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Tire Dealers Adapt to ‘New Normal’ During the Pandemic

Running a tire dealership during the coronavirus pandemic has been anything but normal. Dealers had to pivot quickly, modifying business operations to contend with a “new normal” way of doing business that involved making immediate and well-executed changes to safeguard both employees and customers, and keeping their businesses afloat.

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Tire Review reached out to four independent tire dealerships to get a pulse on their business during these turbulent times, specifically some of the “takeaways” they learned from dealing with the effects of the coronavirus pandemic on their business, changes they made to their business that will become permanent changes, some of the “silver linings” that surfaced, and, finally, the underlying factors that remain at the core of how they operate a successful dealership today.

Dealer-article_Alpio

Alpio Barbara, owner of Redwood General Tire in Redwood City, California, says the coronavirus pandemic brought about many changes to his business—some good and some bad. As an essential business, Redwood General remained open since the onset of the COVID-19 pandemic.

“This means that we were open during the slowest times in the economy, and we had to find a way to survive,” says Barbara. “This meant we needed to capitalize on every single vehicle that came through our doors.”

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One of the key takeaways he learned through the process was that, with the right job mix, he could still make money even if business was significantly slower. The extra time allowed his team to “capitalize on the vehicles that were already in the shop, instead of taking in more cars. As a result, car count went down, but gross profit percentage went up.”

And, while the increase didn’t quite cover the overall loss of business, the Redwood General team learned that by focusing on achieving the ideal job mix— increasing higher-profit jobs and reducing the number of lower-profit services like oil changes—it is possible to actually increase profits with a lower car count.

Another key takeaway was that they learned how varied customers’ comfort levels can be while getting their vehicles service during the pandemic. “We had everything from those [who were] so worried about the pandemic that they didn’t want us to drive their car, to those who refused to wear a mask because they believe the pandemic is fake,” says Barbara. In turn, they had to find a way to deal with their customers that would make them feel safe and confident about doing business at Redwood General Tire.

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“To combat some of the fears that our customers may have, we make sure that every employee in the showroom has a mask on, we put bottles of hand sanitizer on every counter, and we even purchased a disinfectant sprayer to disinfect vehicles once we are done working on them,” he explains.

At the end of the day, Barbara says he and his team continue to strive for an excellent experience for each and every customer. “At the core of how we run our dealership is the emphasis on customer experience. Throughout the pandemic, it has been a challenge to continue to provide that excellent experience as peoples’ standards for safety and cleanliness changed completely. We had to adjust our business practices to match those standards,” says Barbara.

Dealer-article_Chris-Mitsos_Mountain-View-Tire_Dealer

Chris Mitsos, vice president of Mountain View Tire & Service, with 31 stores throughout southern California, says one eye-opener while running his business during the pandemic is that “you can still operate profitably despite being 10-25% down in revenue with the proper adjustments.”
Some of those adjustments involved changes to business operations, including:

  • Shorter store hours. His dealership now opens at 8:00 a.m. and closes at 5:00 p.m. It used to be open from 7:30 a.m. to 6:00 p.m.
  • Limiting the hours any one associate is allowed to clock for the pay period.
  • Cutting back on non-essential expenses (for example, reducing trash pickup from twice a week to once a week).

And while some dealerships discovered silver linings, Mitsos says he hasn’t really found any. “There are always winners and losers when something like this happens.”

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But what has bridged the gap for him is continuing to create that “Wow Experience” with each of the dealership’s customers as often as possible—albeit a bit more challenging with a limited staff in some locations, Mitsos notes. An integral part of providing optimal customer service is offering world-class tires, service parts and motor oil to ensure highest-quality repairs, he adds.

“The customer still comes first almost all of the time. The exceptions now include the health of our employees. We will not allow a customer in one of our stores without a mask. This has angered some customers.

Dealer-article_Chris-Monroe

Chris Monroe, owner of Monroe Tire & Service in Shelby, North Carolina, says he can’t think of a better time to become a better leader than while the coronavirus pandemic is shaking up everyone’s world. “There is no owners’ manual or set of guidelines to follow. You are on your own.” But he adds he’s been strengthened with this insight: “As the saying goes, ‘it is not what happens to you; it is how you respond to what happens to you.’ This cements that we have only today. Yesterday is gone, and tomorrow is only a hope,” he advises.

In some ways, he says, these challenging times are making us all better people. “Be kind to others, listen at a higher level and slow your response. Look at 2020 as one of the best opportunities we have to become a better version of who we are. I have made that choice.”

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Doing business during the pandemic has made him realize that some of the changes he made could be for the better moving forward. “With the support of new technology, we really do not require face-to-face interaction. All we need is a car and keys from the customer if they want to limit interaction,” he says. “Most still like the face to face, but we are prepared for zero face to face should our ‘world’ continue to require distancing.”

There have been also some notable silver linings, Monroe says. “Since we have been able to maintain store hours and our team 100% (we actually added a technician) during these slower times, we have been able to accelerate a scheduled renovation. Not only did we complete the renovation, but we did it all ‘in-house’ which saved an estimated $15,000! “The renovation was related to improved efficiency through organization, look and feel, as well as improving airflow for a more comfortable environment for our technicians. We have some very talented individuals who demonstrated a host of skill sets I would have probably never discovered otherwise.”

The underlying factors that remain at the core of operating a successful dealership have been heightened by the pandemic, says Monroe. “Love and appreciate your team every day. Find ways to encourage success both professionally and personally. If your ‘internal customer’ is happy, then you can bet your ‘external customer’ is being taken care of. This mindset becomes much easier with goals and a plan to achieve those goals. In fact, without direction and purpose, it becomes one of the most frustrating things in life for a business owner….ask me how I know!”

Craig-Tate-Dealer

Craig Tate, owner of Tate Boys Tire & Service with seven locations in Oklahoma, says that doing business during the pandemic made him realize how fragile business can be.

“Overnight, we lost 50% of our business and when that happens, you really have to go back to what made you successful,” Tate stresses. “Every customer experience counts and every sale counts. We also had to really focus on what was important at the time that COVID-19 became a pandemic and that was keeping our customers, teammates, communities and vendors safe.”

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The pandemic also forced some immediate changes to the dealership’s merchandising strategy. With the number of customers who were worried about how long this pandemic was going to affect their paychecks, Tate explains that they had to re-evaluate their customer offerings to make sure they had the tire that fit their budget. “Customers became very price conscience (for very good reason), and we had to make sure that we had the tire that best matched their budget.”

Some “silver linings” resulted from having to pivot in the way Tate Boys does business during the pandemic, one of which was the refocusing on customers’ and teammates’ needs, says Tate. “We consider ourselves one of the best when it comes to those two things, but this pandemic really brought to light that there were some gaps. It also gave us a new appreciation for every customer at the stores.”

Tate reiterates that when you lose 50% of your business overnight, you really appreciate the re-building process. “We were lucky in that our store performance was affected for only 17 days. Q2 of 2020 was a record quarter for us and that doesn’t happen by accident. That happens because of the dedication and hard work at the stores.”

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And, that work begins with an appreciation for your customers—and never taking them for granted. “Due to the increase in competition in today’s market, the customer has many options of where they are going to do business. Every customer deserves the best experience, and we have to work hard to gain their business and trust. The little things add up and we must constantly evaluate the customer journey.”

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