Tireless. Kim Lorenz

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      We see today that everyone, to some degree, operates in the paradigm they know and understand. If you can introduce a new knowledge base that changes this perception—granted, you are dealing with a reasonable individual or company owner—an opportunity emerges. Put another way, if you can show a company owner or manager a better way to do what they want done, the customer can save money, increasing your sales and customer base.

      Many large companies have staff operating in an old paradigm, as change might negatively affect their job stability, such as in IT departments. They are reluctant to support a change. Change is often not easy for most people, and unless you can clearly present a better way to do what needs to be done, it tends to be a very slow process.

      As mentioned with Boeing and elaborated on later in this book, they spent $500,000 a year on tires for their fleet of vehicles (not airplane tires). In addition to that expense, they had a warehouse and several staff members managing it. They also had drivers delivering the tires from their warehouse to the various plants around the Seattle area. This is how they “always did it.” Boeing really did not need a warehouse. Our company had a warehouse full of tires already. We could supply them as needed, and we could just as easily deliver to their various locations at about the same cost as delivering to their warehouse. So, by eliminating their warehouse and all the related rent and labor expenses, they could save $600,000 in additional costs annually!

      Understanding this, in order for our new venture to succeed, we would need well-trained service people and sales professionals who were not afraid to do things differently, having the ability to consult, educate, and be a true partner to a customer, not just a salesperson.

      As you may or may not be aware, salespeople generally do not garner a lot of respect, and for good reasons. I remember a paper I read when first starting in this industry that stated 95% of salespeople do not know their product well enough to defend or properly respond to a complaint or criticism. The paper also went on to say that it takes an average of five to seven calls to win over a new customer, and the average salesperson makes an average of two calls or less on a lead for a new account. There were several other less-than-flattering statistics in that paper on why salespeople fail. Statistics like those contribute to the less-than-stellar reputation salespeople have earned. Of course, there are great salespeople in every industry, but they are the exception. When a company finds a good one, they do everything they can to keep them.

      In our situation, our service people—the truck drivers—were the most critical part of the vision. When properly trained on the management of the customer’s fleet, that person could be an extension of the customer’s company and act as an employee of that customer. Besides, who does the customer see more often anyway, the salesperson or the service person?

      Companies with these larger fleets had hired their own tire people for many years, dating back to a time when tires did not last long, failed often, had dangerous, multiple-piece tube-type rims, and required almost full-time work to keep the fleet rolling. At the time our new business was starting, fleets had the option to change to tubeless rims, just like regular cars. They could also run radial tires that would last twice as long and rarely failed.

      Most tire failures are a result of flat tires, and radials reduce the number of flats by 90%! If they were wise enough to understand and make the switch, the fleets could outsource the tire work to a vendor such as our company, who could do all the work for them in a fraction of the time, saving the customer thousands every year. The opportunity here was that most of these customers did not realize this huge step in tire technology and the resulting opportunity to decrease costs. It turns out that the competition did not see this opportunity either. They wanted to keep selling what they were selling and were resistant to change. Unfortunately for them (and fortunately for us), this meant that they were missing out on an opportunity the customer didn’t recognize they needed yet.

      Customer by customer, big and small, we started gaining market share. The ball was in our court, and the shot was wide open. But we still needed to execute and make the shot.

      The same education and training were needed for the sales team as the company expanded. Much like our competitors’ way of thinking, most salespeople in the industry were also neglecting to see what the customer actually needed. They were simply trying to sell the customer what they currently had, and price was their only sales tool. The customers also were primarily buying on price because that was all they knew! If we could show the customer a better way to reduce all the costs, not just the price paid, we represented far greater value to that customer, but it required change and a different way to look at the opportunity.

      We had come up with a different plan in order to succeed. Though it might seem like a foolish decision, we actually found it best to hire salespeople from outside the industry—the less experience in both sales and tires, the better! I know you might be questioning this strategy but think about this: it is easier to teach a brand-new habit and knowledge base than to change the old. You know the saying, “You can’t teach an old dog new tricks.” Same example here.

      We endeavored to apply the same wisdom to hiring service people. Most of our hires had no experience changing and handling large commercial tires, driving a large service vehicle, or making service calls on customers. It was a slow process to do this training correctly, but it paid off. The company was growing, and more importantly, garnering an exceptional reputation while gaining market share. This caught the attention of some international firms, and the results almost crushed our little enterprise.

      We had started with zero market share. Now, after two full years, we had maybe 5% market share. We were competing with big companies like Goodyear, as well as large independent operators—some who had been in business for a few generations.

      Though I had experience in my earlier job with many of the world’s largest transportation companies such as UPS—who was operating many thousands of trucks—and other large commercial operators, our new company was too small to properly service these larger companies in the beginning. A commercial tire operation had to have 24-hour service, which meant they were able to respond quickly at any time in order to keep the customer moving or repair vehicles on the road, handling truck breakdowns or tire failures. The good news was that we kept in good standing with our contacts at these larger companies. I knew they greatly respected both John and me after having built relationships with us over the years. Someday, we knew our company could grow large enough to be able to handle these customers and markets.

      One morning, everything changed for us. The world surrounding our new venture was turned upside down. We had been served a U.S. Federal Court summons. A large international corporation, called Bandag, was suing us for patent infringements and was asking for an immediate injunction to shut down our operations. We were still a small, fledgling operation at the time. We had maybe 40 employees, but the competition was starting to see us as a threat. Bandag was a large Fortune 500 firm, while we were a very small company.

      Immediately, our energy and focus shifted to surviving this lawsuit and impending manufacturing shutdown. As you may recall, we started this company with the purchase of a retread manufacturing facility in a bankruptcy auction. We had bid on the equipment, bought said equipment, and shipped it all to Seattle to set up our first manufacturing facility. The equipment had been manufactured by the world’s largest retread rubber and equipment supplier, Bandag, from Muscatine, Iowa. Our new venture was not a Bandag franchise, however. We did not use any Bandag rubber, and we had not once said that we were a Bandag dealer. We had no idea how things had escalated to the point of a lawsuit.

      Bandag was not only asking for an immediate injunction to shut down our operation, but there was also a monetary component that would follow. If this lawsuit were won, we would lose everything we had put into the company thus far. Our success would be ripped right out from underneath us. We only had a short time before we had to appear in front of a federal judge who could shut us down in a matter of minutes, СКАЧАТЬ