ANCHORAGE, Alaska (Aug. 18, 2003) — ``Every tire dealer in America should visit Johnson´s Tire Service,´´ according to Del-Nat Tire Corp. President Dan Hunter.
It would be quite a trek for most as the six-outlet independent dealership is located in Anchorage. But it could be worth the trip as Johnson´s Tire, which claims to have the largest market share in the state, is hailed as a prime example of how a focus on high-quality customer service and appearance can create a successful business.
``It´s the most unique tire dealership I´ve seen,´´ said Dennis Gaede, president of Nokian Tyres Inc. ``There is a passion that runs through that dealership.´´
There is no magic formula. ``People do appreciate our people going the extra mile for them,´´ said Jim Johnson, who, with his wife Janet, founded the dealership in 1982. He has heard customers call his dealership ``the Nordstrom of the tire business.´´
Originally from New Jersey, Mr. Johnson relocated to Alaska by way of Hawaii. He operated a Johnson´s Tire Service (JTS) in New Jersey in the 1970s but decided in 1978 to move to the Aloha state. After various jobs in the tire business there, he decided he wanted his own business. An unsuccessful attempt to obtain a dealership led someone to suggest he look up north in Alaska, where the population was growing, but, due to little business competition, there was also a lack of good customer service.
So, with some trepidation, Mr. Johnson opened a store in Anchorage with the contingency that if things didn´t work out after six months, he would return to the sunnier climes of Hawaii. Twenty-one years later he operates six outlets in the country´s northernmost state with a total of 100 service bays, a quick-lube operation and a wholesale business-with plans to continue expanding.
His stores-three in Anchorage and one each in Eagle River, Soldotna and Wasilla-are larger than average, with his Anchorage supercenter aptly named: It has 26 service bays and a drive-thru car wash.
All the stores include longer service bays to accommodate RVs, and they all offer one-stop service featuring the dealership´s JTS Pro-Lube Express operations to provide tire mounting, alignment, brake service, shocks, lubrication and other general repairs. In addition, Mr. Johnson operates a warehouse that supplies passenger and light truck tires to rental companies, commercial accounts and car dealerships.
Another viable business venture is Internet sales of tires to outlying small communities that often have no tire stores.
One element of the business he can´t control is the climate. ``Our business is controlled by the weather, among other things,´´ he told Tire Business. Snow usually begins falling in October, so the dealership is busiest from mid-September to mid-November mounting winter tires and studs and getting vehicles ready for winter.
Then in April and May the stores are busy again changing out the winter tires on vehicles. The stores often service vehicles of tourists from other states, and Mr. Johnson said they have returned customer comment cards asking if he could open stores in their towns.
While he doesn´t have any lofty plans of expanding into the Lower 48, he is looking to open stores in new markets outside Anchorage. Within the next 18 months he hopes to start building outlets with a minimum 20 service bays.
At age 59, Mr. Johnson doesn´t have any plans to retire. ``You can´t sit back and say, `We made it.´ You have to try to stay on top of things every day,´´ he said.
From the start, Mr. Johnson said, he was dedicated to service-clean and attractive facilities, well-dressed and knowledgeable employees and attention to customers´ requests and complaints. He knew he was on the right track when one of his early customers told him, ``Your service is so unusual for Alaska.´´
Aside from the unique climate, JTS faces the same challenges as dealers in other states, including two Sam´s Club outlets and two Costco stores in Anchorage, a city of about 300,000. But unlike many dealerships, JTS mainly sells private label tires, along with Mastercraft and Nokian. ``It´s unusual because other tire dealerships think they can´t do that,´´ noted Del-Nat´s Mr. Hunter. JTS is a stockholder in the tire marketing co-op group.
Mr. Johnson said he carries smaller brand names because he was dissatisfied with his experiences with major tire brands in the past. ``I´ve had more problems with (manufacturers) than with any customer,´´ he said. Consequently, there are no manufacturer signs in his store. ``We don´t need other brands to make us,´´ he stated. ``Customers are interested in what we can do for them, not what a manufacturer is going to do for them.´´
Mr. Johnson declined to disclose his revenues, 80 percent of which are generated by tire sales. But he said they have increased over the last couple of years, and he is making a profit.
``I believe I can go in about any market and set up shop and operate the same.´´ The common ingredient in all markets across the country is ``the customer wants to be appreciated and wants service,´´ he said.
The key to his success, he said, is keeping a positive attitude. The dealership´s ``We care´´ slogan is extended to caring about the customer-what they think of the dealership and what they buy, he said.
The stores hang customer evaluation cards on the mirrors of the vehicles they service to track customer satisfaction. About 50 percent of the cards are returned, and Mr. Johnson said he reads every one of them. Most are positive feedback, but if there is any indication of a problem or dissatisfaction, he calls the customer. ``Ninety-eight percent of the time we are able to resolve the problem,´´ he said.
And he said customers write just about anything, including whether an employee had dandruff or was chewing gum because they know the dealership will listen. Regarding the chewing gum complaint: Mr. Johnson called the customer to find out which employee was breaking the store rule and then discussed the matter with the employee so it wouldn´t happen again. ``It´s the little things that really count,´´ he noted.
``You got to stay on top of this. You got to pretend you just got started....You can´t take (customers) for granted,´´ he said. ``Our strong point is we can deliver service and quality the customer wants.´´
Customers expect the facility to be clean on the inside and attractive from the outside, he said. They expect the employees to look presentable. Customers expect to be greeted with a positive attitude. Whatever they see, they should see that people care about the business, he added.
``Anybody can offer tires and offer them at a lower price. That´s the easy part,´´ Mr. Johnson said. ``The difficult part is to offer the service people want.
``Whatever the competition does, we try to go one step further. We try to spoil the customer.´´
But it involves more than just having a policy of spoiling the customer-the employees have to buy into the ``We care´´ program, he admitted. He makes sure the employees feel appreciated, too, by posting customers´ comments and inviting their recommendations and opinions on the business. He also makes an effort to move starting level employees ``up the ladder´´ in the company. About 80 percent of JTS mechanics and 95 percent of the salespeople, managers and supervisors moved up from the tire-mounting department, he said. He offers extensive training and tries to make his people successful.
``We try to make something of these men and women....There´s always a place to grow here.´´
When he started his business in 1982 with a handful of employees, Mr. Johnson told them he didn´t want to hear a customer say he didn´t buy from JTS because the service was better elsewhere. ``If it´s because of lower prices, I can deal with that,´´ he said.
While he tries to stay competitive on pricing, he said he needs to maintain his margins. So when a customer comes in with lower-priced tires from a warehouse club, he refuses to install them. He doesn´t even charge extra for the service like some dealerships. ``We don´t install new tires that are not purchased here,´´ he stated, reciting signs posted in the stores.
But rather than sharply turn away the customer, his salespeople explain that when combining JTS products and services, the prices are comparable. ``The customers are not happy about our policy, but we need to turn it around.´´ Mr. Johnson said that more than half the time, the salespeople are able to turn the situation into a tire sale, and the customer returns the tires bought elsewhere.