Why You Shouldn't Be Afraid to Rock the Boat

April 27, 2022

This MTD exclusive was provided by Dennis McCarron, a partner at Cardinal Brokers, one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com) and author of MTD’s monthly Business Insight column.

This has been the standard retail tire setup for more than 100 years - a showroom, a waiting room, a couple of service bays and some storage space, with a distribution of labor that typically includes a store manager, those who work with customers and people who work on vehicles. 

Sure, there have been updates and technological changes, like digital vehicle inspections, text-to-pay and point-of-sale improvements, but these changes are modifications to an existing platform. 

Why hasn’t the basic arrangement changed? Part of this is due to the low margins many dealers contend with. A large majority of independent tire dealers operate in the single-digit net profit margin area. This leads to tight cash flow, which then creates a “don’t rock the boat” approach to doing business. 

I believe you should rock the boat. What I mean by that is you should not be afraid of taking chances and trying something completely new. 

For context, how many tire dealerships closed their waiting rooms during some part of the pandemic? 

If you were presented with the idea of closing or drastically minimizing your waiting room during 2019, you likely would have thought that suggestion was crazy. 

How about closing on Saturdays? For some tire dealers, closing on Saturday was the best thing they have ever done for their business. It improved sales during the week, reduced overtime and the possibility of being short-handed throughout the week and greatly improved employee morale. It also helped with recruitment. What better way to pull talent into your shop by having the benefit of being closed on weekends? The possibilities are endless. 

What about offering appointment-only work, except during emergencies like flat tires? What about automating your inventory? As soon as a purchase is authorized, a small robot goes about finding the part needed for the repair and delivers it to the appropriate service bay or workspace. 

I know this may sound far-fetched, but so did not having to pick up the phone to order parts. (This function, too, has become automated.) 

Perhaps you can offer a dedicated consulting space, where meaningful conversations with customers about tire options, payment methods and maintenance schedules can happen? 

How about your online presence? Instead of just asking the customer to enter the year, make and model of his car into a form on your website, how about offering a zoom appointment feature? This way, the customer can talk to a real, live person and see their face without having to trek down to the store. 

The future of retail is quickly approaching. It is estimated that the look and feel of brick-and- mortar stores - as well as how they operate - will be drastically different in 2030 than today.  The drivers of this are options and convenience. Will we lag behind other retailers if we don’t start taking chances? 

Right now, you might offer two ways to complete transactions — either online or in person. What would an integrated process look like? Could you offer complete vehicle pick-up and drop-off services so the customer can remain at home? 

Could you put a tracking device on the car - with the customer’s permission, of course - so the customer can see where his vehicle is in the service process? Maybe you could provide text notifications as work is completed? 

Maybe you can find a way to give customers more visibility into your dealership’s service bays and what’s happening there? 

I realize it’s possible that some of these ideas won’t sit well with you. But could they sit well with your customers? 

It’s important we rethink how we do things from time to time. Tires have long been regarded as what I call a “double negative purchase.” Customers don’t want to spend money with us and they don’t always know or understand the products we sell. 

Maybe it’s time to start including customers more in the buying process in ways that haven’t been thought of yet or at least ask them if they want to be more involved?  

The next great innovation in tire and automotive service doesn’t have to be expensive, although it can be. But it must be well thought-out and it must make your customer experience better than what your competitors provide. 

When trying something new, it’s OK to fail or rethink an entire concept.

About the Author

Dennis McCarron

Dennis McCarron is a partner at Cardinal Brokers Inc., one of the leading brokers in the tire and automotive industry (www.cardinalbrokers.com.) To contact McCarron, email him at [email protected].