CLEVELAND-Most kids generally hate it. But Paul Keinonen knows the real value of doing ``homework.''
He did his, and walked away with a major contract for Ziegler Tire & Supply Co. Inc. to retread bus tires for the Cleveland Public School System.
Along the way he learned that persistence with a capital ``P'' pays off, even though his company's product cost $20 per unit more than its competitor's.
Rather than do the old hard sell, Mr. Keinonen, a commercial sales rep, came to the school district with a proposal: Test Ziegler's retreads for a couple of years and see if they don't perform better than your current ``Brand X.''
That approach-backed by overwhelming data-is what really impressed Irv Sobul, assistant director of transportation/maintenance for the Cleveland schools.
Over the course of 2.5 years, Ziegler Tire provided its Bandag retreads for four vehicles to illustrate that although the school district was, at the time, paying less per tire, it really was losing money by purchasing on price alone.
True, the Bandags initially cost more-$73 per tire, or $20 more than a recap from the lowest bidder and $10 more than the second-lowest bid. But Mr. Keinonen set out to prove that, over the long haul, they would improve traction, mileage and wear rate-and prove to be more cost effective.
In July 1994, he put retreads with two different Bandag tread designs on the buses' rear positions (state law specifies that), placed hubodometers on all district buses, then visited every six months to check his tires against the competition's. He plotted the comparisons on a graph, and even provided charts and photos.
The test, according to Mr. Sobul, showed the Bandags got almost double the mileage of the tires the district was using.
``The increased mileage and driver response to (Ziegler's) tires, and not having to replace tires nearly as often, justified the higher cost,'' he said.
That's crucial for the district, which has been awash in red ink for years and recently was taken over by the state's Board of Education. ``We don't have any money,'' Mr. Sobul admitted.
Armed with the documentation, he went to the Cleveland School Board, expecting to have to walk on water. The decision to go with Ziegler was surprisingly easy-practically a no-brainer.
``We're trying to save money over the long term,'' he told TIRE BUSINESS. Ziegler ``didn't push the issue. They wanted to do the test.'' Had Mr. Keinonen ``come in every three months pushing for a sale, it wouldn't have worked.''
Ziegler's competitor, hawking another well-known retread, wasn't too happy, though, and wrote letters of protest to the school board. In the end, money-saving it, that is-talked.
Ziegler landed a contract to equip some 600 buses, or 2,400 wheel positions, for the 1995-'96 school year, with renewal possible. Mr. Sobul said he's looking for tires that will hold up under adverse conditions: a lot of turning and stop-and-go driving on city streets with potholes and road salt. ``We need tires that won't slide around.''
Mr. Keinonen provided some test results that clinched the deal:
After 45,506 miles, one Bandag retread still had 11.5/32 inch of tread remaining-and 78.6 percent more miles to wear out-compared to 40,255 miles and 3/32nds on the competitor's product;
A sculptured mold retread the district had been using for only a short time had a projected average tread life of only 29,806 miles. Based on the cost per mile of a Bandag retread, Ziegler calculated the fair value of the sculptured tread at $29.42-far less than the $52.95 the schools actually were were paying; and
Based on Ziegler's data, the average Bandag retread mileage was 83,061 compared with the competing retread's average of 49,585 miles.
The biggest problems with the hot caps the district was using, Mr. Keinonen said, was extreme wear, poor traction and casings ruined by bad buffing jobs. Mechanics complained they were tired of changing tires almost three times a year per bus.
``We expect to cut our usage in half by the time we go through a complete turnover'' in tires, Mr. Sobul said.
The school district, which has also begun a three-year test with Ziegler of new Michelin, Firestone and Continental tires on nine buses, is looking to reduce its tire expenditures, including mounting and service, by $150,000 within 1.5 years, said Mr. Keinonen.
Having previously worked for more than 22 years with Leaseway Transportation Corp., Mr. Sobul was quite familiar with retreads. ``I'll look at the facts and test over a reasonable period of time.'' he said. ``But I don't like to be hammered for a sale.''
Back to that persistence.
Mr. Keinonen said that because of the size of the Cleveland school district and the layers of bureaucracy, it took him more than a year to reach the right people to even discuss a test of Ziegler Tire's products.
In the short term, it meant the district had to increase its tire budget, but would realize a payback within two to three years. ``In government sales, the biggest thing is you have to prove your point-the cost savings-and document everything,'' Mr. Keinonen said, ``because historically, they always accept the lowest bid.''
``It's refreshing to see them take a practical business stance. But you still have to do your homework,'' he added.
Ziegler Tire, founded in 1919 and based in Canton, Ohio, does business with some 50 to 60 school boards statewide, and provides retreads for a number of cities, counties, municipalities and highway departments. Its retread plant in Garfield Heights, a Cleveland suburb, turns out 66 tires daily, but soon will step up production to 77. The firm operates nine service trucks out of that location, one of 16 statewide.
Mr. Keinonen said he's seen a lot more interest in retreading as the price spread between new truck tires and retreads widens. And ``having the Cleveland board gives us an opportunity to solicit other government agencies that have been anti-retread.''
While Ziegler's competitor was selling the Cleveland schools strictly on price, Mr. Keinonen said, ``Anytime you do that, it will kill you. You'll eventually lose the customer. Although it's a price-driven market, sometimes it's better to sell on value.
``Value and service build trust that keeps the customer over the long road.''