This was another banner year for independent dealers. Most dealerships experienced strong tire demand and very strong service sales against a strong 2022.
This trend has been fueled by several factors, including increased prices for tires and service; increased prices for new and used vehicles, which is keeping customers in their vehicles longer; and a return to a more normal miles driven since the pandemic.
The demand side has been robust. The supply side — in regard to parts, tires and qualified labor — continues to be a pain point. The parts and tires situation is better than it was during the pandemic but has not been completely solved.
Qualified labor — in the form of technicians and skilled advisors — continues to be the biggest threat to tire dealership profitability.
What to do about it is the big question.
Tire dealerships today need to present themselves as a professional and exceptional option. When your pricing is premium, your service needs to reflect that.
While your dealership does not need to look like a five-star hotel, it does need to be clean, tidy and painted every few years, especially the outside. Any landscaping needs to be kept up with and any displays like banners or lawn signs need refreshing, as well.
This not only helps convince customers that this is a destination of choice, but it also helps convince potential employees that this is a shop they would want to come to every day.
But it doesn’t stop there. A clean, well-lit shop with no clutter is only the beginning.
To attract the best, you have to lead the best. Lead, coach and motivate employees likes it’s 2024, not 1994. That means staying positive and solving problems with employees — not finding fault first. Hold employees to high standards. Those who don’t make the cut shouldn’t work there. Hire the right attitude and use your record profits to train employees properly.
Looking forward to 2024, I see a lot of mixed signals. I don’t own a crystal ball, but I know the data and the history of this business and can apply it in a logical manner.
Traditionally, national general election years are not great years for the tire industry.
In election years, consumers typically pull back on non-budgeted spending. Why? I’m not really sure, other than it’s been a very solid pattern. (Maybe negative political ads worry customers?)
In light of this, I urge you to be realistic regarding budgets and setting bonus plans. Make sure that everyone in your shop knows that adjustments to bonuses are subject to change.
Also now is the time to set yearly reviews. They don’t all need to be done in a day or week. Feel free to space reviews out, but they should be completed by January, if you are a single shop, and by February if you have a multi-store operation.
Remember, employee reviews should not be a surprise. Your employees should know exactly what you will say because you’ve been saying it all year. If you dropped the ball, that’s OK. The review simply turns into a goal-setting session.
If you haven’t already separated reviews from pay increases, this is the year to do so. If an employee review ends on whether or not that employee gets a pay increase, the employee will be solely focused on the end of the conversation and will retain little from the beginning and middle parts of the conversation.
Pay increase discussions work best on employee anniversaries. This spreads it out over the whole year, plus you don’t have the “Did you get a raise?” gossip among employees. It also improves communication.
Barring a complete meltdown of the economy, this should be a solid year for our industry. You may not break another record in 2024, but your business should be on solid footing.
We will likely start off the year with some solid snowfall and cold temperatures in several regions, according to meteorologists, so that should get many dealerships started early with tire and battery sales, among other items. In addition, analysts continue to show global tire demand will increase through 2030. The U.S. and Canada markets should be no different.
Congratulations on serving your community another year and providing paychecks to help support the local economy. Sometimes this is a thankless business. The good days are great, but sometimes the bad days can really get to you. Shake it off and prepare for a successful new year.
