Independent tire dealers can glean some valuable insight from the demise of Montgomery Ward & Co.
That venerable company, which is being liquidated, offered low prices and quality merchandise. It had locations across the country and advertised every Sunday in local newspapers.
It employed knowledgeable and experienced salespeople.
Yet Wards still couldn't survive in a competitive retail market against the likes of Sears, Roebuck and Co., Wal-Mart Inc. and other large discounters.
There are probably lots of reasons why Wards failed, but for tire dealers a couple of them are worth mentioning.
The first is that offering low prices isn't necessarily the formula for success. Wards had very competitive pricing both in its stores and in its auto service outlets. Its newspaper ads screamed low prices each week.
Yet despite these efforts, too few buyers frequented Wards stores, prompting General Electric, its parent company, to pull the plug.
Offering low prices, and in many cases the lowest price, did not keep Wards from bankruptcy. That's a lesson tire dealers should take seriously.
Another reason Wards failed is lack of image. Too many people didn't know what Wards stood for and as a result didn't consider shopping there.
With all the options consumers have to-day to shop for clothes, electronics, appliances as well as tires and automotive service, many had no inclination to consider Wards.
For whatever reason, too few people knew that Wards offered lots of great deals. So they shopped elsewhere.
For tire dealers, this provides a second lesson.
Do your customers, current and prospective, truly understand what your dealership has to offer as a provider of tires and automotive service?
Do they know you deliver exceptional customer service, have a do-whatever-it-takes mentality, employ professional and knowledgeable technicians and offer competitive pricing?
To them, does your dealership stand out from the crowd?
The leaders of Wards most likely thought the public knew the company's mission. But many people obviously did not.
Good service, quality products and competitive prices are the ingredients that make for successful businesses. If too few people know that your dealership offers these attributes, chances are it won't prosper.
Using the lessons learned from Wards, dealers should take a hard look at their operations to determine if customers understand their mission.
Consider asking customers how they view your business to see if their perceptions jibe with yours.
If you find they do, that's great. If not, you had better make some changes fast.
Otherwise, your dealership could end up like Montgomery Wards—a once proud business that nobody cares about any more.