modern tire dealer november 2011
DESCRIPTION
Magazine for the professional tire industryTRANSCRIPT
THE INDUSTRY’S LEADING PUBLICATION
NOVEMBER 2011 • VOL. 92, NO. 11 • TEN DOLLARS • A BOBIT PUBLICATION
SPORTSMARKETETING
Budgeting for success: It’s time to prepare for 2012
OEMs package hot wheels and cool tires
Incoming President Larry Brandt talks TIA
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THE INDUSTRY’S LEADING PUBLICATION
NOVEMBER 2011 • VOL. 92, NO. 11 • TEN DOLLARS • A BOBIT PUBLICATION
SPORTSMARKETING
Playing the numbers game
Budgeting for success: It’s time to prepare for 2012
OEMs package hot wheels and cool tires
Incoming President Larry Brandt talks TIA
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3www.moderntiredealer.com
Cover feature20 Th e sports marketing trendBaseball, football, basketball, even ultimate fi ghting promote tire brands to the masses
28 (Motor) SPORTS marketing
Goodyear’s 59-year relationship with NASCAR increases brand loyalty and technology transfer
32 Hot wheels, cool tiresTh e market for UHP tires packaged with custom wheels evolves as OEMs off er more high-performance packages
36 TCi: one company, two divisionsWholesale? Commercial? Each is a profi t center
38 Making customer service part of your brand
A logo is only half the batt le. Th e author combines his training skills with the teachings from his favorite business
book to help you sell more tires and service
48 Budgeting for successTh ink of a budget as a road map to profi tability
60 Larry Brandt: TIA must growKeeping its members and the industry educated is another priority, says the incoming president
4 EditorialAre tire prices too high? I say yes. Consumers are balking at paying more and more
6 OnlineDateline: Las Vegas, Nev.: Get your up-to-the-minute show news
8 News/viewsA new Continental tire plant will rise in Sumter, S.C.: The half-billion dollar investment will pro-duce 8 million tires by 2021
18 Ludwig ReportWith gas prices down and driving levels up, expect increased tire demand
64 TPMSSpecial tools needed for the Audi Q7: New or relocated tire(s) must be initialized
66 Counter intelligence‘I have to think about it’ - Countering these dreaded words at the sales counter
68 Business insightMobile barcodes: What’s with all the little boxes? Tag code uses appear endless and are limited only by your imagination
72 Business insightPlans are nothing without actions: SalesMinded dealers know that real change is the key to execution
82 Your turnPlanning on servicing hybrids? Expect invest-ment in equipment and training to be costly, reader says
74 Products78 Quik-Link79 Classifi ed
Th e Industry’s Leading PublicationNovember 2011, Volume 92, Number 11
Modern Tire Dealer is a proud member of:
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MTD November 2011
With apologies to Bob Barker and Drew Carey, the Price is
Wrong, not Right. I’m referring to consumer tire prices, which have been increasing rapidly, and regularly, for the last four years.
From 2007 through 2010, average passenger and light truck tire prices rose 22% and 24%, respectively. Th at doesn’t even include this year.
Th ose increases coincided with skyrocketing raw mate-rial costs. Th ey weren’t always easy to pass on because consumers were not used to paying such high prices for what they oft en perceived as a commodity item.
Th ose “4 for $99” deals didn’t help. But aft er years of underpriced tires, the increases were welcome. At least grudgingly, consumers seemed to under-stand why. Perhaps all the press about the sizable tariff s on consumer tire imports from China helped.
Tire pricing can be a loss leader in the aft ermarket. Back in 1993, Tire Kingdom in Orlando, Fla., was selling a P155/80R13 for $5.95! At the time, retail tire dealers in Orlando were paying anywhere from $18 to $22 for that size, which means the retail “markup” was as much as minus 270%! Th ey didn’t make it up in volume.
From the manufacturers’ perspective, however, there are no loss leaders, unless they want to dump a bunch of tires in order to increase existing market share. Th ey have to make money, and when their costs go up, it’s only logical and fair for their tire prices to go up, too.
Is there a limit to how much they can raise prices? I think there is, and that limit is upon us. Just look at the signs.
Outwardly, tire manufacturers are off ering sweet deals to consumers through their dealers, such as “$160 off Goodyear tires,” or “up to an $80 mail-in rebate on se-lected Hankook tires.” Michelin North America Inc. says consumers can get $70 back with the purchase of four new Michelin brand tires.
Behind the scenes, a number of manufacturers are reducing prices, even on popular tire lines.
National tire retailers are using television to get their discounts across to the masses. Mike Odell, CEO and president of Pep Boys—Manny, Moe & Jack, says tire sales have been soft .
In order to combat that, here’s what the automotive parts chain was off ering via TV advertising in October.
1. Buy 1 tire for as low as $29.99.2. Buy 2 installed tires and get a free express oil
change.3. Buy 3 installed tires and get a 4th tire free (after
mail-in rebate).
As you might expect, there were restrictions to the off ers (listed in fi ne print at the bott om of the screen). Th e $29.99 price only applies to the Cornell brand, size P155/80R13. To get the free oil change or fourth tire free, the tire buyer was required to purchase a “tire installation package, road hazard warranty, valve stems or TPMS reseal kit.” And not all tire brands are included.
At NTB (National Tire & Batt ery), customers recently were able to get two tires free if they bought two, but they had to purchase the company’s “one-year alignment policy
and premium installation.”Another sign is the lack of consumer
demand. Th e state of the economy has a great deal to do with that, but I can’t help but think high prices have a lot to do with vehicle owners putt ing off their tire purchases.
Th ey will have to buy tires eventu-ally, but consumers have leverage in the pricing game — 2/32nds-inch of leverage.
I like to think tire manufacturers will take these signs into consideration
so that they don’t squeeze the independent tire dealer.Th at doesn’t mean there won’t be more price increases
soon. Some tire makers have to play catch-up with their competitors because they held off raising prices.
Cooper Tire & Rubber Co. recently announced a price increase eff ective Dec. 1. According to the company, past price increases have not fully covered raw material cost increases, so “modest” increases were necessary. Th e use of the term “modest” indicates to me that Cooper executives understand what is going on.
Still, by the end of the year, the average price of a consumer tire will have gone up another 10% in 2011. Th e average passenger tire at the retail level cost $109.71 in 2010; the average light truck tire sold for $155.79.
I can’t believe I am saying this, but for now, tire price increases need to stop. ■
If you have any questions or comments, please e-mail me at [email protected].
Editorial
Are tire prices too high? I say yes Consumers are balking at paying more and more
By Bob Ulrich
Consumers have leverage in the
pricing game — 2/32nds-inch
of leverage.
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MTD November 2011
Online
Dateline: Las Vegas, Nev.Get your up-to-the minute show news
M odern Tire Dealer editors will bring you the latest breaking news from the Specialty Equipment Market Association (SEMA) Show and the Global Tire Expo — Powered by TIA being presented by the Tire Industry As-
sociation (TIA). Th e show will be held at the Las Vegas Convention Center during the Automotive Aft ermarket Industry Week Oct. 31 - Nov. 4.
Log onto www.moderntiredealer.com to get the latest updates as they happen. We’ll off er news, executive and dealer interviews, and updates on the tires, retreading equipment, auto service products, computer programs, wheels and other products targeted to tire dealers on display on the trade show fl oor.
With more than 100,000 industry professionals in att endance each year, the show is the premier annual trade gathering for the automotive accessories industry, the associations note.
More than 2,000 manufacturers are committ ed to exhibiting and showing off their newest products, SEMA reports. Th e displays are segmented into 12 sections, includ-ing the Global Tire Expo, and a new section — New Products Showcase — which features nearly 1,500 newly introduced parts, tools and components.
“We’re excited about this new area of the SEMA Show,” says Peter MacGillivray, SEMA vice president of events and communications. “Th e section gives buyers a single place to see and meet with hundreds of fi rst-time exhibitors.”
SEMA also will be presenting more than 50 free education courses and several “pay-to-att end” educational events covering everything from truck tires, tire pres-sure monitoring systems and online marketing to customer service, management, environmental issues, industry trends and more
Check out www.moderntiredealer.com to fi nd out what’s happening. MTD editors will be reporting on the news that’s important for your business.
It’s show time, and we’re there for you! ■
3515 Massillon Road, Suite 350Uniontown, Ohio 44685(330) 899-2200, fax (330) 899-2209 Web site htt p://www.moderntiredealer.com
Editor: ROBERT J. ULRICH [email protected] Managing Editor: LORI L. MAVRIGIAN [email protected] Editor: BOB [email protected]
Contributors: Auto Service/Technical: MIKE MAVRIGIANTraining/Tire Service: KEVIN ROHLWINGIndustry Analyst: SAUL LUDWIG Art Director: NEAL WEINGART [email protected] Production Manager: KA REN [email protected]
Publisher: GREG SMITH [email protected]
South and Texas: GREG SMITH [email protected](330) 899-2200, fax (330) 899-2209
Midwest: MICHELE VARGO [email protected](330) 899-2200, fax (330) 899-2209
West Coast: JOHN DYAL Th e Dyal [email protected] (760) 451-5026, fax (760) 451-5039
West Coast: MARIANNE DYAL Th e Dyal [email protected](760) 451-9216, fax (760) 451-9292
Automotive Aft ermarket: DAN [email protected](734) 676-9135, mobile (313) 410-0945fax (734) 675-6744
Classifi ed Sales: DONNA STEWART [email protected](405) 513-6794, fax (360) 406-7576 Reprint Sales: KA REN RUNION [email protected](330) 899-2200, fax (330) 899-2209
Customer/Subscription Service: (888) 239-2455, fax (888) 274-4580
Modern Tire Dealer is a Bobit PublicationExecutive offi ces: 3520 Challenger St. Torrance, CA 90503Chairman: Edward J. BobitCEO & President: Ty F. BobitChief Financial Offi cer: Richard E. Johnson
The Global Tire Expo is part of the SEMA Show, which features thousands of trade show booths, 50-plus educational sessions and popular social events.
MODERN TIRE DEALER (ISSN 00268496) (CDN IPM #40013413) (USPS #369-170) is published monthly by Bobit Business Media, 3520 Challenger St., Torrance, California 90503-1640. Periodicals postage paid at Torrance, CA 90503-9998 and additional mailing offi ces. POSTMASTER: Send address changes to MODERN TIRE DEALER, P.O. Box 1068, Skokie, IL 60076-8068. Please allow 6 to 8 weeks for address changes to take effect. Subscriptions in the U.S. and its possessions, $65; Canadian, $99; Int’l surface mail, $99; Int’l airmail, $198. Single copies, $10, except the January Facts Issue, $30. Address all subscription correspondence to MODERN TIRE DEALER, P.O. Box 1068, Skokie, IL 60076-8068. Please allow 6 to 8 weeks to receive your fi rst issue. Please address Editorial and Advertising correspondence to MODERN TIRE DEALER, 3515 Massillon Road, Suite 350, Uniontown, OH 44685-6217. The contents of this publication may not be reproduced either in whole or in part without consent of Bobit Business Media. All statements made, although based on information believed to be reliable and accurate, cannot be guaranteed and no fault or liability can be accepted for error or omission. For your information: We sometimes make our subscriber information (i.e. fax, e-mail or mailing address) available to carefully screened organizations whose products and services may be of interest to you. If you prefer not to have your information made available, please write MODERN TIRE DEALER, P.O. Box 1068, Skokie, IL 60076-8068.
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MTD November 2011
Continental AG, parent company of Continental Tire the Americas LLC, will invest more than $500 million to build a tire plant in Sumter, S.C.,
to meet growing demand from its aft ermarket and original equipment customers.
When completed, the facility will have the capacity to produce 8 million units annually. In addition, it will employ more than 1,600 people. Th e new manufactur-ing facility will be located at a greenfi eld site off of U.S. Highway 521 in Sumter County.
“Increasing demand for Continental and General brand passenger and light truck tires in the U.S., as well as the improved business results for CTA, has made this signifi cant investment possible,” said Nikolai Setzer, head of Continental’s global tire business.
Continental has announced manufacturing investments dedicated to increasing its tire production capacity in the Americas region of nearly $1 billion in 2011.
“In addition to the greenfi eld announcement, we are also announcing an investment of more than $4 million in our Lancaster County, S.C., headquarters to help meet the needs of our growing workforce,” said Jochen Etzel, CEO of Continental Tire the Americas.
10 years in the makingSouth Carolina state, local and federal programs will pro-
vide fi nancial assistance to Continental for the project. “Somehow the word ‘big’ just doesn’t seem big enough,”
said Greg Th ompson, chairman of the Sumter Economic Development Board. “In a matt er of a few short years, this new facility will go from an idea to one of the largest economic drivers in our community.
“At more than $500 million, it’s the largest industrial investment the county has ever seen. And at 1,600 jobs, it will have an impact not only on Sumter County and its people, but on workers and families throughout the region.”
Continental’s planned time line is as follows:
• Th e company expects to begin construction of the plant in mid-2012 and complete the facility in 2013.• Serial production will begin in January, 2014.• Production of passenger and light truck tires will ramp up to 5 million tires by the end of 2017.• Th e facility will produce 8 million passenger and light truck tires annually by the completion of its second phase in 2021.
• Th e building on the 330-acre site is planned to be more than 1 million square feet.• Total hiring will be 1,700 in the state of South Caro-lina, including the headquarter expansion (fi nal hiring should be completed by 2020).
Th e move follows an earlier restructuring at Conti-nental. In June, the global auto component manufacturer announced that its biggest division will be the new Tires division.
In August, the Passenger & Light Truck Tires (PLT) and Commercial Vehicle Tires divisions were consolidated into one division — Tires. Setzer, former PLT division chief, took over the combined division. ■
News/views
A new Continental tire plant will rise in Sumter, S.C.Th e half-billion dollar investment will produce 8 million tires by 2021
“This important announcement is part of Continen-tal’s growth strategy worldwide and, especially in this case, for the U.S. market,” said Nikolai Setzer, head of Continental’s global tire business.
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MTD November 2011
News/views
TIA to NHTSA: Implement tire info programTh e Tire Industry Association (TIA) has submitt ed com-ments to the National Highway Traffi c Safety Administration (NHTSA). TIA is expressing concern over the continued delay of the implementation of the tire consumer education program, the consumer information collection methodology and the promulgation of the rules for the Energy Independence and Security Act (EISA) of 2007.
Th e goals of the Tire Fuel Effi ciency Consumer Information Program are to increase fuel effi ciency, reduce greenhouse gas emissions and increase America’s energy independence. EISA, which mandates the program, called for the promulgation of rules as of December, 2009. However, the agency has yet to issue them.
Part of the comments TIA submitt ed are that the educa-tion of consumers on the proper infl ation and maintenance of tires can begin almost immediately and be available by the beginning of 2012, and that the law must be bifurcated to allow this process to begin. Th e association says it does agree that the tire effi ciency labeling system included in EISA requires additional deliberation.
TIA assisted NHTSA in amassing data during the fi rst phase of the research process connecting the agency with tire deal-ers. However, there are serious concerns about the upcoming quantitative research phase and its reliance on data gathered via an online survey approach.
“Since NHTSA research has an especially targeted audience of consumers who are purchasing tires, conducting the question-naires in stores is the ideal circumstance,” says TIA outgoing President Mike Berra, Jr. “Online surveying has numerous issues, including its reliance on closed-ended questions. Being online is a completely diff erent circumstance than when a consumer is in an auto service shop buying tires.”
Berra says that because so many online surveys are veiled sales scams, many American’s avoid them because of a previous bad experience.
“Surveying a customer while they are in the process of purchas-ing new tires will yield more accurate results, giving NHTSA a direct, focused snapshot of the tire purchase experience,” says Dr. Roy Litt lefi eld, TIA executive vice president.
Tire dealer 20 group sets orientation meetingStrategic Alliance Group Inc. (SAG) will conduct its fi rst orientation meeting in Dallas, Texas, Dec. 5-6, 2011. Th e meeting is designed to familiarize the registered members on how the concept operates and is also designed for prospective members. Th e original 20 group-Dealer Strategic Planning (DSP) was founded four years ago and has grown to nearly 100 dealers participating.
Th ere will be presentations each day from SAG’s Alliance Partners. Att endees will be able to evaluate the benefi ts that they will bring to Strategic Alliance Group members.
Att endance is limited to 40 members/potential members. To register, visit www.sagtwentygroup.com and fi ll out the Invitation/Contact form.
SAG says that being part of a 20 group gives retail and commercial dealers enhanced advantages on planning ways to improve gross profi t, reduce expenses, re-engineer their business practices and implement management operating systems.
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MTD November 2011
News/views
Michelin Man turns 113, joins Walk of FameA stack of tires might be his only birthday suit, but the Michelin Man turned 113 Oct. 4, 2011. Th e globally recognized advertising icon is also joining the Madison Ave. N.Y., Advertising Walk of Fame.
Advertising Week’s Walk of Fame has inducted the Michelin Man as “Icon of the Year” in ceremonies at Times Center in New York City.
In 1894, the two founding brothers, Andre and Edouard Michelin, saw a stack of tires and noted that with arms “it would make a man.” Four years later, in 1898, Th e Michelin Man’s character was born, appear-ing in Michelin posters and representing the company. Today, Th e Michelin Man — sometimes called “Bibendum” — is regarded as one of the most iconic symbols in the world.
“Th e Michelin Man is much more than an advertising icon,” says Don Byrd, vice president of marketing at Michelin North America Inc. “He has become a global symbol of safety because of his longevity, his visibility among diff erent audiences and the values he represents.”
Goodyear extends NASCAR licensing fi ve yearsGoodyear will continue to supply the exclusive tires used in NASCAR’s top three racing series. Th e Goodyear Tire & Rubber Co. and NASCAR have signed an extended
agreement through 2017.Th e agreement renews Goodyear as the
“Exclusive Tire Supplier” of NASCAR’s Sprint Cup Series, the NASCAR Nationwide Series and the NASCAR Camping World Truck Series.
Goodyear says it has had an uninterrupted commitment to NASCAR since becoming a race tire supplier in the 1950s, making it one of the longest-running supply programs in any sport.
In addition, Goodyear has been the exclusive tire supplier for all three of the circuit’s top series since 1997.
“Th is extension is the continuation of a relationship between experts,” said Pierre Jambon, vice president of Goodyear’s off -highway business. “NASCAR is clearly the expert in stock car racing, and it has chosen Goodyear because of our expertise in delivering outstanding performance.”
For more information on Goodyear’s NASCAR involvement, see “(Motor) SPORTS marketing: Goodyear’s 59-year relationship with NASCAR increases brand loyalty and technology transfer” starting on page 28.
Tire Barn adds 32nd location in Fort WayneTire Barn Warehouse recently opened its 32nd outlet. It is the company’s second “Superstore” and fi ft h overall store in Fort Wayne, Ind.
Th e company fi rst entered the Fort Wayne market 23 years ago.“Our three existing Fort Wayne Tire Barn Warehouse stores perform well as a
result of the high level of customer service our great team of employees provides,” says Chief Operating Offi cer Eldon Riggs. “We thought it important to have a Superstore presence in this area to continue to provide all the quality services our customers expect from us.”
Tire Barn off ers Michelin, BFGoodrich, Uniroyal, Goodyear, Toyo, Cooper, Dunlop, Bridgestone “and other brands of choice.” Like all Tire Barn locations, prices are all inclusive, with no surprise installation fees.
Th e Tire Barn Inc. chain, run by Everybody’s Oil Corp., was 37th on the Modern Tire Dealer 100 list in the July issue.
It has been a family-owned business for more than 80 years. It has stores in Indiana, Illinois and Tennessee.
ATD donates $170,000 American Tire Distributors Inc. (ATD) recently donated $170,000 in gifts to three charities: Boundless Playgrounds, Second Harvest Food Bank of Metrolina, N.C., and The Salvation Army Center of Hope, N.C. The gifts were announced at the company’s 22nd annual ATD Charity Classic Golf Tournament, reports William “Bill” Berry, CEO and president.
TBC helps cancer patientsAt a recent race event, TBC Retail Group dedicated its Service Cen-tral racing efforts to Alex Scott, founder of Alex’s Lemonade Stand Foundation (ALSF). In addition to bringing 100 children and fami-lies to the Uni-Select Auto Parts NHRA Nationals at Maple Grove raceway, Mohnton, Pa., TBC Retail donated $181,129 to ALSF.
Truck sales will stay strongForecasts for both heavy-duty and medium-duty vehicles remained unchanged from September to October 2011, according to ACT Research Co. “Continued strength is being demonstrated in both the medium-duty and heavy-duty markets. Class 8 orders rose above expectations, while cancellations remained modest,” said Sam Kahan, ACT’s chief economist.
Right to Repair: 50,000 sign onThe Right to Repair Coalition has gathered 50,000 signatures, a sooner-than-expected milestone in its effort to place its pro-consumer initiative on the 2012 ballot in Massachusetts. In addition to the rapid signature gathering, the Right to Repair coalition’s Facebook page continues to grow daily and now has 10,000 supporters.
bites
From left to right: Marty Sanders and Deronda Metz from the Salva-tion Army; ATD’s Bill Berry.
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MTD November 2011
News/views
Michelin optimizes consumer online shoppingWith a new individualized online experience, Michelin North American Inc. says it is changing the way consumers shop for tires. Th e company now off ers a selection of digital tools to make the process of tire buying easier and more enjoyable.
“Consumers spend an average of 2.5 hours researching tires online, and many take much longer. Other online tire resources and tools aren’t going far enough to off er recommendations that are specifi c to individual driver priorities,” says Don Byrd, vice president of marketing at Michelin North America. “Developing useful tools and making our team of experts available enhances the tire-shopping experience, ultimately allowing our consumers to make more informed tire decisions.”
New tools include: Team Michelin Tire Selector Tool; Team Michelin Experts; User Tire Ratings and Reviews; Tires 101; and “Call Me Please.”
To try out the site or for more information, visit www.MichelinMan.com.
Yokohama’s green tire exhibit opens in BostonYokohama Tire Corp.’s eco-tire technology is now officially on display at the Museum of Science, Boston. Th e two-year exhibit showcases Yokohama’s BluEarth-1, the company’s latest orange oil-infused passenger car tire, as well as the ultra-thin AIRTEX Advanced Liner, which helps consumers cut fuel costs by keeping their tires properly infl ated.“Yokohama is the fi rst — and only — tire manufacturer in the world to employ orange oil technology,” said Yasushi Tanaka, Yokohama president and CEO. “It’s very rewarding to see it highlighted in a leading educational and cultural institution like the Museum of Science, Boston. Th e exhibit validates our commitment to advanced technologies that will protect earth.”
Th e tire’s technology combines oil extracted from orange peels with fi ne silica and a blend polymer to form a nano-blend compound. Th is BluEarth-fi rst technology, initially utilized in Yokohama’s dB Super E-spec tire, eliminates a signifi cant amount of the petroleum-based products normally used in tire manufacturing.
Tire Group International partners with TRPTire Group International Inc. (TGI) has partnered with Transportation Resource Partners (TRP) and the McLarty Companies.
“We have partnered with companies that share the very same ideals as part of their core and also share the vision for the growth of TGI,” said Tony Gonzalez, CEO of TGI. “TRP, with its close association with the Penske organization, and McLarty, are leaders in their industries and bring a vast amount of resources to our business. Th eir expertise in distribution and building businesses both in the USA and Latin America will help TGI take the next step in its rapid growth.”
Tire Group International is a fast-growing company in the worldwide wholesale distribution of tires, and South Florida’s largest independent tire wholesaler.
TBC, NHRA partnerThe TBC Retail Group has entered into a multi-year relationship with the National Hot Rod Association (NHRA). The TBC Retail Group also is the title rights sponsor of the Tire Kingdom NHRA Gatorna-tionals at Gainesville (Fla.) Raceway, and has a strong presence along NHRA’s Nitro Alley at NHRA Full Throttle Drag Racing Series events.
Radar hosts cancer awarenessRadar Tires, the flagship tire brand of Singapore-based Omni United Pte. Ltd., is helping to find a cure for breast cancer. During Breast Cancer Awareness Month, the com-pany hosted events at tire dealer-ships across the country in support of “Mobilizing Hope” — the brand’s partnership with The Breast Cancer Research Foundation.
Andreoli has new HQTire retail business management provider Andreoli & Associates Inc. (A&A) has moved to a new corpo-rate headquarters. The new A&A corporate offices and technical sup-port center is located in The Park, Huntersville, N.C. A&A’s datacenter hosting facilities located in Georgia and California remain unchanged.
Tireman opens 16th locationTireman Auto Service Centers has opened a new facility in Findlay, Ohio. “We’re looking forward to providing the top tire brands and a wide array of automotive services to the Findlay area,” said Randy Jones, president of Tireman Auto Service Centers.
bites
Yokohama’s Orange Oil Tire Technology is now on display at the Museum of Sci-ence, Boston. The BluEarth-fi rst technology is environmentally friendly.
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MTD November 2011
News/views
From ninth place to fi rst in just three years
Consumer Reports praises Cooper light truck and SUV tire
W hen Consumer Reports fi rst started rating all-terrain SUV and pickup truck tires in 2008, Cooper Tire & Rubber Co.’s entry was listed as the ninth best tire. Th ree years later, the company has the number one-ranked tire.
Th e Cooper Discoverer A/T3 fi nished fi rst among 13 tire lines tested. All were described as having “more grip than all-season on snowy and unpaved roads.” Th e tire’s cost, $150, placed it squarely in the middle.
It was among fi ve all-terrain tires that stood out, according to CR. Th e others, all of which tied for second place, were the Michelin LTX A/T2 ($180), Hankook Dynapro ATM ($175), Kumho Road Venture AT KL78 ($130) and Kumho Road Venture SAT KL61 ($139).
CR rated the Discoverer A/T3’s perfor-mance characteristics as follows:
• “Excellent” for snow traction.• “Very good” for dry braking, wet brak-
ing, hydroplaning resistance, ride comfort and tread life.
• “Good” for warm-weather handling and quiet ride.
Th e tire received “Fair” marks for ice brak-ing performance and low rolling resistance. It received no “Poor” marks.
In 2008, the Discoverer ATR was not a CR-recommended product, although it received an “Excellent” rating for its ability to resist hydroplaning. At that time, based on price and performance, CR recommended the Pirelli Scorpion ATR (which was the clear number one) and the Bridgestone Dueler A/T Revo.
“Over the last three or four years, we’ve spent a lot of time on materials technol-ogy, especially when it comes to new polymers and the utilization of silica. Th at has helped us optimize performance,” says Chuck Yurkovich, vice president of global technology. “Combined with our traditional speed to market, our focus on state-of-science materials technology has resulted in us being able to compete very eff ectively with industry leaders.”
In this year’s all-season SUV and pickup truck category (defi ned as “best for pavement in most weather conditions”), four Michelin tires and the Continental CrossContact LX20 EcoPlus ($159) tied for fi rst, based on points. Th e Michelin LTX M/S2 ($182), X Radial LT2 ($220) and Latitude Tour ($168) were singled out for their excellent tread life; the fourth Michelin tire was the Latitude Tour HP ($171).
CR complimented the Continental CrossContact LX20 EcoPlus and Michelin Latitude Tour for being “good for most weather conditions.”
In the winter SUV and pickup truck tire category (defi ned as “maximum traction on snow and ice”), the Continental ExtremeWinterContact and Nokian Hakkapeliitt a R Sport Utility fi nished in a tie for fi rst, followed by the General Altimax Arctic, Michelin Latitude X-Ice XI2 and Yokohama Geolander i/T G072. ■
Love’s opens in Cottondale, Fla.Love’s Travel Stops has opened a new travel stop in Cottondale, Fla., at Interstate 10, Exit 130. The Cottondale Love’s features 98 truck spaces, DEF dispensers at the diesel islands, CAT scales, and other amenities. A Love’s Truck Tire Care center is located behind the travel stop. Love’s Truck Tire Care centers are open 24/7 and are equipped with state-of-the-art tools and equipment to meet truck care needs.
Michelin network growsThe Michelin Commercial Service Network continues to expand, adding 200 locations to increase its coverage by nearly 70%. The network also has enhanced the Michelin ONCall Emergency Road Service (ERS), and will handle a projected 80% more events this year than it did in 2010. The net-work’s 1,700 TIA-trained techni-cians are focused on a roll time target of less than two hours for Michelin ONCall ERS.
‘Tire Answer Man’ debutsThe Goodyear Tire and Rubber Co. has launched the fleetHQ “Ask the Tire Answer Man” blog at http://blog.fleethq.com. The blog gives fleets and owner-operators an opportunity to interact with Tim Mill-er, Goodyear’s “Tire Answer Man,” a 30-plus year commercial tire veteran. Miller also serves as marketing com-munications manager for Goodyear’s commercial tire business.
ASA revamps websiteThe Automotive Service Association (ASA) has unveiled a redesign of its website, www.ASAshop.org. The website now includes a reorganized format, with the major addition of the new Communities section with access to online forums, document libraries, wikis and blogs.
Continental adds to ranksContinental AG has significantly increased the recruitment of junior staff in this year, and expects to hire 5,500 graduates and young profes-sionals worldwide by year-end. Of the 5,500 new recruits worldwide, 4,000 will fill engineering jobs and 1,500 commercial positions.
bites
The Discoverer A/T3 was described as “best overall, with long tread life.”
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MTD November 2011
This year has been char-acterized by soft retail demand, high tire prices
forced by surging raw materi-als, poor fill rates early in the year and new leaders of North American operations at both Goodyear and Cooper Tire. In the last month, gasoline prices and raw materials have begun to come down, but all tire manu-facturers instituted another round of price hikes because they are still way behind covering costs. I expect this to be the last round of increases barring further raw material cost changes. With gas prices off sharply, driving levels, and even tire demand, should soon begin to improve. Looking longer term, there are currently 25 new tire plants under construction (40% of them in China) that will start to come on stream in 2012 and 2013. With tire demand growing sharply in China, the local market should consume much of that increased production.
Monthly surveyA number of independent tire deal-
ers were surveyed concerning current business trends. Except for tire prices and costs, the results of the September 2011 survey are compared with those of September 2010.
Dealers are optimistic According to our dealer survey, roughly 50% of passenger tire dealers believe business will improve over the next six months while 42% believe it will stay about the same. Eight percent believe business will worsen. As for truck tire dealers surveyed, 46% see busi-ness staying level while 45% see business improving. Th e other 9% expect business to worsen. Volumes held steady in September for a second straight month and margins im-proved slightly. Th is is giving dealers hope that the next six months may shape up to be prett y good.
Volumes hold steady for a second straight monthOn average, retail sales of new replacement passenger
tires were fl at when compared with September 2010. Many positives, such as lower gas prices and improving unemployment data, should begin to benefi t tire volumes. New truck tire sales continue to surge ahead, as volumes were up 5% while retreaded tire sales were up 4%.
Profi t margins improved in September In comparing the month of September 2011 with August
2011, average costs for size 215/60R16 major brand tires were down 1% while selling prices were up 1%. Average costs for a 215/60R16 private brand tire were up 2% while selling prices were up roughly 3%.
Truck pricing seen as very fi rmTh ere was no uniformity in passenger tire dealer pricing
as an equal number of respondents saw pricing as normal, aggressive and very fi rm. On the other hand, 64% of truck tire dealers saw pricing as very fi rm, as high demand for truck tires is causing manufacturers to discount sparingly.
Truck tire inventories slip
Th e survey indicated that 50% of passenger tire dealers believed inventories were in line with current business levels, with the remaining dealers equally split between viewing inventories as too high and too low for current
demand. Truck tire dealers indicated inventories slipped a bit, as 50% believed inventories were too low, compared to only 30% last month. Only 8% of truck tire dealers viewed inventories as too high, which is the lowest level seen since April. Truck tires have been in high demand all year, which is making it diffi cult for dealers to build inventories
Service business holds steady in September
Dealers who provide automotive service reported that 25% of revenues, on average, were generated by service during September. Dealers indicated that service business has been the key driving force behind their 2011 growth. ■
Analyst Saul Ludwig is a managing director with North-coast Research Holdings LLC based in Cleveland, Ohio. He concentrates on the tire and chemical industries. He has been writing for Modern Tire Dealer since April 1975.
Ludwig Report
With gas prices down and driving levels up, expect increased tire demand
By Saul Ludwig
How dealers view their near-term businessDealers MAY JUN JUL AUG(R) SEP(P) SEP(09)
Passenger tireWill improve 45% 31% 23% 36% 50% 67%Will worsen 14% 6% 54% 18% 8% 0%Will stay level 41% 63% 23% 46% 42% 33%
Truck tireWill improve 56% 62% 50% 36% 45% 40%Will worsen 5% 0% 10% 9% 9% 0%Will stay level 31% 38% 40% 55% 46% 60%R-Revised P-Preliminary
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MTD November 2011
By Bob Ulrich
Sports marketing is a numbers game. Hits on a webpage ad are more important than hits during a baseball or football game. Impressions and views count for more
than outcome.Looking back at the recently completed Major League Baseball
season, four tire brands were featured in fi eld-level, behind home plate signage, depending on which stadium you were in. As the “offi cial tire of Major League Baseball,” Firestone could be seen in all 30 major league stadiums in some capacity.
“Th at board behind home plate can be sold by a local team, but if a game becomes a national broadcast, that becomes a national element that’s sold,” explains Phil Pacsi, vice president of consumer tire marketing in North America for Bridgestone Americas Tire Operations LLC.
Hankook signage appeared in 22 of the 30 stadiums, including Citizens Bank Park, home of the Philadelphia Phillies.
Yokohama could be seen in Angel Stadium of Anaheim, home of the Los Angeles Angels, while Maxxis partnered with the New York Yankees.
Th e key to impressions is television coverage, not the head count. “Sports reach a lot of people, but it also reaches a lot of eyeballs,” says Bill Barbera, senior vice president of sales for Van Wagner Sports Group. “And it’s global.”
Barbera has worked with Hankook for 10 years. He says home plate signage puts advertising into the telecast, and helps the brand “become part of the game.”
Calvin Pak, general manager of Hankook’s marketing team,
says the company has used sports marketing to increase brand awareness and build brand image. It tied this year’s involvement in baseball to two major consumer rebate and car giveaway promotions: “Great Catch” in the spring and “Great Hit” in the fall.
“Especially this year, I think we’ve received a lot of compli-ments from customers and dealers. One of the things we’re doing diff erently from previous years is leveraging and creating synergy.”
Maxxis International, based in Taiwan, and its United States subsidiary also have sponsored the Los Angeles Dodgers, Chicago White Sox, Atlanta Braves and Detroit Tigers in the past. “Th ere’s talk about sponsoring the Yankees again next year,” says John Wu, assistant product manager for the Maxxis International—USA’s Automotive Tire Division. “Th ey also are popular back home.”
Nitto Tire U.S.A. Inc. has been a Los Angeles Angels sponsor for two years. As part of that sponsorship, the brand appears in the Angels’ magazine and on the scoreboard behind home plate. Th is season, fans received plenty of swag: Nitt o handed out commemorative T-shirts on opening day; “Eco Bags” fi lled with recycled products in May; and a drawstring backpack in July.
Baseball is one of many television-driven, non-racing sports with which tire manufacturers are aligned.
• Bridgestone Americas Tire Operations LLC, Kumho Tire U.S.A. Inc.: National Football League (NFL).
• Yokohama Tire Corp., Kumho: National Basketball As-sociation (NBA).
• Continental Tire the Americas LLC, Kumho: Major League Soccer (MLS).
• Cooper Tire & Rubber Co., Toyo Tire U.S.A. Corp., Kumho, Continental: collegiate athletics.
• Bridgestone: National Hockey League (NHL), Professional Golfers Association (PGA).
• Toyo: Ultimate Fighting Championship.
Not everyone thinks sports marketing is an eff ective use of advertising dollars from tire manufacturers. “I still don’t see the value in what everyone’s calling sports marketing,” says Richard Smallwood, CEO and president of Falken Tire Corp.
“When we see the signage in the stadiums, it shows the brand, but not what the brand stands for. Th ere is no emotional att ach-ment or meaning assigned to the brand. Th e average American consumer is exposed to upwards of 3,000 brand messages a day. How does that static sign set your brand apart from all of the other brand messages bombarding the consumer?
Sports marketing
Th e sports marketing trend Baseball, football, basketball, even ultimate fi ghting promote tire brands to the masses
“Sports reach a lot of people, but it also reaches a lot of eyeballs,” says Bill Barbera, senior vice president of sales for Van Wagner Sports Group. “And it’s global.” Barbera has worked with Hankook Tire America Corp. for 10 years.
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“What does it mean? What is the brand value? Th at’s where we struggle with it,” he says. “We don’t see the value in it.”
Smallwood prefers motorsports, especially when his tire brand is competing against “the best in the world. Tires represent an interaction with the car, so there’s a lot of affi li-ation with them.”
In the American Le Mans Series GT Class, for example, Falken competes against Michelin, Dunlop and Yokohama.
Motorsports involvement certainly counts as sports market-ing, although it’s a whole diff erent animal. Th ere’s Goodyear with NASCAR and Pirelli with Formula One. BFGoodrich and General are associated closely with Baja racing. And many other brands are known at the grassroots level.
(Although motorsports will not be covered in this story, an in-depth interview with Goodyear about its association with NASCAR can be found on pages 28-31.)
Signage is one thing. What about advertising on uniforms? Soccer teams in Europe already sell it. Hats and shirts in golf have logos. Some NFL and NHL practice jerseys feature advertising.Barbera thinks within 10 years, baseball will allow advertising on uniforms, although perhaps not to NASCAR specifi cations.
“It’s become more and more commonplace around the world. It would be a tremendous revenue boon for the team.”
Bott om line, does it sell more tires for the company? Tires are sold, not purchased. Independent tire dealers directly aff ect the sale 85% of the time, so they have to be convinced more oft en than the tire buyer.
Ultimately, it’s all about making money, and perhaps raising market share in the process. Th e 2011 fi nancial statements will be telling.
Here’s a recap of how tire manufacturers used diff erent sports to promote their brands this year, as they appeared on our website, www.moderntiredealer.com. For a look at how retailers such as Belle Tire Distributors (check out the scoreboard on our cover) are involved in sports marketing, read “Play ball! Sports marketing and America’s pastime are no strangers to independent tire dealers” on the MTD website under the “Articles” channel and “Features” listing.
KUMHO“Kumho Tire U.S.A. has seen a very positive and dynamic
impact come from our sports marketing endeavors,” says Rick Brennan, vice president of marketing. “Our brand awareness, enthusiasm and excitement have grown immensely amongst our employees, consumers and dealers by not only our prominent presence in various stadiums and arenas, but by the special focus and att ention we pay to actually connecting with the fans and teams.”
June 30: Kumho adds Bills to sports marketing pushKumho is the offi cial tire of the Buff alo Bills NFL team. Kumho
recently announced the new partnership for the 2011-2012 season, which includes promotions with Dunn Tire LLC.
As part of the agreement, Kumho will receive branding on the back of Buff alo Bills season tickets, season suite tickets, individual game tickets and online downloadable tickets.
Buff alo, N.Y.-based Dunn Tire will off er ticket holders $75
off any four Kumho brand tires as a special “ticket back” off er redeemable at any Dunn Tire location.
(On Aug. 31, Kumho announced another NFL sponsorship, this one with the New York Jets for the next two seasons.)
June 2: Kumho prepares to kick off soccer promotionsKumho is teaming up with Sullivan Tire Co. Inc. and former
United States Men’s National Soccer Team player Alexi Lalas to promote “America SCORES New England.”
Th e tie to Lalas is appropriate for Kumho, because it also showcases its partnership with the U.S. men’s soccer team. Kumho is not only the offi cial tire of the men’s and women’s soccer teams, but also a sponsor of Major League Soccer.
SullivanTire, based in Norwell, Mass., runs 53 Sullivan Tire & Auto Service retail locations throughout New England. Lalas will meet and greet soccer fans on Friday, June 3, from 4 p.m. to 6 p.m. at the Brockton, Mass., store.
On June 4, Kumho will launch its philanthropic social media campaign supporting America SCORES New England, a non-profit organization that empowers youth through
the unique combination of athletics, creative writing and service-learning.
April 29: Kumho advances to the second roundSo far, so good for the NBA teams sponsored by Kumho. Both
the two-time defending champion Los Angeles Lakers and Miami Heat advanced to the second round of the 2011 playoff s.
In Los Angeles on April 20th, nearly 19,000 fans showed up at the Staples Center to watch the home team defeat the New Orleans Hornets in game two of the series. Fans received a purple Lakers — and Kumho-branded — rally towel with a “Let’s Go” rally cry.
In addition to Kumho signage on the Jumbotron and the lower ring section of the stadium, there was a PA announce-ment during the game thanking Kumho Tire for providing the rally towels to the fans, and promoting a $100 rebate off er on a set of Ecsta LE Sport high performance tires.
Even the Laker Girls wore red, fi tt ed Kumho branded shirts during a second-quarter routine.
The U.S. Women’s National Soccer Team faced off against Japan at the Columbus (Ohio) Crew Stadium in an exhibi-tion match on May 14, 2011. Kumho sponsors both the women’s and men’s national teams.
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YOKOHAMA“For us, sports marketing is an integrated
approach, not just a branding approach,” says Dan King, senior vice president of sales and marketing. He adds that Yokohama focuses on regional promotions in order to get its dealers involved.
Oct. 03: Yokohama partners with the New England Patriots
Th e New England Patriots NFL team is now part of Yokohama’s roster of sports marketing partnerships. The company announced it is sponsoring the NFL’s three-time Super Bowl champion Patriots for the 2011 season. (Yokohama also sponsors the NFL’s Dallas Cowboys, Denver Broncos and Baltimore Ravens.)
According to Shawn Denlein, Yokohama director of consumer product sales, the Patriots’ sponsorship includes Yokohama’s “Home Team Pride” program, Oct. 9-Nov. 6. Consumers can receive a free $85 gift card to the Patriot Pro Shop with the purchase of four Yokohama tires from participating local dealers.
As the Offi cial Tire of the New England Patriots, Yokohama will receive media exposure including weekly in-game and post-game television spots, features and billboards on the weekly telecast, as well as tickets and hospitality.
“Th e Patriots have a huge, passionate fan base which, along with the ‘Home Team Pride’ gift card promotion, will help generate foot traffi c in our dealers’ stores,” says Denlein.
May 16: Yokohama be-comes a Phillie phanatic
Yokohama has added the Philadelphia Phillies to its lineup in 2011 (in April, the company announced it was helping the Los Angeles Angels celebrate their 50th anniversary).
Th e sponsorship agreement includes:
• a combination of signage behind home plate and on the fi rst and third base lines;
• pre-game, post-game and in-game spots on the Phillies fl agship radio station through-out the season; and
• in-stadium displays and in-game announcements on the public address system and LED scoreboard.
One of the promotions is the “Home Team Pride” program, which runs through June 12. During the promotional period, consumers can receive a free offi cial replica Phillies jersey with the purchase of four Yo-kohama tires from participating dealers.
Yokohama also partnered with two NBA teams, the Boston Celtics and the Houston Rockets, during the 2010-2011 season.
HANKOOKIn 2010, Hankook signed marketing
agreements with 11 Major League Baseball stadiums to show its name and logo on signage behind home plate. Th at number jumped to 22 stadiums this year.
Hankook hasn’t made a fi nal decision on its sports marketing plans for 2012. “We will probably build on the momentum,” says Pak.
Sept. 6: Hankook awards Ford Explorer to contest winner
Teresa Holder of Jonesboro, Ind., is the winner of Hankook Tire America’s Great Catch 2011 Ford Explorer Limited Giveaway. Th e Great Catch giveaway had more than 44,000 entries submitt ed.
Soo II Lee, president of Hankook Tire America Corp., presented Holder with the key to her new vehicle on-fi eld before the fi rst pitch of the Detroit Tigers’ game versus the Kansas City Royals at Comerica Park in Detroit, Mich, on Aug. 30, 2011.
Los Angeles Angels fans at the April 12 game against the Cleveland Indians received a fl eece blanket. “Sports sponsorships offer incredible brand visibility and are a great platform to pro-mote our line-up of tires,” says Shawn Denlein, Yokohama’s director of consumer product sales.
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MTD November 2011
Sports marketing
No purchase was necessary to enter the contest. Holder, 56, said she entered online and had never purchased Hankook tires. “I defi nitely know what kind of tires I’ll be buying from now on!” she said, adding she buys her tires from Tire Barn Warehouse in Marion, Ind.
Following the pre-game presentation ceremony, Holder and her husband, Roger, joined Lee in a VIP suite to watch the game. She also received a signed baseball from Tigers right fi elder Magglio Ordonez.
Th e Great Catch Mail-in Rebate program was available to consumers who purchased four select tires of any size between April 1 and June 30 from an authorized Hankook retailer. Hankook launched its Great Hit promotion Sept. 1. Consumers who purchase four select tires through Nov. 30 with be eligible for a mail-in rebate of up to $80.
COOPER“Cooper Tire understands that the typical sports fan provides
a high visibility target for Cooper’s brand messages,” says Hal Gardner, vice president of marketing communications and market intelligence. “For example, our consumer research suggests that over half of all sports broadcast viewers are directly linked to replacement tire purchases, so it makes sense for Cooper to sponsor events such as the ABC/ESPN College Football Halftime Show to effectively reach this valuable consumer audience.
“Sports marketing also has potential to reach the enthusiast consumer demographic that typically is a strong supporter of Cooper’s light truck, SUV and UHP products, so the fi t is a good one with respect to overall audience participation with our brand.”
Aug. 26: Cooper continues with halft ime showCooper Tire is staying active with the ABC College Football
Halft ime Show. For the fi ft h consecutive year, Cooper will spon-sor the show’s “Saturday Aft ernoon Halft ime Reports” on ABC.
In addition to Major League Baseball, Maxxis International also sponsored signage at the Australian Open tennis tournament this year. The Maxxis logo could be seen at Centre Court in Rod Laver Arena.
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MTD November 2011
Sports marketing
Th e show is a premier broadcast that brings viewers the latest collegiate scores, game previews and expert game analysis.
“Th is relationship brings together two iconic brands that stand for tradition, performance and the pursuit of excellence,” says Julie Smalstig, Cooper Tire’s consumer and channel marketing director. “Th is sponsorship also off ers a meaningful opportunity for Cooper to continue enhancing its marketing support for our dealer network.”
According to the National Collegiate Athletic Association (NCAA), college football set a record for the number of people att ending games last season. Close to 50 million fans turned out to watch NCAA football games. Th is represents an increase of more than 1.3 million fans, or nearly 3%, from the prior year. Cooper also will launch its consumer-driven Take the Money and Ride national rebate event (Aug. 25-Nov. 7, 2011) during the start of college football.
TOYO“At Toyo Tires, we continually evaluate all of our market-
ing initiatives to ensure we are creating a positive ROI for the company and our dealers,” says Amy Coleman, senior director of marketing. “Th is includes our sponsorships and event support. “Whether it’s a motorsports event, a college
sports team, UFC or even an individual athlete, all of our sponsorships must align with our overall company goals and objectives. Our goals include growing consumer awareness, reinforcing our reputation as a premium tire brand and driving traffi c to our dealers’ stores.”
May 10: Toyo sponsors Pac-10 ChampionshipsBuilding on a fi ve-year relationship with the Pacifi c-10, or
Pac-10, Conference, Toyo Tire U.S.A. is the presenting television sponsor of the 2011 Pac-10 Track & Field Championships.
In addition to the 2011 Pac-10 Track & Field Champion-ships, Toyo sponsors Pac-10 basketball and football, and also the Pac-10 Scholar-Athlete of the Year. “Th e dedicated student-athletes of college sports exemplify the Toyo Tires mantra: ‘Driven to Perform,’” says Marty Furman, Toyo’s chief operating offi cer.
Jan. 18: Toyo to sponsor Ultimate Fighting ChampionshipToyo Tire U.S.A. is returning as a sponsor and offi cial tire of
the Ultimate Fighting Championship (UFC) for 2011.Th e “Toyo Tires” name will once again adorn sides of “Th e
Octagon” during six live UFC Pay-Per-View events. In addition, the Toyo Tires logo will be included on the canvas for select UFC Fight Night events broadcast on VERSUS and Spike TV. Toyo was the offi cial tire of the UFC from 2006 to 2008. UFC programming is broadcast in more than 145 countries and territories, reaching 354 million homes worldwide in 19 diff erent languages.
CONTINENTALAt the Continental dealer meeting earlier this year, Director
of Marketing Travis Roffl er told att endees the company was utilizing Major League Soccer and Grand-Am road racing to grow the Continental brand in the U.S.
“A litt le over four million people att ended Major League Soccer games last year, creating just over 68 million impressions with an on-site value of just over $10 million for the brand.
“If you just call up some consumer and say, ‘Name a tire brand,’ the average American consumer answers Continental tire only 5% of the time. Th e average MLS fan answers Continental tire more than three times that number. And among Grand-Am fans, 46% are aware of the Continental tire brand.” ■
Reinforcing brand awarenessBridgestone promotes tires in major ways
Being the “official tire” of a major sport is not enough, according to Phil Pacsi, vice president of consumer tire marketing in North America for Bridgestone Americas Tire Operations LLC.
His sports marketing philosophy is to promote from within. “You should promote within that particular sport. We don’t cover the entire season, but pick selected times during the season.”
Bridgestone is heavily involved in the NFL, NHL and PGA with its Bridgestone brand. In Major League Baseball and the IZOD IndyCar Series, Bridgestone promotes the Firestone brand.
“A lot of our spend is at the end of the year leading up to the Super Bowl and the Bridgestone Halftime Show, which is our crown jewel event,” says Pacsi. In addition to print, online and television advertising, the company gets its deal-ers involved as much as possible.
For Super Bowl XLV in Dallas, Texas, in 2011, Bridgestone dealers in the New Orleans, La., area got together and col-lectively promoted the brand. Pomp’s Tire Service in Green Bay, Wis., also took advantage of the “pass-through rights” negotiated by Bridgestone, allowing the dealership to use the Super Bowl logo.
Close to 111 million people tuned into the game, making Super Bowl XLV the most watched program in television history. Also, there were 103,219 people in attendance in Dallas — not counting the 5,000 people who paid $200 each to stand outside the stadium and watch the game on a giant TV screen.
To put that number in perspective, the population of the United States is 308.7 million people, based on the 2010 Census.
Toyo sponsors a number of Pac-10 college sports, includ-ing basketball, football and track and fi eld.
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MTD November 2011
By Bob Bissler
A ny NASCAR fan knows. What’s the offi cial tire of NASCAR? Goodyear. And it will remain that way at least for the next five years. In
October 2011, Goodyear and NASCAR signed an extended agreement for Goodyear to continue as the exclusive tire used in NASCAR’s top three racing series for the next fi ve years.
Th at’s good news for the Goodyear Tire & Rubber Co. But it’s also good news for any dealer who sells
Goodyear’s G3 tires — Goodyear, Dunlop and Kelly.
“If we compare your average consumer versus somebody that identifi es himself as a NASCAR fan, we get a lift in market share,” says Kris Kienzl, Goodyear’s NASCAR marketing manager. “NASCAR fans come in to buy Goodyear tires, versus the aver-age consumer.”
As the offi cial tire of NASCAR, the Goodyear tire brand is exclusive for NASCAR’s top three series — the NASCAR
Sprint Cup Series, the NASCAR Nationwide Series and the NASCAR Camping World Cup Series.
“We have a lot of operational commitment as the of-fi cial tire,” says Kienzl. “We have a large group of racing engineers. Th ey’re not only in Akron, Ohio, working on developing tires for NASCAR; they follow them to the track. Th ey work with the teams and get a lot of data. Th ey get a lot of feedback so they can continuously use that information in future development.”
Goodyear doesn’t release specifi c numbers on how much the company spends to be the offi cial tire of NASCAR. However, it is a signifi cant investment. Kienzl says the company’s market share data and sales volume fi gures do support the investment.
It looks like the relationship is paying off . According to the 2011 Modern Tire Dealer Facts Issue, the top brand in the U.S. consumer tire market in 2010 was Goodyear,
with 17.6% of an industry total of 226.3 million units (Bridgestone was second at 17.3%, followed by Michelin at 16.8%). Goodyear also has the highest percentages of the U.S. replacement consumer tire brand shares. Goodyear has 15% of passenger tires (based on 198.7 million units) and 12.5% of light truck tires (based on 27.6 million units).
Track to streetBett er sales are only part of Goodyear’s motorsports
marketing strategy. Consumers benefi t as well. How? Track to street technology transfer. Kienzl explains that being involved in motorsports helps the company design bett er tires for consumers.
“Our tires are endemic and are used in the sport versus being a sponsor in the NFL, where we would just be a name,” says Kienzl.
“Th e development that our engineers do with NAS-CAR tires really trickles through all of our company. Th ere’s a lot of learning week-in and week-out as far as thinking about new technologies, bringing new technologies to market and taking some of those technologies from racing tires and transferring them over to consumer tires.”
According to Jim Davis, Goodyear’s public relations manager, many of the technologies that Goodyear uses in consumer products were fi rst developed for racing. Th is includes various tires reinforced with carbon fi ber (the ultra-high performance Eagle ResponsEdge, for example) and DuPont Kevlar (the off -road Wrangler MT/R, for example).
In addition, a Goodyear innovation that crossed over from racing to street tires is run-fl at technology. In 1966, Goodyear developed an inner-liner for race tires to prevent race cars from decreased control aft er a sudden loss in tire pressure. Th e off spring of that was Goodyear’s RunOnFlat Technology used in some consumer tires.
Track to street technology transfer isn’t the only advantage for Goodyear. Th e tech transfer also goes from street to track.
“Goodyear developed a new rain tire for possible use in the NASCAR Nationwide Series,” explains Davis. “Th e tire could be used in wet track conditions at some road courses on the NASCAR Nationwide Series schedule. Th e race tire’s tread patt ern is similar to that featured on the Goodyear Eagle F1 all-season high-performance tire for consumer use.”
Sports marketing
(Motor)SPORTS marketingGoodyear’s 59-year relationship with NASCAR increases brand loyalty and technology transfer
Goodyear delivers all the tires used at each NASCAR race to tracks every week during the race season. The specially de-signed Goodyear “Support Our Troops” tires shown above were used at the Daytona International Speedway at the July 3, 2010, Coke Zero 400 race.
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Sports marketing
Marketing the NASCAR brandKienzl says NASCAR is the second-most popular sport on
television in the United States. Th at’s a huge opportunity to reach a broad base of consumers. But NASCAR fans are no ordinary consumers.
“NASCAR fans are interested in technology,” says Kienzl. “Th ey tend to know a litt le more about cars. Th eir neighbors ask them for advice about cars and tires. From a marketing perspective, we want to grow Goodyear brand affi nity and purchase intent — and market share in the end. Our research shows that NASCAR fans are very brand-loyal.”
Goodyear’s research also reveals that NASCAR brand loyalty benefi ts dealers.
When a NASCAR fan is shopping for tires and deciding what brand they intend to purchase, they are more likely than the average consumer to walk into a store with the Goodyear brand in mind. And, they don’t change their mind once they enter the store.
“Th at is very positive for Goodyear when they’re coming in predisposed to buy our brand,” says Kienzl. “It may be up to the guy behind the counter to help them with which Goodyear tire is right for them, but they are coming in predisposed because they want our brand. Th at is a good thing for our dealers selling Goodyear tires.”
Kienzl says that Goodyear’s team of sales representatives around the country run sales incentives for Goodyear dealers. If a dealer wants to run a special NASCAR promotion, the
0
10
20
30
40
50
60
7% Not important
at all
19%Not very
important
54%Neutral
17%Important
2% Very important
Motorsport activities
How important are the following market-ing attributes in your decision whether to
do business with a tire supplier?
Source: Modern Tire Dealer survey.
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company will help them with ideas and provide them with promotional materials. Th ey can provide dealers with NASCAR race tickets, garage passes and hospitality suite access.
“We have taken dealers on NASCAR garage tours and provided them with information about what Goodyear does at the track,” Kienzl explains. “Just reinforcing that knowledge helps bett er educate the people who are selling the tires.”
Another way Goodyear educates dealers and consumers is through national marketing campaigns.
Th e company launched its “More Driven” campaign earlier this year. Kienzl says the whole idea behind the campaign is that more experts choose Goodyear for its superior performance.
“Th e More Driven campaign absolutely has NASCAR integrated into it,” Kienzl says. “With our dealers, the more we integrate NASCAR and Goodyear brand loyalty, it will naturally trickle down to Goodyear dealers.” ■
Trackside tiresThe Goodyear Tire & Rubber Co. delivers all the tires re-quired for every NASCAR race weekend. That includes not only the tires that will be used during the actual race, but also the tires NASCAR teams will need for testing, practice and qualifying.
NASCAR rules require teams to lease the tires from Good-year, so they don’t own them.
“We used to sell the tires to the teams,” explains Kris Kienzl, Goodyear’s NASCAR marketing manager. “What would happen is you’d have a team with a lot of sponsor money like a Hendrick Motorsports. They would be able to buy tires and then go out and do their own testing and become even stronger. Then they’d get on the track and you’d have them versus a one-car team that just couldn’t afford to do their own testing. So NASCAR asked us to put together a leasing program to even-out the playing fi eld.”
To further even-out the fi eld, NASCAR also changed the rules to limit teams from performing their own tire tests. Today NASCAR teams, big and small, are more evenly matched.
NASCAR teams lease the tires from Goodyear at what Kienzl calls “the low, low price of $449 a tire.” After a tire is used, it is returned to Goodyear. What would happen if someone didn’t want to return a tire? NASCAR and Goodyear have a unique method of ensuring that all tires are returned.
“We actually have radio frequency identifi cation (RFID) chips in those tires for tracking,” says Kienzl. “We check them out and check them in. So teams can’t leave — their hauler can’t drive away — until all the tires have been returned after the race. It’s a process that works very well and we’ve never lost a tire.”
Teams also are not allowed to keep the tires that are on the car when the race fi nishes. Goodyear provides temporary tires that are installed on each stock car so teams can put the vehicle back in the hauler. So what happens to all those used tires after the teams go home?
“We drill holes in the sides of them,” Kienzl reveals. “If anything were to happen to the tire — somehow somebody got their hands on one — it would be rendered useless.”
Quik-Link: 800-687-1557 ext. 22117
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MTD November 2011
By Bob Bissler
There are two kinds of people who buy high-perfor-mance wheels and tires. One is looking to improve the appearance of their vehicle, or to customize it so
they can stand out in a crowd. Th e other is doing something that will enhance the performance of the vehicle.
“To upgrade appearance, a lot of people will choose more aggressive looking tires and sportier looking wheels,” says John Rastett er, director of tire information services, Th e Tire Rack. “Wheels are very much a fashion and a function market. Lighter-weight wheels can enhance a vehicle’s performance because it doesn’t take as much energy to make them go, make them stop or hold the road around a corner.”
Rastett er says that for people who want to enhance ve-hicle performance, the wheel itself in many cases is the fi rst determining factor. Th en they’ll add the tire to the package. If their vehicle came with a passenger or a touring tire as original equipment, going to a high-performance or ultra-high performance (UHP) tire can take them to a new level
of responsiveness, cornering and stability. Th at makes the car more fun to drive. And this market is about fun.
“Cars are so much bett er today than they were last year or the year before,” says Greg Hathcock, president of Vogue Tyre. “Car manufacturers have done such a phenomenal job of building a great product; cars that are fun to drive, responsive and effi cient. UHP tires really just accentuate all the great benefi ts of these new cars.”
As OEMs improve product off erings, many are gett ing in on the UHP tire/custom wheel act.
“From our perspective, the market is leveling off ,” says Rastett er. “Th at’s partially because so many manufacturers are off ering more options as original equipment. Today, if you buy a version of a vehicle that’s got a sport package or a performance package, the wheels and tires tend to be a very important part of that. A vehicle might come with a 17-, 18- or a 19-inch wheel and tire rim diameter that is used as part of a sport package. Camaros will go up to 20-inches from the
UHP tires and wheels
Hot wheels, cool tiresTh e market for UHP tires packaged with custom wheels evolves as OEMs off er more high-performance packages
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UHP tires and wheels
factory as part of their performance packages.” Th ese more extreme performance packages appeal to a more extreme group of consumers. In addition to enjoying driving their cars on public streets, they will participate in autocross competi-tions or high-performance driver’s education events held at racetracks. Many belong to car clubs.
For these consumers, the wheels and tires help the vehicle maximize what its engine, suspension and brakes can do. For the aft ermarket, if a car comes with 20-inch wheels, the consumer is less likely to want to further enhance them. Just a few short years ago, that same car might have come with 16- or 17-inch wheels.
“Th at is aff ecting our business,” says Rastett er. “We’re in the tire and wheel business. While many people will buy one set of aft ermarket wheels for their car, throughout the life of the vehicle they’ll be buying several sets of tires.”
Vogue Tyre also off ers tires and wheels packaged together. Hathcock says that generally, these consumers want to go with plus-size applications. He says this is becoming more common because there are more cars coming from the factory with higher speed rated tires and lower aspect ratios.
“Custom wheels are still a niche,” he explains. “I would say that the percentage of those packages that can be characterized as UHP is growing, simply because OE applications that can be characterized as UHP are growing.”
Hathcock says if you talk to several diff erent people you’ll get several diff erent defi nitions of what UHP means. He says
that at Vogue, the perception of a UHP tire is anything V-speed rated and above. However, the defi nition keeps gett ing broader. UHP tires used to be purely summer tires. Now there are UHP all-season tires, and also winter tires for UHP.
“For the person who buys a vehicle that has the optional
custom wheels and UHP tires on it, if they live in the north, trying to get through winter with very low-profi le, very wide large rim diameter tires can be more of a challenge,” explains Rastett er. “Th e person who has the vehicle in the north, that’s fully optioned from the factory, may have their UHP needs met, but they’ll come to us for a winter tire and wheel solution.”
As this segment evolves, tire and wheel suppliers must keep up. As they do, there is reason for optimism in this market.
“I think it’s still going to remain strong,” says Rastett er. “No matt er where you have a vehicle and original equipment, there’s always going to be a group of enthusiastic drivers who want to personalize their vehicle, to make it theirs.”
“Projections for new car sales are getting better,” says Hathcock. “Th e average car on the road today is almost 11 years old. So there’s clearly pent-up demand for new cars with performance wheels. When exactly that demand hits the market remains to be seen.” ■
Custom wheels are still a niche.
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MTD November 2011
TIPS stands for Tire Inventory and Purchasing System. It links TCi customers with the consumer tire distribution center in their respective areas. All TCi custom-ers can not only look up and order tires in real time, but also main-tain their own list of authorized users and retail pricing. “TIPS is also a selling tool,” says Pekle. It is designed to be displayed to the consumer. Future enhance-ments will include total TCi inventory count and customer website integration.
Distribution channels
W hat is TCi? As an independent tire dealership, it was known as Tire Centers Inc., or TCI with a capital “I.”
When Michelin North America Inc. purchased it in 1999, it became a wholly-owned LLC with a small “i.” However, it is made up of two divisions with no ties to each other.
In addition to its Michelin, BFGoodrich, Uniroyal, Trivant and Riken brands, the wholesale division supplies Maxxis, Pirelli, Hankook and Goodride passenger and/or light truck
tires to independent retailers and car dealerships. “We have to compete against other price points,” says Jim Borkey, senior vice president of distribution.
Th e commercial division is a company-owned chain of 68 dealerships that off ers the Michelin, BFGoodrich, Continen-tal, General, GT Radial, Hankook, Roadlux, Sumitomo and Yokohama truck tire brands to fl eets.
Sound confusing? It won’t be aft er you check out the TCi spider chart below. — Bob Ulrich
“We are not an orphan, we are not independent. But we’re our own profi t center.” Guy Pekle
A&E Tire Inc.Allied Oil & Supply Inc.Bauer Built Inc.Broadway Motors Inc.Canyon Tire Sales Inc.Colony Tire Corp.Highlands’ Tire & ServiceJack’s Tire & OilLove’s Travel StopsMeekhof Tire Sales & Service Inc.
New England Truck Tire Centers Inc.Ozarko Tire Centers Inc.Phelps Tire Co. Inc.Service Tire Truck Center Inc.Shrader Tire & Oil Inc.Snider Tire Inc.Strouhal Tire RecappingZiegler Tire and Supply Co.Valley Tire Co. Inc.
The 78 TCi distribution centers na-tionwide only wholesale consumer
tires, says Jim Borkey (right), se-nior vice president of distribution.
The distribution center in Greer, S.C. (pictured) has more than
30,000 square feet of space.
Guy Pekle oversees both of TCi’s divisions in Duncan, S.C., as CEO and president. He says neither is
done growing.
TCi: one company, two divisionsWholesale? Commercial? Each is a profi t center
Independent members of the Michelin Commercial Service Network, the nationwide truck and OTR tire program launched by the Michelin Americas Truck Tires division, are:
The 68 Tire Centers outlets also are part of the net-work. Ten of them have Michelin Retread Technologies plants; seven repair OTR tires. “We want to have as little overlap as possible with members of the Michelin Commercial Service Network,” says Pekle.
John McLeod (below left) is se-nior vice president of operations for the commercial division. Nate Kirian (right), is vice president of marketing for TCi.
“We are not standardized, but systematic.” John McLeod
36
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MTD November 2011
I t would be a gross exag-geration to say I’m an avid reader of anything outside
the sports pages on the Web. For me to pick up a book and read it from cover to cover says a lot about the book, not to mention my interest on the subject.
Normally, I have litt le interest or time for books that promote business and marketing, or self-help books that have the proven solutions to make me bett er at everything. Which means any business book that I have read more than once is a huge deal in my world.
About 10 years ago, I started taking an interest in brand-ing and came across an excerpt in an airline magazine on the subject. It left me wanting more, so I wrote down the title and author and started looking for it at my local bookstores. I found it a short time later and couldn’t put it down once I started reading. Since then, I’ve bought copies to give to new employees.
When most people think of a brand, the image of a logo, name or symbol immediately comes to mind. You don’t need to see the silver lett ers “GM” on a fi eld of blue to know what company it represents, nor do you need to explain the meaning of fi ve interlocking, multi-colored circles with three on the top and two on the bott om. And while marketing experts spend millions of dollars creating brand identities that are easily recognizable by consumers, recognition is only half the batt le.
Th is book goes beyond the old brand thinking of logos and tag lines to create a new defi nition that encompasses more than what you see and hear.
It taps into the feelings that are created by those identifi ers so executives and managers can focus on the core values that matt er to consumers.
The name of the book is “A New Brand World” by Scott Bedbury with Stephen Fenichell. Bedbury was the Nike marketing executive who guided the “Just Do It” campaign that catapulted the company from the number three athletic shoe manufacturer to the largest footwear and apparel company in the world. He also managed the marketing eff orts for Starbucks in the late 1990s when the
company expanded from the Seatt le area to thousands of stores across the globe.
In his book, Bedbury chronicles his experience with both companies and uses it to teach valuable lessons regarding the evolution of the new brand world:
“A brand is the sum of the good, the bad, the ugly, and the off -strategy. It is defi ned by your best product as well as your worst. ...It is defi ned by the accomplishments of your best employee — the shining star in the company who can do no wrong — as well as by the mishaps of the worst hire you ever made. It is also defi ned by your receptionist and the music your customers are subjected to when placed on hold... Th e brand is defi ned by derisory consumer comments overheard in the hallway or in a chat room on the Internet. Brands are sponges for content, for images, for fl eeting feelings. Th ey become psychological concepts held in the minds of the public, where they may stay forever. As such, you can’t entirely control a brand. At best you can only guide and infl uence it.”
While the impact of “Just Do It” on the growth of Nike is impressive, I believe Bedbury’s discussion on Starbucks is the most relatable to the tire industry. Tires, like coff ee, are more or less commodities in the eyes of many consumers, so the success of Starbucks is all that more amazing when you consider the coff ee market just 10 years ago. What’s even more impressive is the fact that Starbucks does not run commercials or print ads as part of its marketing. Old-fashioned word-of-mouth advertising continues to be successful, in part because Bedbury helped Starbucks crack their brand’s genetic code:
“Cracking your brand’s genetic code is not strictly about product, about the past, or even about things — it is about tapping into an essence and an ethos that defi nes who you are to the folks who matt er: your core customers, your potential customers, and your employees.”
Let’s start with the core customers because they are the ones who matt er the most. For Starbucks, the members of this group will travel miles out of their way with total disregard for time and fuel economy to get a cup of coff ee. Th ey’ll use words like “consistency” and “quality” when rationalizing the extra eff ort it oft en takes to fi nd a loca-
Dealership branding
Making customer service part of your brand
A logo is only half the battle. Th e author combines his training skills with the teachings from his favorite business book to help you sell more tires and service
By Kevin Rohlwing
38
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39www.moderntiredealer.com
tion. Of course, in order to maintain any level of excellence in thousands of stores, every employee must buy into the core values that their brand represents.
Starbucks took a commodity like a cup of coff ee and its people turned it into an experience that includes high-quality, precision-brewed cups of coff ee. It doesn’t matt er where you go, the consistency of the product and the experience continues to result in extreme brand loyalty. Th is is exactly why Bedbury emphasizes the employees as part of the genetic code:
“Th ough it is important to demonstrate consistency to the outside world that you know what your brand is about, ultimately it is even more important to fi rst demonstrate this internally and continue to do so at every opportunity.”
Tire retailers can learn a lot from Starbucks. Tires are a commodity just like coff ee because many consumers see few dif-ferences between one brand and another or the company that installs it. Many of them are looking for the best price, just like it was in the old days of coff ee. If the tire industry wants to charge a premium for installing the same tire as everyone else, then retailers must commit to a much higher level of customer service training in order for it to become part of the brand.
It begins with the person who answers the phone. Is the voice pleasant, one that shows genuine appreciation the customer called? Or is it laced with indiff erence, one that says “I just want to transfer you as quickly as possible so you are no longer my problem”? In some cases, a cheerful introduction and the name of the person who can help may be all that is required to put the customer at ease.
And if the counter person is busy, a promise to call back within a set time frame is a great way to get your customer to leave a message — as opposed to a voicemail that, at least in the consumer’s mind, may never get returned. Th en when the salesperson follows through and schedules an appointment, the tire buyer already will have increased expectations about the brand because the fi rst impression will have been notably unlike his or her previous experience with other companies.
As soon as a customer arrives at the location, another important message about the brand is communicated. Every impression infl uences customer loyalty, so housekeeping is a major factor in sett ing the tone that separates one retailer from another. When your store is clean the fi rst time and every time aft er that, the repeat consumer sees that housekeeping is an important part of the culture. If the company has multiple stores and they all maintain the same level of cleanliness (es-
pecially rest rooms), then it truly becomes part of the brand, and customers will recognize that.
I believe once the smell of sanitized rest rooms, scented candles, fresh popcorn or cookies/coff ee wears off , true cus-tomer service ultimately comes down to three key att ributes: att itude, confi dence and gratitude. Th ey apply as much to your technicians as they do to your counter people, but we’ll start with how they can make a diff erence the minute the customer walks through the door.
1. Att itude: Once again, is it warm and welcoming or rushed and bothered? People need to feel that the people with whom they are talking are actually glad to see them. If the salesperson is busy, a simple acknowledgment that he is aware the customer is
waiting is enough for most people. Positive employees who are generally in a good mood and happy to see customers can build the type of brand loyalty that Starbucks continues to enjoy.
2. Confi dence: Listening is a skill upon which almost all of us could improve. Customers must believe salespeople are truly interested in what they have to say. Th en they can respond confi dently with the perfect solution because they have the training to explain the features and benefi ts of each option.
3. Gratitude: Genuinely show you appreciate your cus-tomers’ business by telling them so, and making sure they
Tires, like coff ee, are more or less commodities in the eyes of many consumers.
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like coff eeew dif-nd
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MTD November 2011
Dealership branding
understand your procedures and services. Th e goal here is to make the customer want to return for another transaction. Finally, salespeople should ask their customers if they are happy with the level of service and explain the complaint resolution policy.
If there is no complaint resolution policy, then dissatisfi ed customers will just never come back. If I’m going to believe that customer service is part of someone’s brand, then the salesperson should ask me if I’m happy and let me know what I should do if I’m unhappy for any reason. When custom-ers have the phone number of a manager or the owner, then they will believe that the company is serious about exceeding expectations (see sidebar on page 46).
But the customer service experience does not stop at the sales counter. Every technician in the shop must buy into the same concept of exceeding expectations no matt er what rolls in the bay. Th ose att ributes that must be inherent to the sales staff also need to be in place for the employees who have litt le to no contact with the customers. A good example of a company buying into an “exceeding expectations” philosophy is Mountain View Tire and Service Inc., which is known for providing the “WOW Experience.” (Read about Mountain
View’s CEO and President Nick Mitsos — MTD’s 2011 Tire Dealer of the Year — in the September issue of MTD.) 1. Focus on att itude: Do your technicians take the time to wipe off any excess oil under the car aft er an oil change, or just ignore it and let it drip on the customer’s garage fl oor? Do
they take the time to make sure their hands and shoes are clean when they get in the vehicle? If he has a poor att itude, and fails to treat the customer’s vehicle like it’s his own, all the good will created by excellent phone skills and a clean, informa-
tive showroom can be undone in seconds.I can tell you there is a quick-lube place around the corner
from my house that will never get my business again because the technician didn’t wipe up the excess oil. It is convenient and the counter people are pleasant, but I will never go back because its technician didn’t care. 2. Focus on confi dence: Every technician must believe he knows exactly what needs to be done and have access to the tools and training to make sure the service is performed correctly. Guessing and rigging are not part of the customer service “brand,” so training and proper equipment are ne-cessities. Scratching the rim fl anges on alloy wheels should never happen with modern day machines if the employees
If the salesperson is busy, a simple acknowledgment that he is aware
the customer is waiting is enough for most people.
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Quik-Link: 800-687-1557 ext. 22124
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Dealership branding
know how to use them. If technicians don’t have the right equipment or training, they cannot be expected to have a lot of confi dence in their work. 3. Focus on gratitude: Th ere has to been a genuine sense of appreciation when technicians get the opportunity to work on someone’s vehicle. Th ey must be conscious of every detail so a customer immediately recognizes that someone took great care of her car. Technicians, like salespeople, have to make sure they do every-thing they can to make the driver want to come back for needed service or preventive maintenance. I’m not talking about mints on the dashboard or personal notes — or maybe I am.
My golden rule of training always has been “to change behavior in a positive manner.” It doesn’t matt er what type of training takes place, the goal should be to improve the level of performance so things get bett er.
All commercial tire dealers are required by law to provide training for every employee who handles an infl ated truck tire, so many of them use TIA’s training program for OSHA compliance. But the progressive companies also will provide the same training to the sales and offi ce personnel so they are familiar with the terminology and diff erent types of fi tments. Th ose same employees would also receive extensive training
on how to answer the phone, ask for the sale, and resolve a confl ict. Th ey become confi dent in their ability to handle just about any situation because every person in the building has been trained in several diff erent areas.
In case you haven’t noticed, the new car dealers and national automotive repair companies are spending millions to market the fact that they are in the tire business. Th ere has never been more competition for the independent tire dealer, so
companies that want to stay in business must be more aggressive in their approach to training.
When you cannot compete on price, there has to be something else to diff erentiate you from the big boys. Starbucks
did it by combining high quality coff ee with highly trained baristas in comfortable sett ings that create an atmosphere and an experience. And even while other retail cup of coff ee companies have stepped up, Starbucks remains the gold standard because the core values of the company are communicated to the employees on a regular basis.
While I seriously doubt that the Starbucks crowd will ever show the same level of passion for tire and vehicle service, I know the tire industry can learn a lot from its example. Th e formula appears to be so simple that it could be copied by
Complaint resolution policies are nothing more than signs on the walls if nobody follows through
and resolves the dispute.
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Dealership branding
anyone, but there have been plenty of failed entrepreneurs who thought it would be easy to charge more for a bett er quality cup o’ joe. It also takes highly motivated and trained employees who understand that every detail plays a vital role in defi ning the brand to the customers.
Each of the three key att ributes of customer service must be in place in order for them to translate to the brand. Att itude is everything, which means most people can spot an order taker or commission hound in seconds. Th e same can be said for confi dence. Employees who are well trained don’t have to struggle with the answers, look it up or check with the manager. Th ey are sure of themselves and their recommendations because they truly understand what is best for that particular customer and vehicle. And since they regularly receive training on how to communicate with consumers, they have confi dence in their ability to handle any potential objections.
I have to admit that gratitude training may be diffi cult to fi nd. I’m not sure how you teach someone to be thankful that there is enough work to guarantee a regular paycheck. My guess is that some people are just born and raised in a way that makes them appreciative of everything they have. Th ey understand how the world works, so it’s natural for them take pride in their work and their customers. I’ve always said that I can teach any employee to do just about any job, but I cannot teach them to care. And while complaint resolution policies and procedures are a great way to demonstrate a higher level of commitment to customer service, they are nothing more
than signs on the walls if nobody follows through and resolves the dispute.
I follow Chicago sports teams religiously (except the White Sox). Walter Payton is the greatest running back I’ve ever seen, but he didn’t win the Super Bowl until they gave him a passing game, a defense and “da Coach.” Michael Jordan the player probably wouldn’t have become “Air Jordan the brand” without Scott ie Pippen and Phil Jackson.
Two young hockey players named Toews ( Jonathan) and Kane (Patrick) do not lead the Blackhawks to a Stanley Cup unless the entire organization buys into the concept of “One Goal” (winning the championship). And while the Cubs are fortunate to have an iconic landmark like Wrigley Field, the organization has wasted millions of dollars on talented players because talent doesn’t guarantee team leadership and chemistry, which has made it impossible to create a brand that puts the focus on winning championships.
Successful sports teams are no diff erent than tire retailers in that regard. Th ere must be a leader at the top who sets the tone for the entire company and holds everyone accountable. Star employees must lead by example and inspire co-workers to raise the level of their games so the team can succeed.
Expectations must be clearly communicated and reinforced on a regular basis so all of the employees understand how they shape the genetic code for the brand with each work order. And fi nally, there must be constant training for every job description in order to create a culture where customer service is the top priority.
Starbucks turned a cup of coff ee into an experience because every employee gets it. Tire retailers can use these same principles to distance themselves from the competition by making customer service part of their branding. ■
Kevin Rohlwing is senior vice president of training for the Tire Industry Association (TIA). He can be reached via email at [email protected].
5 stats that will startle youLiving up to expectations is not enough
Why is exceeding a customer’s expectations so important? Consider these statistics:
• 86% of consumers quit doing business with a company because of a bad customer experience, up from 59% just four years ago. Source: Harris Interactive, Customer Experi-ence Impact Report
• 91% of unhappy customers will not willingly do business with your organization again. Source: Lee Resource Inc.
• It takes 12 positive service experiences to make up for one negative experience. Source: “Understanding Custom-ers” by Ruby Newell-Legner
• For every customer complaint, there are 26 other custom-ers who have remained silent. Source: Lee Resource Inc.
• Happy customers who get their issues resolved each tell four to six people about their experience. Source: White House Offi ce of Consumer Affairs, Washington, D.C.
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MTD November 2011
By Norm Gaither
Hard to believe it’s fall already and time to think about your 2012 business budget. Or are you one of those tire dealers who doesn’t do budgets?
Sadly, there are many dealers like that. Budgeting may be the most important management
exercise that every successful store owner does all year. Without budgets, a business will be like a ship without a rudder. Budgets help all businesses stay on the course to bett er profi tability. Aft er all, isn’t this why we are in business?
Excuses, excuses, excusesMany tire dealers ignore budgets because they don’t
have the time to create them. Typically, store owners are working so hard “in” the business, they don’t make time to work “on” the business.
Many plan to ask their bookkeeper to throw one together if their banker asks if they have a budget. And many tire dealers who say they prepare a budget just copy last year’s numbers and hope to be able to beat them.
Either of these actions, of course, would be a wrong approach to preparing a successful budget for next year. Th ink about it, all successful companies, large or small, do budgets. Th at’s why they are successful!
Simple steps to gett ing startedMaybe now you are starting to ask if a budget makes
sense for your business. You’re wondering:
• How do you start? • How long will it take? • Who should help? • Should you involve your people? • Where do you get the information to prepare a budget?
Th ese are all good questions, so let’s try to answer them. In order to get started, I suggest that you fi nd a day or
evening when you won’t be interrupted by phone calls, customers or employees. Budgeting requires you to be able to think about what you believe will happen to your business next year.
Another way to look at a budget is to think of it as a plan or a road map to your business success. You would not think of driving 800 miles without a map or GPS. Budgets are the same thing — they off er directions.
Step one: Start by gett ing last year’s fi nancial state-ments by month.
Yes, I said by month. Some people do a budget showing the whole year in one column. While this is bett er than not doing a budget at all, it will not help you to compare your results by each month.
Now that you have last year’s profi t and loss statement by month, I suggest that you start by trying to do a budget for January. Th e best way is to have your bookkeeper set up a spreadsheet inserting last year’s actual numbers (see Chart #1 on page 54).
Notice we have captured as much detail as possible so we can identify and manage any area that does not meet our budget forecasts. Now, ask your bookkeeper, store manager and anyone else who is in a management role with your company: What has happened to our company since last January?
• Is the economy still soft ? • Have we lost a large customer? • Did we lose a valuable employee?• Will the city be working on the street in front of our store?• Did we gain a large customer?• Has the employment rate improved?• Do we have any new lines or services to off er?
All of these questions will impact what your revenue and profi ts will be for each month next year. Once you know all of the answers, you are ready to start to put the numbers
Business budget
Budgeting for successTh ink of a budget as a road map to profi tability
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on paper. Start with sales by category by putt ing down how much you will do in tires, labor, alignment, parts, oil, shop supplies and so on (see Chart #2 on page 56 ).
Th e natural instinct is for you to be aggressive since business has been slow and you want next year to be bett er. Resist this impulse, put down only the actual numbers you know you will do. Once you complete the sales part of the budget, then you insert the cost of each category. I strongly suggest that you do not show any payroll costs in any of these categories. Put all payroll costs in the section called payroll below the gross profi t line. Now subtract the cost by category from sales by category and this, of course, will give you the gross profi t by category. Complete the process by putt ing in the percentages by category. You then calculate the cost by category divided by the sales in that category to determine what the percent of cost is by product.
Finally, you do the same for gross profi t by category down to the total. You now know how much gross profi t you think you will make for January of next year. Th e secret, of course, is not to spend more than this amount.
Step two: Anticipate your expenses. Th is step will make your accounting people uncomfortable!
I suggest you start by doing the payroll for the whole store by category. Again look at Chart #1 and see how we break out the payroll. Ask your bookkeeper to give you the weekly pay for each person with spiff s and bonuses plus the amount of
payroll taxes. I suggest that you use this number for your budget. Your current weekly payroll will give you an idea of how much payroll you are paying compared to the gross profi t you expect for next year.
Now, instead of using the percent of sales compared to payroll, I highly recommend that you divide each payroll category by the total gross profi t. Our goal for payroll divided by total gross profi t is to be sure it never goes over 45%. If it is higher this will be an area that you will need to adjust so you can show higher profi ts.
Step three: Complete every other expense for the month.
I suggest using the most current information unless you know that a given expense will go up next year. For example, rent. If you are paying $8,000 per month but in June it will go to $8,500, then when you do June’s budget show the higher number. Aft er all of the other expenses are posted, then you should get a total of all expenses without payroll. You should now subtract payroll and other expenses from total gross profi t to see if you will make a profi t for next January. Remember, January and February are usually the two worst months of the year, so don’t panic if you show a loss for these two months.
Step four: Repeat this process for each month for the rest of the year.
Once you have completed the budget for all 12 months, hopefully you will see a profi t that satisfi es you. If you see a budget that is not to your liking, then the budget is telling you to make changes or you could lose money next year. Th e good news is this is why we do budgets! Th e budget says if I continue with these sales and expenses for the next year I won’t like the results, so I have to make some changes.
Resist the temptation to increase sales to fi x the problem. Everyone thinks this is the way to do it. You may be able to increase labor rates, which will help, but don’t change your other sales forecast. I strongly suspect that if you and your team did a good job on forecasting sales and gross profi t, the problem must be in expenses. No one, I repeat, no one, wants to reduce expenses, but this is the answer to success. Maybe for the fi rst time since you have been in business you are going to be forced to look at this problem: “I must cut my expenses.”
Step fi ve: Look at payroll. In my 30 years of consulting to the retail tire industry, I can
tell you the problem is almost always in payroll. We seem to want to carry a lot of people to give good customer service even when we don’t have the sales to support them. In the current economic conditions in our industry, sales are very soft . So the questions are:
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• Can I aff ord all of these people? • Can I aff ord all of this overtime? • Can I, as an owner, aff ord to continue to take out this much salary from the company?
If your budget for next year is not showing the profi ts you want, it’s probably because your payroll is too high. Once you have determined that you can’t increase sales or gross profi t, you must look at reducing payroll costs. If you compare your budget of payroll dollars divided by budget of gross profi t
dollars and the number is higher than 50%, you have too much payroll. Start by trying to reduce overtime. If your payroll is still too high, you may have to reduce the number of employees.
Step six: Look at your other expenses.You will fi nd that if you examine each one separately, there
is not a lot of room to reduce them. Rent is fi xed, utilities are hard to reduce. And even if you get three quotes every year, as you should, it’s hard to get insurance rates any lower.
Are you spending too much on ad-vertising? Are you gett ing the results from your current programs? Do you measure the results of each advertising and marketing program that you are paying for? Should you continue to be in the Yellow Pages? Is your website up-to-date and eff ective?
Th is is the one area that if you are not gett ing the sales results that you want, then spend less or spend this money on more eff ective programs.
Step seven: Compare next January actual results to your budget and prior year by month.
I believe that this is the only way for you to look at your profi t and loss report each month.
Chart #3 (on page 58), shows last year’s results compared to your budget and fi nally this year’s results. Your current profi t and loss statement may only show the current month and year to date. Th is is not enough information to run your business. Use Chart #3 every month and you will start to bett er understand your numbers.
Count your profi tsRunning a business is very hard, and
making a profi t is the most important thing in business. If you have never prepared a budget, now is the time to start. It may open your eyes to the potential of making more money just by changing litt le things in your busi-ness. It’s never too early to start making a budget. Start now and watch your profi ts grow. ■
Norm Gaither is president of Dealer Strategic Planning Inc. (DSP), a company that promotes “20 groups” in multiple industries. He is a well-known consultant in the automotive aft ermarket and has owned his own fi rm since 1984.
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Your tire store actual profi t & loss for the year xxxx Jan. Feb. March April May June July Aug. Sept. Oct. Nov. Dec. Total
Sales:Passenger tires 17,307 15,389 20,415 21,755 22,415 23,015 21,715 22,007 21,345 22,315 21,795 20,065 249,538 Other tires 1,242 1,577 2,445 1,296 1,555 1,642 1,335 1,235 1,454 1,397 1,405 1,565 18,148 Mechanical labor 20,715 19,455 25,617 26,415 27,005 27,615 25,345 24,315 23,755 21,986 22,669 21,785 286,677 Tire labor 4,125 3,699 5,895 6,177 6,222 6,109 4,621 4,709 4,822 5,106 4,995 4,623 61,103 Alignments 4,696 4,100 5,200 6,875 6,744 6,944 5,225 5,665 5,975 5,877 5,235 5,200 67,736 Parts sales 17,555 17,321 21,047 22,416 23,015 23,665 22,415 21,075 21,415 19,995 19,775 19,005 248,699 Shop supplies 1,412 1,381 1,668 1,966 1,844 1,845 1,645 1,495 1,377 1,472 1,377 1,234 18,716 Road hazzard 955 785 977 1,145 1,076 944 905 976 985 885 841 852 11,326 Other - - - - - - - - - - - - - Total sales 68,007 63,707 83,264 88,045 89,876 91,779 83,206 81,477 81,128 79,033 78,092 74,329 961,943 Cost of sales:Passenger tires 12,980 11,542 15,311 16,316 16,811 17,261 16,286 16,505 16,009 16,736 16,346 15,049 187,154 Other tires 869 1,104 1,712 907 1,089 1,149 935 865 1,018 978 984 1,096 12,704 Mechanical labor - - - - - - - - - - - - - Tire labor - - - - - - - - - - - - - Alignments - - - - - - - - - - - - - Parts sales 9,129 9,007 10,944 11,656 11,968 12,306 11,656 10,959 11,136 10,397 10,283 9,883 129,323 Shop supplies - - - - - - - - - - - - - Road hazzard - - - - - - - - - - - - - Other - - - - - - - - - - - - - Total costs 22,978 21,653 27,967 28,880 29,868 30,716 28,877 28,329 28,162 28,112 27,613 26,027 329,181 Gross profi t:Passenger tires 4,327 3,847 5,104 5,439 5,604 5,754 5,429 5,502 5,336 5,579 5,449 5,016 62,385 Other tires 373 473 734 389 467 493 401 371 436 419 422 470 5,444 Mechanical labor 20,715 19,455 25,617 26,415 27,005 27,615 25,345 24,315 23,755 21,986 22,669 21,785 286,677 Tire labor 4,125 3,699 5,895 6,177 6,222 6,109 4,621 4,709 4,822 5,106 4,995 4,623 61,103 Alignments 4,696 4,100 5,200 6,875 6,744 6,944 5,225 5,665 5,975 5,877 5,235 5,200 67,736 Parts sales 8,426 8,314 10,103 10,760 11,047 11,359 10,759 10,116 10,279 9,598 9,492 9,122 119,376 Shop supplies 1,412 1,381 1,668 1,966 1,844 1,845 1,645 1,495 1,377 1,472 1,377 1,234 18,716 Road hazzard 955 785 977 1,145 1,076 944 905 976 985 885 841 852 11,326 Other - - - - - - - - - - - - - Total gross profi t 45,029 42,054 55,297 59,165 60,008 61,063 54,329 53,148 52,966 50,921 50,479 48,302 632,762 Payroll:Store manager 2,251 2,103 2,765 2,958 3,000 3,053 2,716 2,657 2,648 2,546 2,524 2,415 31,638 Counter 4,503 4,205 5,530 5,917 6,001 6,106 5,433 5,315 5,297 5,092 5,048 4,830 63,276 Service manager - - - - - - - - - - - - - Service technicians 12,415 10,455 10,247 10,566 10,802 11,046 10,138 9,726 9,502 8,794 9,068 8,714 121,473 General service 1,351 1,262 1,659 1,775 1,800 1,832 1,630 1,594 1,589 1,528 1,514 1,449 18,983 Owner 5,600 5,600 5,600 5,600 5,600 5,600 5,600 5,600 5,600 5,600 5,600 5,600 67,200 Offi ce 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 1,200 14,400 Payroll taxes 2,071 1,877 2,160 2,241 2,272 2,307 2,137 2,087 2,067 1,981 1,996 1,937 25,134 Total payroll 29,391 26,702 29,160 30,257 30,676 31,144 28,855 28,180 27,903 26,741 26,950 26,145 342,104 Percent 65.3% 63.5% 52.7% 51.1% 51.1% 51.0% 53.1% 53.0% 52.7% 52.5% 53.4% 54.1%Other expenses:Advertising 2,040 1,911 2,498 2,641 2,696 2,753 2,496 2,444 2,434 2,371 2,343 2,230 28,858 Bank charges 188 156 215 295 301 326 412 466 413 409 323 307 3,811 Cash (over) short - - 135 - - 170 - 100 - 235 134 525 1,299 Computer costs 221 297 355 312 - 415 - 566 371 409 235 416 3,597 Credit card 1,466 1,377 1,576 1,585 1,604 1,695 1,497 1,488 1,433 1,397 1,391 1,333 17,842 Depreciation 1,287 1,287 1,287 1,287 1,287 1,287 1,287 1,287 1,287 1,287 1,287 1,287 15,444 Donations 200 - - - - - - - - - - - 200 Dues & subscriptions 135 - - - - - - - - - - - 135 Employee benefi ts 495 400 400 400 400 400 400 400 400 400 400 400 4,895 Interest 397 386 375 364 386 386 386 386 386 386 386 386 4,610 Insurance 1,394 1,394 1,394 1,394 1,394 1,394 1,394 1,394 1,394 1,394 1,394 1,394 16,728 Leases - equipment 160 160 160 160 160 160 160 160 160 160 160 160 1,920 Leases - vehicles - - - - - - - - - - - - - Offi ce supplies 401 374 412 516 341 409 775 366 389 375 415 509 5,282 Outside services 877 661 775 809 923 888 795 788 1,009 755 793 866 9,939 Postage 84 - 121 - - - 209 - - 315 - - 729 Professional fees 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 1,000 12,000 Rent 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 6,500 78,000 Repairs - equipment 343 - 235 135 419 - - 377 212 479 306 512 3,018 Repairs - building 474 266 412 791 - - 812 - - 575 - 794 4,124 Security alarm 130 130 130 130 130 130 130 130 130 130 130 130 1,560 Shop supplies 977 697 844 955 908 952 888 848 797 764 703 699 10,032 Taxes 400 400 400 400 400 400 400 400 400 400 400 400 4,800 Telephone 388 374 397 386 412 427 451 509 406 395 384 377 4,906 Tools 130 - 215 - - - 301 - - 376 215 - 1,237 Training - - - - 705 - - 777 - - 975 - 2,457 Trash 101 100 138 126 130 135 147 123 121 118 115 109 1,463 Travel & entertainment 503 344 465 380 412 488 1,533 - 507 477 452 395 5,956 Uniforms 310 265 327 310 312 301 296 285 301 299 286 245 3,537 Utilities 855 1,277 975 855 706 831 988 1,323 1,486 945 766 709 11,716 Vehicle 415 345 408 397 388 412 426 475 466 497 430 401 5,060 401(k) & pension 155 155 155 155 155 155 155 155 155 155 155 155 1,860 Miscellaneous 135 - 255 406 315 286 476 201 313 297 260 233 3,177 Total other 22,161 20,256 22,559 22,689 22,384 22,300 24,314 22,948 22,470 23,300 22,338 22,472 270,192 Other inc. or expenses - - - - - - - - - - - - - Net profi t before taxes (6,524) (4,904) 3,578 6,219 6,948 7,618 1,161 2,020 2,593 880 1,191 (315) 20,466
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Your tire store budget for the year xxxx Last January % Budget %
Sales:Passenger tires 17,307 25.4% 17,000 25.0%Other tires 1,242 1.8% 1,200 1.8%Mechanical labor 20,715 30.5% 21,000 30.8%Tire labor 4,125 6.1% 4,000 5.9%Alignments 4,696 6.9% 4,500 6.6%Parts sales 17,555 25.8% 18,000 26.4%Shop supplies 1,412 2.1% 1,400 2.1%Road hazzard 955 1.4% 1,000 1.5%Other - -Total sales 68,007 100.0% 68,100 100.0%Cost of sales:Passenger tires 12,980 75.0% 12,750 75.0%Other tires 869 70.0% 840 70.0%Mechanical labor - -Tire labor - -Alignments - -Parts sales 9,129 52.0% 9,360 52.0%Shop supplies - -Road hazzard - -Other - -Total costs 22,978 33.8% 22,950 33.7%Gross profi t:Passenger tires 4,327 25.0% 4,250 25.0%Other tires 373 30.0% 360 30.0%Mechanical labor 20,715 100.0% 21,000 100.0%Tire labor 4,125 100.0% 4,000 100.0%Alignments 4,696 100.0% 4,500 100.0%Parts sales 8,426 48.0% 8,640 48.0%Shop supplies 1,412 100.0% 1,400 100.0%Road hazard 955 100.0% 1,000 100.0%Other - -Total gross profi t 45,029 66.2% 45,150 66.3%Payroll:Store manager 2,251 5.0% 2,300 5.1%Counter 4,503 10.0% 4,400 9.7%Service manager - 0.0% - 0.0%Service technicians 12,415 27.6% 10,000 22.1%General service 1,351 3.0% 1,300 2.9%Owner 5,600 12.4% 5,600 12.4%Offi ce 1,200 2.7% 1,200 2.7%Payroll taxes 2,071 4.6% 1,800 4.0%Total payroll 29,391 65.3% 26,600 58.9%Other expenses:Advertising 2,040 3.0% 1,500 2.2%Bank charges 188 0.3% 180 0.3%Cash (over) short - 0.0% - 0.0%Computer costs 221 0.3% 225 0.3%Credit card exp. 1,466 2.2% 1,585Depreciation 1,287 1.9% 1,300 1.9%Donations 200 0.3% - 0.0%Dues & subscriptions 135 0.2% 135 0.2%Employee benefi ts 495 0.7% 495 0.7%Interest 397 0.6% 373 0.5%Insurance 1,394 2.0% 1,400 2.1%Leases – equipment 160 0.2% 160 0.2%Leases – vehicles - - 0.0% -Offi ce supplies 401 0.6% 400 0.6%Outside services 877 1.3% 880 1.3%Postage 84 0.1% 85 0.1%Professional fees 1,000 1.5% 1,000Rent 6,500 9.6% 6,800 10.0%Repairs - equipment 343 0.5% 200 0.3%Repairs - building 474 0.7% 200 0.3%Security alarm 130 0.2% 130 0.2%Shop supplies 977 1.4% 900 1.3%Taxes 400 0.6% 400 0.6%Telephone 388 0.6% 400 0.6%Tools 130 0.2% 125 0.2%Training - 0.0% - 0.0%Trash 101 0.1% 100 0.1%Travel & entertainment 503 0.7% 250 0.4%Uniforms 310 0.5% 300 0.4%Utilities 855 1.3% 910 1.3%Vehicle 415 0.6% 425 0.6%401(k) & pension 155 0.2% 155 0.2%Miscellaneous 135 0.2% 150 0.2% Total other 22,161 32.6% 21,163 31.1%Other inc. or expenses - 0.0% - 0.0%Net profi t before taxes (6,524) -9.6% (2,613) -3.8%
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MTD November 2011
Your tire store budget for the yearLast January % Budget % This January %
Sales:Passsenger tires 17,307 25.4% 17,000 25.0% 18,689 24.2%Other tires 1,242 1.8% 1,200 1.8% 1,655 2.1%Mechanical labor 20,715 30.5% 21,000 30.8% 24,366 31.6%Tire labor 4,125 6.1% 4,000 5.9% 4,800 6.2%Alignments 4,696 6.9% 4,500 6.6% 4,750 6.2%Parts sales 17,555 25.8% 18,000 26.4% 19,975 25.9%Shop supplies 1,412 2.1% 1,400 2.1% 1,635 2.1%Road hazzard 955 1.4% 1,000 1.5% 1,200 1.6%Other - - -Total sales 68,007 100.0% 68,100 100.0% 77,070 100.0%Cost of sales:Passenger tires 12,980 75.0% 12,750 75.0% 14,017 75.0%Other tires 869 70.0% 840 70.0% 1,159 70.0%Mechanical labor - - -Tire labor - - -Alignments - - -Parts sales 9,129 52.0% 9,360 52.0% 9,988 50.0%Shop supplies - - -Road hazzard - - -Other - - -Total costs 22,978 33.8% 22,950 33.7% 25,163 32.6%Gross profi t:Passenger tires 4,327 25.0% 4,250 25.0% 4,672 25.0%Other tires 373 30.0% 360 30.0% 497 30.0%Mechanical labor 20,715 100.0% 21,000 100.0% 24,366 100.0%Tire labor 4,125 100.0% 4,000 100.0% 4,800 100.0%Alignments 4,696 100.0% 4,500 100.0% 4,750 100.0%Parts sales 8,426 48.0% 8,640 48.0% 9,988 50.0%Shop supplies 1,412 100.0% 1,400 100.0% 1,635 100.0%Road hazzard 955 100.0% 1,000 100.0% 1,200 100.0%Other - - -Total gross profi t 45,029 66.2% 45,150 66.3% 51,907 67.4%Payroll:Store manager 2,251 5.0% 2,300 5.1% 2,395 4.6%Counter 4,503 10.0% 4,400 9.7% 4,200 8.1%Service manager - 0.0% - 0.0% - 0.0%Service technicians 12,415 27.6% 10,000 22.1% 11,375 21.9%General service 1,351 3.0% 1,300 2.9% 1,300 2.5%Owner 5,600 12.4% 5,600 12.4% 5,600 10.8%Offi ce 1,200 2.7% 1,200 2.7% 1,200 2.3%Payroll taxes 2,071 4.6% 1,800 4.0% 1,972 3.8%Total payroll 29,391 65.3% 26,600 58.9% 28,042 54.0%Other expenses:Advertising 2,040 3.0% 1,500 2.2% 1,526 2.0%Bank charges 188 0.3% 180 0.3% 143 0.2%Cash (over) short - 0.0% - 0.0% - 0.0%Computer costs 221 0.3% 225 0.3% 200 0.3%Credit card exp. 1,466 2.2% 1,585 2.3% 1,600 2.1%Depreciation 1,287 1.9% 1,300 1.9% 1,300 1.7%Donations 200 0.3% - 0.0% - 0.0%Dues & subscriptions 135 0.2% 135 0.2% 135 0.2%Employee benefi ts 495 0.7% 495 0.7% 495 0.6%Interest 397 0.6% 373 0.5% 370 0.5%Insurance 1,394 2.0% 1,400 2.1% 1,400 1.8%Leases - equipment 160 0.2% 160 0.2% 160 0.2%Leases - vehicles - 0.0% - 0.0% - 0.0%Offi ce supplies 401 0.6% 400 0.6% 289 0.4%Outside services 877 1.3% 880 1.3% 915 1.2%Postage 84 0.1% 85 0.1% 80 0.1%Professional fees 1,000 1.5% 1,000 1.5% 1,000 1.3%Rent 6,500 9.6% 6,800 10.0% 6,800 8.8%Repairs - equipment 343 0.5% 200 0.3% - 0.0%Repairs - building 474 0.7% 200 0.3% - 0.0%Security alarm 130 0.2% 130 0.2% 130 0.2%Shop supplies 977 1.4% 900 1.3% 966 1.3%Taxes 400 0.6% 400 0.6% 400 0.5%Telephone 388 0.6% 400 0.6% 417 0.5%Tools 130 0.2% 125 0.2% - 0.0%Training - 0.0% - 0.0% - 0.0%Trash 101 0.1% 100 0.1% 115 0.1%Travel & entertainment 503 0.7% 250 0.4% 375 0.5%Uniforms 310 0.5% 300 0.4% 310 0.4%Utilities 855 1.3% 910 1.3% 976 1.3%Vehicle 415 0.6% 425 0.6% 365 0.5%401(k) & pension 155 0.2% 155 0.2% 155 0.2%Miscellaneous 135 0.2% 150 0.2% 213 0.3% Total other 22,161 32.6% 21,163 31.1% 20,835 27.0%Other inc. or expenses - 0.0% - 0.0%Net profi t before taxes (6,524) -9.6% (2,613) -3.8% 3,030 3.9%
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MTD November 2011
L arry Brandt is a man who believes in education. As a college student, Brandt unloaded tires at a Min-nesota warehouse on his summer break. He broke
into the tire business full time in 1979 as a wholesale tire and antifreeze broker. In 1985 he merged that company with Tires Plus and he became the vice president of wholesale for the fi ve-store company.
Brandt was named president of Tires Plus in 1995, a position he held until the company was sold to Morgan Tire & Auto in August of 2000. In the 15 years he was on
the Tires Plus senior management team, the number of stores grew from fi ve to 144. He was chairman of the Tire Alliance Groupe from 1998-2000, and is still a member.
In 2001 he started MSB Tires LLC with two former executives of Tires Plus, Dan Gullet and Tom Gegax (above). MSB operated seven Tires Plus licensees in Minnesota and Iowa until he sold that company to TBC Corp. in October 2010. He is currently president of the United Tire Group. He also started Brandt Marketing, a consulting company that helps tire dealers. He has a consulting agreement with Comdata Corp., which helps automotive fl eet companies consolidate and control their fuel and maintenance.
As the Tire Industry Association’s (TIA) incoming president, he knows how important it is to stay educated in order to run a successful tire business. TIA represents all segments of the tire industry, and Brandt wants to help advance all of them.
Brandt has a unique perspective when it comes to run-ning a tire business. He was president of Tires Plus when
it was an independent retail chain. He remained involved when it became company-owned by Bridgestone Retail Operations LLC. He says there are not a lot of diff erences between running seven stores or 144 stores.
“Multi-store management always comes down to systems and people,” Brandt explains. “If an individual only had one store he would still have to have systems in place so the store could run effi ciently when he wasn’t there. When you run a 144-store chain you have a lot of support people to do diff erent functions such as marketing directors, trainers and purchasing agents.”
Brandt says smaller chain and individual store owners need to be aligned with strong suppliers that off er training and group discount programs for purchasing tires and parts. He believes that as a store owner, you need to be under some form of marketing umbrella.
“At corporate Tires Plus, before we sold, we were the umbrella,” he says. “As a licensee, we aligned ourselves under that same umbrella managed by Bridgestone/Firestone. Th ere are many umbrellas out there. I feel you need to be under one of them to be successful.”
MTD: You have a strong retail background. How does TIA address the needs of retailers?
Brandt: I think the most important need that we meet for retailers is in training and education. TIA released the updated Automotive Tire Service (ATS) program this year and also launched the new advanced tire pressure monitoring system (TPMS) Training Program. Both programs give technicians comprehensive training on passenger and light truck tire service including lift ing, tire balancing, repairing, mounting/demounting/infl ation, lug unit torque/clamping force and TPMS.
We have also released the 2011 version of our widely successful TPMS relearn procedures, as well as OE and popular aftermarket replacement part numbers and torque specs. Retailers who use our training programs and resources can reduce their liability and gain a competitive advantage with a qualifi ed workforce.
We also have a new health insurance program for tire dealers. We continue to off er liability and workers’ comp insurance programs through our endorsed member benefi t programs.
MTD: What legislative issues will you and TIA focus on over the next 12 months?
Brandt: Our top issues will be to be selected for the National Highway Traffi c Safety Administration (NHTSA) consumer education program. Other top issues are to
TIA president
Larry Brandt: TIA must growKeeping its members and the industry educated is another priority, says the incoming president
Larry Brandt (center), Dan Gullet (left) and former MTD Tire Dealer of the Year Tom Gegax ran Tires Plus in 1998.
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TIA president
make permanent the repeal of estate tax, and to repeal or lessen the burden on mandatory health insurance.
We plan to extend the work opportunity tax credit to returning vets and disadvantaged youths. We also plan to push for the passage of H.R. 966 (the Lawsuit Abuse Reduction Act), to push for a fi ve-year extension of the Federal Aid Highway Bill (with no motor fuel tax increases), and to oppose the privatization of highways, a national weight-distance tax, and any proposed increase of the FET on new truck tires.
We also want to repeal the retroactive liability provision of Superfund (which has tire dealers tied up in at least 31 states for proper disposal of tires, used oil, used batt eries and fi lters). We want to repeal or end the Chinese tariff s. We have position papers on all of these issues. We also have initiated a state legislative/regulatory newslett er and will be more active and visible on that level.
MTD: What has TIA done to improve the Global Tire Expo (GTE)?
Brandt: TIA has expanded the education track to include Green@Noon. We have held meetings with all the tire manu-facturers regarding having a presence at the Specialty Equip-ment Market Association (SEMA) Show, and have relayed
feelings and concerns of manufacturers to SEMA’s board of directors. We will continue to work with SEMA to strengthen our partnership and ensure that the GTE will be the tire show for the industry.
MTD: Is overseeing the gov-ernment-mandated national tire maintenance consumer education program still a priority?
Brandt: Our top legislative/regu-latory goal is to have the National Training and Simulation Association (NTSA) outsource the tire consumer education program to TIA. We believe we are uniquely positioned with the tire manufacturers, retailers and con-sumers to make this a very meaningful and positive program.
MTD: How many members does TIA have? How many of those mem-
bers are independent tire dealers?Brandt: TIA has 5,595 members and approximately 80%
are independent tire dealers (not a part of national chains).
MTD: As TIA president, what will be your agenda? Brandt: In 2011 Mike Berra Jr. and myself started to transi-
tion TIA into an association that could not only survive but grow in the future. Th e association picture has changed in the recent economic downturn and I’m pleased to say that TIA is in a strong position now for the future, and is ready to grow and prosper. I plan to continue this transition and make TIA an even stronger association in the future.
In my view, TIA is about training and government aff airs. We have an excellent training team led by Kevin Rohlwing and we need to capitalize more on that team. TIA needs to be the training center for all types of tires — and we will be.
Th ere have never been more political issues that could aff ect the independent tire dealer than what is currently going on in Washington, D.C. TIA is extremely blessed to have an individual like Roy Litt lefi eld to represent and lead our independent tire dealer needs. We will be communicating what’s going on in Washington and how it could aff ect dealers’ business more than ever before.
MTD: If you could accomplish one thing as TIA presi-dent, what would it be?
Brandt: Once I became a member of the TIA board, I was amazed that there wasn’t a bett er relationship between TIA and the Rubber Manufacturers Association (RMA). Th e two probably agree on 90% of the issues facing our industry today. We need to be talking to each other more. When there is common ground, we need to have the industry speak with one voice. When we don’t agree, we respectfully agree to disagree. ■
For the next year, TIA President Larry Brandt will place an em-phasis on education and training. “Without trained employees, you cannot survive in the automotive service industry today.”
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SUBJECT VEHICLE: 2010 Audi Q7.SPECIAL TOOLS NEEDED? Yes, a torque wrench (V.A.G. 1410), and socket (V.A.G. 1410/1).
If a wheel sensor of the tire pressure monitoring system (TPMS) on the 2010 Audi Q7 senses a signifi cant loss of air pressure in one or more tires, the sensor(s) sends signals (values) to the tire pressure monitoring antenna. Th e antenna transfers the values to the tire pressure control module.
Th e control module then transfers the values to the driver information system in the instrument cluster. Th en it dis-plays a fl at tire symbol and the text message “CHECK TIRE PRESSURE.” Aft er a few seconds, the message is replaced by the regular display; press the “CHECK” butt on to show the message again. If tire pressure is signifi cantly diff erent in one or more tires, check the tire(s) for damage or foreign objects. Replace the tire(s) if necessary.
Th e low pressure warning light in the instrument cluster illuminates when:• Tire pressure is 7 psi (48 kPa) lower than it should be;• Wheel(s) are installed without a tire pressure sensor;
• Winter tires are installed;• Incorrect pres-sure sensors are installed.
To remove an old sensor, follow these steps.
1. Remove tire and wheel assembly from the vehicle.
2. Demount the tire from the wheel following the tire changer manufacturer’s instructions while paying special att ention to the following to avoid damaging the pressure sensor:
a. Press the tire off both rim edges on the opposite side to the metal valve.
b. Turn the wheel on the tire mounting equipment so that the valve/tire pressure sensor is opposite the mounting head.
TPMS
Special tools needed for the Audi Q7New or relocated tire(s) must be initialized.
Figure 1
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NOTE: To perform this procedure, a torque wrench (V.A.G. 1410) and socket (V.A.G. 1410/1) are required.
3. To remove the Beru System tire pressure sensors:a. While holding the tire pressure sensor against the wheel
rim, remove the torx fastener. See Figure. 2.b. While counter-
holding the metal valve body, remove union nut and metal valve. See Figure 3.
c. Remove and dis-card the valve insert from the valve stem.
To install a new sen-sor, follow these steps. NOTE: When reusing tire pressure sensors, inspect the connection between the sensor and the metal valve for damage. It is also necessary to replace the valve nut, nickel-plated valve insert, sealing ring, sealing washer and valve cap when reusing tire pressure sensors. See Figure 1.
1. To install Beru System tire pressure sensors:
a. Install the metal valve body, and while
counter-holding the valve (for example, 2 mm twist drill or counter holding tool — see Figure 1 and Figure 3), tighten the union nut to specifi cation.
b. Press and hold the tire pressure sensor against the wheel rim and tighten the torx fastener to specifi cation. See Figure 2.
2. Mount the tire on the wheel following the tire changer manufacturer’s instructions, paying special att ention to the following to avoid damaging the tire pressure sensor:
a. Make sure that the tire does not contact the tire pressure sensor while mounting the tire.
b. Turn the wheel on the tire mounting equipment so that the valve/tire pressure sensor is opposite the mounting head.
3. Install the tire and wheel assembly to the vehicle.
4. Adjust the infl ation pressures of all tires (including spare tire), and balance the tires. Store the new tire pressures in the system. NOTE: Whenever tire pressure is adjusted, the adjusted pres-sure has to be stored again. If a tire was changed or relocated, the new or relocated
tire(s) must be initialized. Check and correct the tire infl ation pressures of the wheels on the vehicle as provided on the tire pressure label. Aft er properly infl ating the tires, current pres-sures have to be stored in the monitoring system. Th e system then implements an automatic adaptation process.
When a tire pressure monitoring system malfunction occurs, it will be indicated when the ignition is turned ON and the yellow malfunction lamp in the instrument cluster will fl ash for one minute and then stay ON. Th e yellow malfunction lamp cannot be switched OFF by pressing the multimedia system control butt on on the center console. Th is could be caused by the following:• If this symbol is displayed at the end of a learning phase, it means that the system cannot recognize which wheels are mounted on the vehicle. Th is may be because one or more wheels were mounted lacking a wheel sensor.• A wheel sensor or other component may have failed.• Th e system recognizes more than four wheels are present on the vehicle (i.e., when additional winter tires are being transported on the vehicle and are transmitt ing data).• A wheel was changed, and the new tire was not initialized.• If the vehicle is being operated with snow chains, system func-tion can be aff ected by the shielding eff ect of the chains.• Th e system is not available due to a malfunction.• Other transmitt ing devices with the same frequency are emitt ing an electromagnetic fi eld which can cause temporary interference in the system.
To store tire infl ation pressures, follow these steps .1. Adjust air pressure in all tires to specifi cations (as provided
on the vehicle’s tire pressure label).2. Turn the ignition on.3. Select “CAR,” “SYSTEMS,” and “TIRE PRESSURES
MONITORING.”4. Press the multimedia control butt on on the center console
when in the Tire Pressure Monitoring menu.5. Th e new pressures will be saved when the vehicle is
driven. ■
Information for this column comes from Mitchell 1’s ”Tire Pressure Monitoring Systems Guide” for domestic and import vehicles through 2010. Headquartered in Poway, Calif., Mitchell 1 has provided quality repair information solutions to the automotive industry for more than 80 years. For more information, visit www.mitchell1.com.
Figure 2
Figure 3
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MTD November 2011
I have to think about it” is only six words, but it says a lot — or not.
We used to say at the sales counter, “Get the greenbacks, not the comebacks.” Of course, money in the cash drawer is al-ways bett er than a promise.
No matter how good your sales presentation, your listening skills, your reputation, sooner or later every sales person will hear these dreaded words, “I have to think about it.” Because “I have to think about it” is vague, it can mean a variety of diff erent things. It can mean “No”; it can mean “I’m not comfortable”; it can be a stall tactic. Whatever it is, it’s not clear, and to get the necessary clarity, it’s going to require more eff ort to discover the real reason behind the objection.
Your prospective customer is att empting to close the door on your presentation, and you must, in eff ect, put your foot in the door. It’s awkward at best, and traditional techniques for overcoming objections just don’t work.
Find the common groundThe primary reason this scenario is so awkward is
because you know that your next words will determine if you’ll ever see that customer in your store again. Too much pressure and they are gone forever. Th e “just-right words” may salvage a sale either now or later.
Either way, you must fi nd common ground! Remember, you’re not the only one feeling a litt le awkward, and it’s your job to control the conversation, to strengthen the trust required to make the sale now or at a later date. If at all possible, you never want to end awkwardly.
Common ground is found initially by asking for a few more moments of the prospect’s time. Th en you must reiterate important points in the original dialog, att empting to establish or re-establish a deeper level of trust that will facilitate your prospective customer to reveal the true nature of his/her objection, remembering that some customers do just have to think about it.
Common ground is found by re-focusing on the prospect’s needs. Th is works because the needs have not changed,
which is a point you and the prospect can both agree on. Agreement, of course, is important. Depending on the response you receive, you may want to ask more direct questions. “Is my price too high?” “Were you looking for a lower-priced product?” “You don’t have the time to get the service now?” Is there anything I can do to help you make up your mind?” Th ese types of direct questions require direct answers that will give you the insights you need to either press on or back off .
Handling emotionsRemember that you are never in complete control of
the sales process because a lot of what’s taking place in the exchange is emotional. Emotion plays a part in everyone’s decision process. I suggest that you may att empt to personalize the conversation with “you” words rather than “I” words. “If you have the work done now, you’ll drive away safer and you’ll fi nd that blah-blah-blah,” or “If you schedule an appointment now for tomorrow, we can give you a ride to work and pick you up, if necessary,” or, “You’ll enjoy more peace of mind if you get this taken care of now.”
All of these comments, and a million others like them, help express concern for the prospect and your desire to help. One of my favorite sales techniques for showing or demonstrating empathy is the “feel-felt-and found” method. It goes something like this, “I know how you feel. I’ve felt the same way, but let me tell you what I’ve found.”
In the case of Mr./Mrs. I-have-to-think-about-it, it sounds like this, “I know how you feel. $750 is a lot of money for two tires and an alignment. I felt the same way a couple of months ago when I had to replace all four of my tires.
What I found is the family van rides much nicer and my wife is much happier. I had to do it.”
Any way you choose, the key, as always, is trust. A sincere and concerned approach that is followed by more sincere concern will help when your prospect requires more time or more convinc-ing. When addressing or
re-addressing the prospect’s need to “think about it,” don’t be defensive, be more helpful, be more empathetic. Listen more carefully, and be att entive to body language. ■
Wayne Williams is president of ExSell Marketing Inc., a “counter intelligence” fi rm based in La Habra, Calif. He can be reached at [email protected].
Counter intelligence
‘I have to think about it’Countering these dreaded words at the sales counter
The feel-felt-found sales technique shows you empathize with your customer.
Emotion plays a part in everyone’s decision process.
By Wayne Williams
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Mobile tagging is the pro-cess of providing data read from tags for display
on mobile devices (source: Wikipe-dia). Th ese are commonly encoded in a two-dimensional barcode and use the camera of a cell phone as the reader device. Th e content of the tag code is usually a URL for information that is addressed and accessible through the Internet.
Th ere are dozens of diff erent 2D barcode standards. However, there are approximately 12 that are popular today with mobile phone users. Th e common ones used for mobile tagging today are listed in the chart on page 70. In addition, Microsoft has developed their own proprietary tag identifi ed by small multi-colored triangles.
Do you use mobile barcodes? You may have noticed that they are popping up everywhere. You almost need a smartphone to read your favorite magazine these days. Every ad and article seems to have a mobile barcode printed next to it. Take a walk down Main Street, USA and you will fi nd mobile barcodes in many storefront windows. Stroll through a shopping mall and you will fi nd them in store entry ways and throughout store shelves everywhere.
Sett ing the standardQR-Codes seem to be the most popular. Th ey are square
diagrams that look like they are comprised of many small litt le boxes. Th ey have slightly larger solid boxes in three of the corners — it almost looks like a maze.
To read them, you need to download an app on your smart-phone, and most of the QR code-reader apps are free. Some of the popular ones are RedLaser from Occipital, Scan from QR Code City, QR Reader from TapMedia, LTD, Nokia Reader from Nokia, and i-nigma Reader from i-nigma.
For you, it’s not important which reader is used, except for the fact that most readers can only read one type of code, their own.
Th ere are some open-source readers available that can read more than one code standard, and many smartphone users have already fi gured out how to use them.
Gett ing startedWhat’s really important is what these mobile barcodes
can do for you and how you can use them in your business. To use them to your advantage, you need to be able to create them. Th ere are many free, and not-so-free, mobile barcode generators; most people prefer the free ones.
Th e generators are the soft ware tools that create those cute litt le icons. Once you decide which standard you want to use, you can easily download an app that creates the 2D mobile barcodes and you can start creating them. When you create a mobile barcode image, it is saved as a graphic fi le, like a .gif, .jpeg, or .png fi le. You can att ach the fi le to emails or upload them to a website just like any other graphic image.
You can also use them in print to include them on lett erhead, invoices, window displays, billboards, advertisements, mailings, counter posters, showroom posters, and business cards. Th e list is endless; I think you get the point.
Now what?What information can you put in these mobile barcodes?
Lots of things, and this is where the marketer in you should be gett ing excited.
You can encode something as simple as a phone number, or a website address. Or you can get fancy and include a specifi c website landing page, an SMS (text) message, an email message, contact details (such as a Vcard), an event that is automatically entered into an electronic calendar, a Google maps location, a social media launch, a link to a YouTube video – again, the list is endless.
You will be amazed at the information you can share with customers by using mobile barcodes, and at just how powerful
Business insight
Mobile barcodes: What’s with all the little boxes?Tag code uses appear endless and are limited only by your imagination
By Wayne Croswell
Microsoft has its own propietary tag (right) that connects customers to its website.
Smartphone users can take a photo of the barcode im-age and be connected directly to your website.
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Business insight
they can be. Here’s a great example, you can create a mobile barcode that will compose text message on a phone and send it. All the user has to do is scan the mobile barcode with their smartphone and press send, and off goes the text message sharing your business informa-tion with a “friend.” Th at is social media
marketing at its fi nest – instant sharing of information!
Th ese barcodes also can initiate a text message and send it directly to the user. When scanned, the user will receive a text message in their inbox reminding them about your business or even off ering them a discount for repeat business.
Mobile barcodes can also contain links to a webpage that provides extensive information about products or processes. Th ey can even link to a video that explains a safety feature, or shows the reasons that certain services need to be performed, like the importance of tire rotations.
I found one of these codes in a magazine ad recently. Th e advertisement had several pictures of clothes and accessories and a model was pictured standing right in the middle of the ad. Once I scanned the code, the model’s image appeared on the screen of my phone. It then allowed me to drag the various outfi ts and accessories toward the model; as I did this, the items would instantly appear on the model on the screen of my phone. How cool is that? Imagine doing that with a car, some tires, and wheels. Even cooler.
Th ink of the possibilities!Now it’s time to get creative; imagine
what you can do with these litt le boxes! You can put them on tires and other prod-ucts in your showroom. When scanned, they could direct the customer to a video that describes the tire, explains its features and benefi ts, and even gives pricing in-formation. You can put a barcode in your showroom window, or on the showroom
wall, that invites users to a website and allows them to join your online loyalty club – or sends them a text message to remind them to sign up.
You can include these barcodes in your print ads to direct customers to your website, or to a video that promotes this week’s specials or even an upcoming event. Imagine putt ing one on a billboard. People passing by the billboard can use their smartphone to read the mobile barcode and get information about your business while on the road. Th e possibili-ties are endless and only limited by your imagination.
I think one of the most purposeful uses for a tire dealer is putt ing links to videos or webpages that give customers more information about what you are promoting. This isn’t something you could do easily before the invention of mobile barcodes.
What’ll they think of next? ■
As CEO and president of WECnology LLC (www.wecnology.com), Wayne Croswell is a “complimentary technology advisor” for independent tire dealers. Croswell can be reached at [email protected] or (603) 249-5530.
There are dozens of different 2D barcode standards. Here are the common ones used for mobile tagging today.
This QR code will direct your mobile device to MTD’s website.
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By Doug Trenary
M any years ago, I read a cover article in Fortune magazine titled, “Why do companies fail?” Th e article had huge depth of research and
many examples — and these examples of companies who went by the wayside in some cases were titans at the time like Eastern Airlines — remember them? Th e organizations noted covered many diff erent industries and even diff erent time frames and economic conditions at the respective time.
Th e moral to the article: All of these companies had very detailed plans on how to operate and press forward. What did they all lack? Execution of their own plan.
What about your tire dealership? Do you have game plan? I know you do or you wouldn’t be in operation. And you might be very successful. Do you as an owner or manager feel good aft er each team meeting that the key issues for operations, sales and service got up onto the table? Do you spend money on training and then hope the training gets put into action? Do you have store
or division managers and associates that nod their head in agreement when asked to do something new but they won’t do it? Are your sales, service eff orts, collections and profi ts suff ering because they won’t?
If you answered “yes” to any of these questions, you’re in common company – you notice I didn’t say good company — because it’s not a good condition. But it is a common condition — a common and very costly problem.
What’s the problem? Very simply, human beings resist change. Yet change is the key ingredient needed to raise the bar, to lead at new levels, to gain new skills, and to sell more tires, add-ons and service in this tight economy. Even more specifi cally, it is personal change in one person — one of your employees at a time, that makes all the diff erence.
So what can you do as a leader? Let’s start with defi ning the challenge.
Challenge: Lack of execution, taking action and fol-lowing through because an employee does not want to change to do the new behavior.
I see this all the time with tire dealers. A manager is fi red up aft er a training or coaching session — they’re loaded with new sales knowledge or how to more eff ectively communicate with their team. Th ey agree in a meeting to tighten their follow-up and hold their store team associates more accountable. But the test comes in a couple weeks — maybe 30 days — aft er these commitments. All you have to do is ask them, “How are the changes you agreed to make coming? How are they working with your store?” Th en comes the answer: “Well, I got so busy, I haven’t been able to do that yet... but I will though when things slow down and I can get my head above water.” Slow down? Who wants their retail dealership or commercial operation to slow down? I’m sure you don’t.
Solution: Applying behavior-change support, follow-up and accountability.
Now, these recommendations can get testy. Th ey are not easy. You may face resistance by any given employee — but you may not. You have to have a mind set of risk aversion (the cost to you of not having an employee make real changes) and say to yourself as a leader: “I must assume Bart is not going to change — even though he committ ed to. Th is is just the way most people are. So I have to stay with him closely for a few weeks to make sure he takes action on his new plan. And I need to make sure he gets
Business insight
Plans are nothing without actionsSalesMinded dealers know that real change is the key to execution
What’s the cost to you of having an employee who won’t change?
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going on what he understands he needs to do that is new for him. Our store needs the new Bart, not the old Bart.” Here are some concrete actions you can employ to help any one of your team members change behavior and execute the plans you have in place.
SalesMind principles applied: Th e learning keys in play are clarifying the absolute necessity of change, clearly defi n-ing the new actions expected, and then holding an employee accountable very quickly to begin those new actions:
• Clarity: SalesMinds know that plans are nothing without action — they have no eff ect on tire sales, leading people or productivity. You must defi ne on paper, in the open, and with given employees in personal counsel with them what it is you want them to change now. Plus get buy-in and ideas from them on how they think they should make those changes. Focus, too, on the benefi ts to them! Don’t be afraid to just simply ask them what they think it takes to perform at their best possible level — the one that drives your sales and service results.
• Defi nition: SalesMinds create writ-ten action plans. Defi ne on paper (you and the employees do this together, but get them to write it down because it’s their commitment) the exact fi rst-step actions today that need to be taken to sell more tires and service faster. Is it asking bett er questions of customers? Listening more att entively? If you’re a wholesaler or commercial operation, is it making more eff ective calls and work-ing on the skills of the sales process or making cold calls? Is it closing skills? Is it the skill of follow-up? Whatever the actions are, trap them on paper! Have the employee sign at the bott om that they agree to take these actions (which are changes) starting now, not later.
• Accountability: SalesMinded lead-ers again know people — that a person tends to put off or delay changing the way they do things and default back to their old way — the way that no lon-ger works. So, you the leader and your management team must lay down that you will review action plans each week with each key employee. Subsequently, this is the model that one of your store managers will also deploy with their assistant managers — and on down the line to the technician or counter people. Your goal is make it clear that the way you stay on our store team is to do right now the best things that will generate
the best results — or our team is not the best place for you. Because that’s the goal — results, not plans. ■
Doug Trenary, president of Doug Trenary’s Fast-Track Inc., is
an award-winning author, speaker and teacher who has helped companies of multiple sizes, including independent tire dealerships, increase sales and productivity since 1985. His book, “Th e Sales-Mind,” focuses on how to establish strong positions with yourself, your buyers — and your time. For more information, email him at [email protected] or call (404) 262-3339.
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MTD November 2011
Your turn
Dear Editor,It was the hybrid Toyota Prius, introduced on the U.S. market
12 years ago, that was the real game changer for the industry, as Michelin radial ply tires were in the U.S. in the 1960s.
In contrast with the Honda Insight, a two-seater, introduced two years earlier, the Prius, although classifi ed as a small car, off ered ample space for fi ve adults, including head and leg room, as well as a spacious trunk as compared to a mid-size passenger car, because of its highly effi cient design, including its interior to exterior dimensional ratio. Th is, as compared with other cars, made for a much more eff ective use of the car’s displaced volume in proportion to its total capacity, hence reducing weight, and therefore manufacturing cost, and on which Toyota lately improved upon with its latest Prius line of cars (the Prius V, the Prius C, and a lower cost fi ve-door coupe, and a Prius 7 passenger station wagon). When well-equipped, the current U.S.-sold Prius, weighing only 3,250 pounds, delivers 52 to 53 mpg under city/highway driving, and costs less than $25,000.
Today the car, for practical purposes, meets the fuel economy standards recently mandated by the U.S. government for 2015. How about that for product development? As with the radialization, the U.S. automobile industry again got caught fl at-footed by a foreign producer.
Of importance is that the Prius was developed and produced based on the system approach, which I introduced at Ford years ago for the radialization. Th e Prius was not an existing Toyota model on which a hybrid propulsion system was merely installed. To be really eff ective, such power train must be part of a vehicle specifi cally developed for it, that is to say “tuned,” and featuring high manufacturing precision, low frontal area,
low aerodynamic drag, low overall rolling resistance, low mass (3,200 pounds), and low friction from all bearings operating throughout the vehicle, and, fi nally, low tire/wheel assembly weight and rolling resistance, as well as much more reasonable
tire/wheel dimensions.Th erefore, forget plus-sizing, and
keep in mind that the eff ectiveness of low-power wastage tire/wheel systems grows as a percentage of total vehicle energy consumption. Furthermore, since the selection of the proper tire/wheel system is of crucial importance to the perfor-mance and operational effi ciency and economy of hybrid-propelled vehicles, I foresee a back-to-basics
eff ort based on fundamental engineering principles, and this in view of the socio-economic circumstances facing America today.
Finally, the metamorphosis currently taking place in the tire and tire/wheel system industry would have never hap-pened without the U.S. government fi nancial backing (i.e. the taxpayer), for lately the industry, on its own, has neither the guts nor the fi nancial means to do something really good and diff erent for the benefi t of consumes.
Th e question is: Who will pay to train the maintenance personnel to properly service hybrid vehicles in view of the limited technical labor skills available in the U.S. today, the government?
Jacques Bajer, PresidentTire Systems Engineering Inc.
Grosse Pointe, Mich.Equipment to service hybrids can cost thousands of dollars,
Bajer tells us. And add to that the considerable cost for technical training classes. Th ere will be extra costs for servicing diesel hybrids. Like Bajer says, it’s a game changer.-Ed.
Planning on servicing hybrids? Expect investment in equipment and training to be costly, reader says
“Tires sales have been soft, but are expected to increase over the next 12 months. Service is the driving force of increased sales and gross profi ts.”Paul Bernstein, PrincipalDelta World TireNew Orleans, La.
“Sales dollars will increase while units sold are down.”Marty Gilkes, General Manager Jee Wholesale Tire LLC Houston, Texas
Join Modern Tire Dealer’s National Advisory CouncilEach month, Modern Tire Dealer is guided and infl uenced by a select group of readers — members of our National Advisory Council. Th ese members’ opinions are the heart of the monthly Ludwig Report, compiled by well-known industry analyst Saul Ludwig. If you’d like to join this prestigious group, please let us know. We’d love to hear from you. Contact Editor Bob Ulrich at [email protected] or call (330) 899-2200, ext. 11.
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