Think of it as a Burger King...with tires instead of burgers and fries.
On Ayers Tire & Service L.L.C.'s menu is a sampling of four stores, a tire warehouse, another four stores under construction, one site almost bought and an aggressive growth campaign designed to push the Daytona Beach-based dealership into the Florida tire retailing fray. It's much like what fast-food giant Burger King Corp.'s marketing strategy against McDonald's Corp. accomplished.
Burger King's massive growth came when it started building restaurants near existing McDonald's locations. The idea was that fast-food customers were already coming there, based on the studies and tests McDonald's already had done.
In a similar way, Ayers Tire is looking for sites that already have massive visibility and passing traffic. The sites don't necessarily have to be former tire stores. They just need high traffic counts in locations that can generate $1.5 million in revenue by the second year, said Ayers Tire CEO and President Steve Ayers.
``Anything that projects less than that we're staying away from right now, so we're paying probably more for land than most tire dealers are paying for (the) building, land and site,'' he told Tire Business.
Of course to execute the aggressive plan, it helps to have lots of cash on hand.
Mr. Ayers ran company-owned stores for Goodyear after college, following in the footsteps of his father, who had retired as a Goodyear accountant after 33 years. Mr. Ayers then got an MBA in accounting and struck out on his own business ventures.
By the time he began Ayers Tire, his first tire business, Mr. Ayers had met Sandy Miller-former chairman and CEO of Budget Rent-A-Car-through mutual friends. The two bought a former Goodyear dealership in Ormond Beach, Fla. Mr. Miller had sold the rental car company shortly before and was looking to be a partner in a fledgling business, Mr. Ayers said. Personal investments from the two partners are funding the Goodyear dealership's strategy.
But Mr. Ayers said the quick success of the first stores helped as well. The first two stores helped fund the start-up of the second two stores, and the dealership's goal is to net 20-25 percent of revenue from those outlets, he said. When its five stores are up and running, Mr. Ayers projects they will generate revenues of $6 million a year. He hopes to expand the dealership by five to seven stores a year thereafter. When the dealership hits the 50-store mark, he'll look into going public.
As the dealership grows, it likely also will add other brands to the Goodyear, Cooper and Maxxis tires it now handles. Mr. Ayers said he already is in talks with Bridgestone/Firestone to offer one-stop shopping as the dealership grows.
``I would like to grow the business to a point that we're the superior provider of one-stop auto in Florida,'' he said.
The linchpin of that growth is site selection. Referring to them as ``McDonald's-type corners,'' Mr. Ayers said he is looking for areas that have a traffic count of at least 100,000 vehicles per day instead of growing ones that have counts more in the neighborhood of 20,000. He estimated that buying the better site probably costs about $250,000 to $300,000 more, but the greater acquisition costs are offset by lower advertising outlays.
``So the lost revenue, the employees you're going to go through during that period of time from a frustration standpoint, everything it takes to get into these home-run sites and grow them, why not do like McDonald's?'' he asked rhetorically. ``Why not buy the site and the first year out project positive cash flow and nice earnings?''
Still, Mr. Ayers isn't banking on just prominent locations to fuel his impressive profit goals. For an edge in the fiercely competitive Florida tire market, he's looking to customer service to break Ayers Tire out of the pack that includes well-funded and fast-growing enterprises like Tire Kingdom Inc. Ayers Tire's customer service model is built on yet another successful chain outside the tire industry-Ritz-Carlton Hotel Co.
``If you're not taking care of the customer, I don't care how well you do a brake job, you're just not going to be successful,'' Mr. Ayers said.
Customer service's virtues are in the details. He said Ayers Tire's 38 employees-including tire technicians-are trained in-house to make sure they call customers back, offer to pick up the vehicle and practice good phone etiquette.
``People seem to want to pay for the service,'' he said.
Mr. Ayers said he constantly is seeking customer-friendly people, especially restaurant servers or others outside the industry who seem to be friendly, genuine and able to connect with people.
``We can teach them the automotive business, we can teach the tire business,'' he said. ``But they have to have a desire to want to serve people.''
Ayers Tire's ratio of customer service vs. technical training is actually 2-to-1, Mr. Ayers said. He also focuses more of his recruiting on customer-service employees, figuring that good technicians will come on their own as the shop benefits from excellent customer service.
``Techs are attracted like bees on honey to a busy shop,'' he said.
He admitted that as a dealership grows, keeping up on those standards can deteriorate as more employees are added and the owners aren't watching over their shoulders. To combat that, Ayers Tire set up an employer-funded deferred compensation fund to act basically as a pension fund. While employees don't own a percentage of the company, it gives them more incentive to see the dealership prosper, Mr. Ayers said.
``The cost to do that and to keep a good person is a lot less than to continue to hire and train,'' he said. ``The customers have to endure this every time you do it.''