put it together and we were off and running."

Raben Tire now retreads 350 medium truck tires a day and is the 28th largest retreader in the United States, according to Modern Tire Dealer.

Tom was a charter member of Bandag's Advisory Council. "We met a couple of times a year and talked about issues that related to retreading and Bandag's programs. We exchanged perspectives. The guys involved were good, solid businessmen."

Raben Tire also has been on the cutting edge of computerization, dating back to the late 1970s, when MaddenCo Inc. founder Greg Madden, a fraternity brother of Phil Raben, developed a software management package for it. In fact, Raben was the first dealership to run MaddenCo's software, and still uses the company's Tire Dealer Systems today.

Distinctive marketing

Raben Tire is a household name in Evansville and is well known in other markets where it operates thanks, in no small part, to Tom's marketing savvy, particularly his use of television advertising.

Company TV spots for the past 20-plus years have featured "Ra" (pronounced "Ray") and "Ben," two zany, "good ol' boy" types originally designed to spoof Uniroyal Tire's famous Uni, Roy and Al characters.

Since then, the bib overall-clad mascots, played by two Evansville men, have taken on lives of their own.

"Uni, Roy and Al would run over ax blades with their tires," Tom says. "Ra and Ben would run over banana peels. We once did a spot with a '58 Ford; where Ra and Ben were supposed to stop, they'd slide into a barricade or ditch. Where they were supposed to negotiate cones, they'd mow them all down."

Tom also deploys Ra and Ben at civic functions. Several years ago, the company created a mobile "hot tub" by removing the roof from an old station wagon and filling the vehicle with water in which Ra and Ben would sit during parades. "We'd drive in front of a volunteer fire truck so we'd have a constant supply of water," he laughs.

"We wanted the characters to be unique. As polished as the big-time marketers were, we'd be that much unpolished. It was a contrast."

Tom usually writes the commercials, which are then produced by an ad agency.

In an effort to increase warehouse efficiency during the early 1990s, Raben designed and built a labor-saving tire stacking machine that is now used in distribution centers, retread plants and tire shops throughout the country. "One of the most ingenious marketing tools that I've ever seen was when Tom would display the stacker at various shows," says longtime Raben friend and retread industry veteran Joe Kilcoyne. "He always had some huge person dressed like a caveman with a beard showing how brute force was used to handle tires and how this caveman could be replaced by the Raben Tire Stacker."

Tom sold the rights to the Raben Stacker a few years ago. He still uses them at his locations, "though now I have to pay retail for them!"

Ahead of the pack

Most of the markets in which Raben Tire operates are small but highly competitive. The greater Evansville area alone boasts more than two dozen outlets where customers can buy tires, including shops belonging to Southern Indiana Tire Co., an independent, 22-store chain based just up the road in Princeton, Ind. Tom has no ax to grind with the competition.

"We have good competitors for the most part," he says. "You hear about places that sell tires for half their cost; we don't see that.

"We have challenges like Sam's Club and Pep Boys, but most of our competitors are doing the same things we are. They're legitimate businessmen. Of course, we'd like to have more of their business, and they'd like to have most of ours."

Raben Tire sells Goodyear, Michelin, BFGoodrich, Uniroyal, Cooper, Continental and Cavalier brand tires, "but our brand, first and foremost, is Raben."

Service -- not price -- is what sets Raben Tire apart, he says. "If it was just about price, nobody would eat anywhere but McDonald's. It's not just about price. It's about service and being there when something goes wrong. It's about doing what you said."

Unfortunately, consumers don't always see it that way, which led Tom to institute Raben Tire's "Guaranteed Lowest Price Program" five years ago. If any competitor within 50 miles advertises the same tire a customer bought from Raben at a lower price within 30 days of purchase, the dealership will pay that customer 150% of the difference if he or she brings in that competitor's ad. Tom says it's a necessary evil. "It's an effort to appeal to all segments of the retail market. We don't want to appear to be high-priced."

Raben Tire also offers its "59 and You're Out Tire Installation Guarantee," which pays customers $1 for each minute beyond 59 minutes they spend inside a Raben retail outlet while their tires are being mounted. The deal pertains to regular installation only (excluding special products like run-flat tires, for example) and is limited to items that are stocked on-site. Customers walk away with a few extra bucks on occasion, Tom admits, but the promotion has been effective overall. "We want people to know that they won't be anchored in our store all day."

Customers shopping for expensive high-performance tire/custom wheel packages are often re-directed to Wheel City, a separate store that Tom owns in Evansville. Wheel City focuses exclusively on those items, plus sport truck accessories like bedliners and covers. The high performance tire/custom wheel segment "is really a specialty business. You have to know the right fitments and (how to do) plus-sizing. You have to stock the right product at the right time. It's fairly sophisticated." Wheel City employees are specifically trained to handle every nuance of the segment, Tom says.

What really matters

At this stage in his career, the majority of Tom's time is spent "putting out fires. You might find me getting caught up on paperwork, going to sites, meeting with store managers, dealing with contractors -- there aren't two days during the week that are the same. If there's a grand opening in Poplar Bluff, Mo., I'll be there. I go with the flow, wherever I'm needed."

Being active at all levels of his business, it's tough to break away, even while on vacation. "My wife hides my cell phone battery from time to time," he says with a laugh. "But after awhile, sometimes your mind's back at work even if your body is still on the beach."

Despite his hectic schedule, Tom finds time to cultivate personal interests. He loves to golf, a sport his dad introduced him to at an early age.

"I'm a frustrated engineer and a pretty good handyman. I enjoy fixing up things, construction, building.

"When I was a teenager, my grandfather on my mom's side had terrible eyesight; he couldn't do many things though he was mechanically inclined, so I'd be his eyes. If we had a plumbing problem somewhere, we'd go fix it. Maybe it was wiring or insulation -- whatever it was, we'd work together. He taught me a lot."

Over the years, Tom has built several things for his family, including a five-person bicycle that was a staple on vacations for a number of years. He practically built his house, performing extensive stone and concrete work. "I sometimes bite off more than I can chew. Clara really gets on me. I'll work 'til two in the morning to get this or that done, and she'll say, 'You know, you don't have to do that. Go play golf!'"

While Tom's extensive duties with the newly formed Tire Industry Association (see sidebar) dominate a great deal of his extracurricular schedule, he helps out with local civic and charitable organizations when he can. In the past, he's purchased equipment and scoreboards for Mater Dei High School's wrestling team and has worked with Habitat for Humanity, a group that builds houses for the poor.

To describe Tom as family-oriented would be a major understatement. He and Clara try to spend as much time as possible with their five children and eight grandchildren. "Grandchildren are God's reward for not strangling your kids when they were young," he laughs. "We're with them a lot.

"Family is what it's all about. Most people want the same thing: a better life for their kids, a certain amount of security.

"The other stuff is important, but family is the most important. If tomorrow I would die, I wouldn't want to be at the office. I wouldn't want to be making a sales call.

"There's a balance you have to walk," he says. "You have your job, you have other obligations, you need to have some diversions, some renewal time -- it's not always equal. Sometimes you're overloaded in one area and need to get back to center. You need a certain balance, so when you go to bed at night you can say, 'I did okay.'

"One of my favorite poems is called 'The Man in the Mirror.' The guy looking back in the mirror is the guy you have to live up to. You have to be able to look him in the eye."