COVID spurs profitable changes at Kenwood Tire

BRIDGEWATER, Mass. — Few people can say the recent pandemic was a positive event, yet Spencer Carruthers said the experience compelled him to make major changes to his tire dealership, and now he's less stressed, his employees are happier — and the shop is profitable.

Prior to the start of the pandemic in 2020, Carruthers, 56, said he was "ready to pack it in" with the single-location tire dealership, Kenwood Tire Co. in Bridgewater, that he bought from his father-in-law 30 years ago.

At the time, he had six employees plus himself, working 48 hours/six days a week on undercar services, tire maintenance and other vehicle repairs. Yet the business seemed stagnant and stressful, he said.

"I was ready to pack it in with this business two years ago before COVID because it felt like I was pedaling and getting nowhere. I would never have made these moves if it wasn't for a major event like (the pandemic)," he said.

Those moves included reducing the number of employees to three, through attrition; reducing operating hours to 40 hours/five days a week; and cutting back on the services offered.

"Since we've concentrated on tires, alignments, brakes, batteries and oil changes, those are the five things we do, I don't have to have an A-tech anymore. I don't have to have any specialized equipment, and it just made us a lot better at what we do. ...

"It really changed my whole perspective with the employees. I just realized the labor pool was bad before COVID hit. It's gotten even worse for us, especially in this area.

"We focused on keeping the employees, and now we give them 100% health insurance. We work 40 hours a week. We take three weeks vacation and all this kind of stuff. And believe it or not, we're still profitable.

'It's just a different approach to things, because you can only do so much with what you have," he said.

Carruthers said he moved from the back office to running the service counter, which works for him because he has a small shop in a small town.

"The owner being at the counter, I think, is the key. Nothing's lost in communication. I feel like you get a better buck for what you do, too. We've taken off.

"It's been three years that I've been on the counter, and I still like people. ... I still find people interesting, so I'm happy to listen to their stories. And now we're more productive than we ever were."

With the added benefits and reduced hours, the employees are happier.

"Letting them go for a full weekend, the quality of the work really went up. Their efficiency went way up, and they are happy to come to work. It made all the difference cutting out Saturdays for us. Customers, they can deal with it. It's fine," he said, adding that happy employees in turn make happy customers.

"It passed off to the customers, too, because they have a much better experience when the employees are happy," he said.

Carruthers took over the dealership in 1992 from his father-in-law Kenneth Wood, who bought the West Bridgewater Public Library building for $1 in 1962. It was a former schoolhouse built in the 1870s, which was slated for demolition. He moved the building about a half-mile down the street and established Kenwood Tire.

Since reducing the number of vehicle services the dealership offers, Carruthers said he refers such things as "check engine," fluid leaks and other diagnostic services to other shops in the area.

"In return, it's really increased our alignment business because they refer a lot of people here, too. So it's kind of a good thing in the end," he said, noting the dealership generated $1.3 million in sales last year.

He said he suspended vehicle repairs because the technology has become so advanced.

"It scares the hell out of me. The tools are so expensive and the technicians are so expensive, and they are just hard to find, too. So that was part of the reason why I just didn't want to do it. You can't do it if you can't do it properly."

The shop has remained profitable despite its limited menu of services, he said.

"Our tire sales just jumped through the roof because that's what we concentrate on. We've always had a decent inventory here. I'm pretty knowledgeable over 30 years, become knowledgeable about tires. And you build up a lot of relationships with people. We just never capitalized on those opportunities before, such as small fleets, because we were just bogged down with trying to fix cars and intake manifold leaks and all that kind of crap.

"Now it's focused. I know how long it takes to do jobs. I know it takes an hour to do an alignment, an hour for tires. So it's easier to schedule. It's easier to be more efficient when you know how long stuff takes. For a fluid leak, it could be 20 minutes or it could be three hours, you just don't know. That's the stressful part of it for me," Carruthers said.

Kenwood Tire spends very little on advertising — about $13,000 last year.

"We don't need to. Word of mouth, once you get that ball rolling and keep taking care of people, they tell their friends. That's just going to keep propagating itself," he said.

Kenwood Tire used to cater to high-performance vehicle owners but now services a wide spectrum of customers and vehicles.

"I always thought those (high-end customers) were the ones to get because the tires were the most expensive, but not necessarily. The older you get, you realize that the person you just gave free air to may tell his family you did that, and the next minute the son comes in and buys four tires from you.

"You just don't know the connections people have with each other outside of here," Carruthers said.

Kenwood Tire sells tires that fit a range of vehicles from trailers to light trucks. In addition to carrying several major tire brands, such as Michelin and Continental, he stocks an inexpensive private label tire.

He said he believes customers have become more brand conscious and research their tire choices before they buy.

"I don't try to sell people out of what they've made their mind up on. … I feel like I'm just the middle guy doing the service, making sure those tires ride beautifully when they leave. That's what we take pride in," he said.

While Carruthers may avoid the complexity of vehicle technology, he has embraced point-of-sale technology, which has improved efficiency.

He said he wrote almost 4,000 invoices last year, and every week about 85 repair orders are generated electronically (via the dealership's website or texting.)

The dealership's website allows customers to search and order tires and services, schedule appointments and pay electronically.

"Very rarely do I pick up the phone anymore. I'm bucking all the trends," he said.

The online transactions were prompted by the contactless protocols of the pandemic, when customers may have needed to drop off or pick up their cars at the dealership after hours or on weekends and pay their bills online.

"It just got a little easier to send them a link to pay rather than take the credit cards over the phone. It can get lost in translation there, too. It's really taken off. It goes straight through our point-of-sale system," Carruthers said.

"My goal, especially in 2022, was to push people more online. If I don't pick up the phone, they can make an appointment by texting or the website."

A service appointment made online will appear on his POS system where he can approve the time and automatically make the appointment.

"Efficiency is going to be the focus for this year. Pushing more people online to make appointments, … so I don't have to pick up the phone is my goal," he said.

Carruthers feels an obligation to give back to the industry he's worked in for 30-plus years.

He is a past president of the New England Tire & Service Association and has been active in other dealer groups.

Carruthers said he thinks it would be hard today to start a dealership, compared with 30 years ago. There seems to be fewer active trade associations and dealer meetings where owners can meet and learn from other owners and share ideas.

"Now you're really relying on your online feed to keep up on stuff," he said.

One piece of advice he offers to other tire dealers: "If you can just give somebody good honest service, that's where it's at," Carruthers said. "They can't buy that online. For a small (dealer) like me or any of the small (dealers), that's the advantage they have. As more consolidation happens, it makes us more valuable.

"The price isn't as important anymore because you just want to do business with that person. In this area, I found people are a lot less price sensitive. The business has become better because of that."

Other advice he offers tire dealers, especially those just starting in the business, includes:

• "I have one KPI (key performance indicator) that I've been using for 25 years: My payroll should be no more than 50% of my gross profit.

"... There's a lot of KPIs out there and there's a lot of numbers to track. But when you don't have a lot oftime for that, that's the one number I go by."

• "Own the real estate, if you can."

• "Open all lines of communication. People message me on Google, Facebook, WhatsApp, anywhere and it's a lot of input. It's not all through the telephone anymore. I think the telephone, like picking up the phone and talking to somebody and making a sale, is probably the least efficient way of spending your time. If you have a good website, that's what people want. They just want you to have a good website."

• "Get the reviews. Google reviews are priceless. … That's what people are looking at and they'll find you through that way."

He said one of the biggest challenges for a small dealership is "keeping the expenses down, obviously, but not watering down the service. And sticking to your guns, sticking to what you do and do it well every time.

"Once you do that, the employees buy into this and they know they're really good at this, and it allows us to make money, which is great, and put it back into the business," he said.

He added that buying health insurance for his employees was one of the greatest incentives he's ever offered.

While he has several years before considering retirement, Carruthers said he doesn't have a succession plan or a prospective buyer for his business.

"Maybe somebody will come along and I can sail off into the sunset at some point," he mused.

There is a dwindling number of small dealerships in his market due to acquisitions by large chains.

For years Carruthers belonged to a Facebook group of 10 local independent business owners that since has shrunk to three due to acquisitions.

Carruthers said if he decided now to sell to another dealership, he'd want to continue working in the business until he was 65 — but then he'd probably have to work Saturdays again.

"I may just as well keep doing what we're doing. … If things were terrible right now, I would totally be thinking of that option, but I think the longer I stick around, the more valuable I become, too," he said.

"This business has been great to me and my family. I wouldn't change it for anything."