The Art of Scaling Integrity in the Tire Business With Seth Sands of Good Turn Tire & Auto

Episode 143

Seth Sands

Good Turn Tire & Auto

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Seth Sands is the co-CEO of Good Turn Tire & Auto, a company with a portfolio of 14 brands and 35 locations across four states, including Florida, North Carolina, Virginia, and Michigan. With an early career in finance, investment banking, and private equity, Seth shifted gears to focus on family- and founder-owned businesses. He and his partner leveraged their financial expertise to fill a gap in the tire and auto space by utilizing technology and customer-centricity to grow Good Turn Tire & Auto into a substantial platform.

In this episode…

The tire and auto repair industry is changing significantly as businesses adapt to new technologies and customer expectations. How can companies in this sector enhance their growth by focusing on technology and customer experience?

According to Seth Sands from Good Turn Tire & Auto, the key to success in the tire and auto repair industry is leveraging technology to provide a superior customer experience while maintaining a strong focus on employees and customers. Seth notes that the industry has traditionally been fragmented and has suffered from a lack of scalable technology solutions, contributing to a negative reputation. By addressing these challenges, his company has expanded from three to 35 locations across four states. Their strategy involves preserving the local brand identity of acquired shops while offering essential support in areas like financial management, marketing, and recruitment, thus enabling these businesses to thrive.

On this episode of Gain Traction, Mike Edge welcomes Seth to discuss the intricacies of the tire and auto repair industry. They explore maintaining local brand identities, managing front and back shop operations, and the importance of customer service. Seth shares his journey from finance to the auto industry, emphasizing empathy and honesty in customer interactions. The conversation also covers market expansion strategies and the importance of succession planning for business owners.

Here’s a glimpse of what you’ll learn:

[1:44] How Seth Sands’ journey took him from finance to the fragmented tire and auto industry
[3:46] The “platform” approach that allows local auto brands to thrive under Good Turn’s umbrella
[5:25] Why preserving local brand names can be key to retaining customer loyalty
[7:40] Good Turn’s strategy for geographic expansion and market density
[9:28] The importance of differentiating the front shop from the back shop to optimize customer experience
[12:07] How a consumerization focus is changing auto shop customer service expectations
[18:15] Insights into employee empowerment and open communication with management
[20:47] Seth discusses his hobbies, including fishing and flying airplanes

Resources mentioned in this episode:

Quotable Moments:

“It’s not price, at the end of the day, that people generally care about; it’s the experience and how they are treated.”
“The hardest thing we can do, or we try to avoid, is to enter a market and get stuck with one or two locations.”
“If there’s some reason I need to understand something technical, we’ve got a lot of people that can dumb it down to a way that I can understand.”
“The only thing you have is your name and your word — make sure you approach business from doing the right thing.”
“Ultimately, it’s going to work out. As long as everyone knows that there’s this, we’re all playing by the same rules of the road.”

Action Steps:

Focus on customer experience in every aspect of your business: It creates loyalty and differentiates your offerings.
Prioritize honesty and integrity in all internal and external dealings: This creates trust and builds a solid reputation.
Optimize the alignment between front-end and back-end operations of your business: Strengthening communication between customer-facing employees and technical staff is essential for seamless service delivery.
Develop a clear succession plan or exit strategy long before it’s needed: Proactive planning prevents haste and helps maximize value.
Embrace technology and innovative practices to stay competitive: Adopting new technologies enhances customer engagement and business efficiency.

Transcript

Announcer:

Welcome to the Gain Traction Podcast, where we feature top automotive entrepreneurs and experts and share their inspiring stories. Now let’s get started with the show.

Mike:

Hello, folks. Welcome to the Gain Traction Podcast. I am Mike Edge, your host. Today’s guest is the co-CEO of Goodturn Tire & Auto with 14 brands. It is Seth Sands. But before we get started, this podcast is brought to you by Tread Partners, the leading digital marketing agency in the tire and auto repair space for multi-location operations that have anywhere from five to hundreds of shops. Why work with Tread Partners? To put it simply because they know the industry and they can make your digital marketing more predictable and profitable.

They save multi-location shops, particularly thousands of dollars because they know how to optimize and maximize your budget. They specialize in business to consumer tires and auto repair services in the digital marketing space. They’re a partner, not a vendor. Why wait? Find out more at treadpartners.com. So folks, you know, I like to mention past guest. I just recently interviewed James O’Reilly, vice president at Trail Tire in Western Canada. They have 63 stores. It’s fun to interview folks up in Canada. We don’t get a lot of those guys and they’ve got a great operation over in Western Canada. If you get a chance, check out that episode. He’s a second generation tire guy and one of the good guys in the industry for sure. So Seth Sands, welcome to the Gain Traction Podcast.

Seth:

Hey Mike, thanks so much for having me. Really excited to be here today.

Mike:

Man. We’re glad to have you. Let’s talk about your background a little bit. I know you’re from south Florida and you live three years in Chicago and you found it extremely cold.

Seth:

Yeah, so I grew up in South Florida and then lived in Tennessee, went to Vanderbilt and after that work took me through quite a few stints, spent some time in Chicago, as you said, froze. Lived in Texas, New York, Philadelphia before coming back home to Miami. My introduction to the tire and auto space is I would say a little bit non-traditional. Began my career in finance. Actually started out in investment banking and then transitioned to private equity where I was focused on family and founder-owned businesses and helping them grow and scale and oftentimes really the first institutional capital that they had had. After doing that for a while, my partner Dave and I kind of realized that there was a large gap in the tire and automotive repair space. It’s an incredibly large and fragmented industry, but more importantly, I think some of the things that we recognized was, number one, historically there really had been a lack of technology enabling scalable growth.

But secondly, I think it’s an industry that really had a, and it has continued to have a bit of a black eye, and our view was if we were able to provide a differentiated customer experience utilizing technology, focusing on the employees, and most importantly, focusing on customers, that we really could build ourselves a nice platform. And so we both left the world of finance and started what was originally called Apex, which was three locations in south Florida, and that was about two and a half years ago. Fast forward to where we stand today, as you said Mike, we’ve got 14 brands, 35 locations and are located across four different states in Florida, North Carolina, Virginia, and Michigan. And we’ve been really proud of what we’ve built, but I think ultimately really comes back to focusing on our customers and taking care of our employees.

Mike:

Well talk about the, you use this word and since we’ve connected, you’ve used it several times, but you talk about the platform, that’s the key word I hear. Explain that platform that you’re bringing to the support base of these brands.

Seth:

Yeah, we view Goodturn as what you said, the platform or a holding company. And really what it is is the back office infrastructure, the support infrastructure to allow local brands to thrive and grow. Something that we were very focused on from the early onset is we believe and continue to believe that there’s extreme value in the local brands.

In some instances, a bigger broader name is definitely valuable, but I think in a lot of the communities where we’ve been successful, the shop that’s been there for 25, 30, 40 years, people have come to know it. And so when we bring new partnerships into our family of brands, what we call it, we oftentimes think it’s really important to keep that name and support these shops. And oftentimes the areas where they’ve struggled, we see a lot of shops with great technicians, but they may not know how to produce financials in a way so that they can figure out where their margins are. They don’t really know how to do marketing in a way that’s effective. They don’t know how to measure it. Handling, recruiting, handling the day-to-day, that continues in our opinion, to increase. That’s what the Goodturn part is. But what we view is this is a very localized business and we continue to operate on the local level with the support for [inaudible 00:05:35] at a centralized location.

Mike:

Man, I got to think that’s very attractive to somebody that, well, you built something up, it’s got to be attractive to you guys too. I mean, the reality is if you’re buying a 40, 50 year old company, why change the name if it’s successful and it’s well known?

Seth:

Yeah, it’s a very common question. One side of the coin is as you become large enough, if you think about whether it’s a Mavis or Tire’s Choice or Mikey’s or Monro’s, right? There’s hundreds to thousands of them. And so there is brand awareness, but also at the other side of the corner, at the local level, people continue and especially I think at this day and age to feel good about shopping local. And so being able to still retain the feel, being able to retain the heritage, the name, it really resonates well, not only with the employees but also with the customers. And so anytime there’s a transition, the ability for us to minimize the variances or the emotions that a customer may have, we just think it’s a win-win. And so we’ve been very successful and continue to operate the local brands, but provide them the support that a lot of times they need or didn’t even know that they needed.

Mike:

Yeah, I think when you change the brand, and I get the business purpose, sometimes. It makes sense for certain groups or whatever, but when you do, it gives that customer that one opportunity to say, “You know, I might go somewhere else just to try.” Or, you know what I mean? It gives them an exit, gives them that little ramp-off spot. If they’ve been coming to Joe’s Tire, whoever it may be for years, and then all of a sudden the name’s going to change, they realize there’s a significant change, then it gives them that opportunity. Kind of like an exit ramp that you really don’t want to give them.

Seth:

Yep. I think that’s right. There’s no perfect solution. We have been in situations where we changed the brand name, it’s been more successful, but there’s also a number in our portfolio that we will never touch. We don’t even want to take the risk. And so I think in general, our view is if it’s not broke, don’t fix it. But recognizing it’s also complications. As you said, we run 14 different marketing programs and that has its challenges with scale.

Mike:

When you guys are looking for opportunities, I mean, are you trying to build where you already are or fill in the gaps or you interested in brand new wide open markets? I mean, do you guys intend to do any greenfields at all?

Seth:

Yeah, great questions. Our geographic focus right now is the southeast and the Midwest. Once we find a market, our goal is generally to have between five to 10 locations within the first 12 months. And so for us, the hardest thing we can do or what we try to avoid is to enter market and kind of get stuck with one or two locations. The way we’ve kind of built our business, we have local area managers, feet on the street in each of these markets and we want them in stores throughout the week.

And so to cover, to make it from a financial perspective, if you only have one store, it’s kind of hard to have a dedicated resource just going into one store. So we need to be building areas. On the other side, if you don’t put a dedicated resource, now we have to have people potentially driving or going to new states, whatever it may be. And that’s just not efficient. So we want to enter a market and build density. We’re continuing to look within the geographies we exist, but also other attractive markets where again, we think we can really build the scale, which is not only good for us, but also I think good for customers to have a bigger network of shops that they can visit.

Mike:

Gotcha. Well, what was your biggest challenge when you got in this industry? Obviously you said that you’re nontraditional in the sense of getting in this industry, so now you’re here, you’ve got 35 locations, 14 brands. I think I congratulate you on that. What have you discovered that was probably your biggest hurdle?

Seth:

Yeah, I think the hardest thing for us was really understanding the nuance of within a, within a shop, there’s really two shops. You’ve got the front shop and the back shop, and they’re very different beasts. They need to work together incredibly well, but they’re very different types of people. Obviously technicians have the skills that they do, but on the front end you need someone who has incredible customer service. That’s number one. They also need to be able to interact and workflow manage and handle the back of a shop. And I think in theory that sounds easy, but having the skillset to articulate to customers what the problem is, right? A technician is going to come in and tell you whatever this complex problem is. Most customers have no idea what that means.

And I think for myself, when we started this, we brought on industry operators with us. So there was that knowledge level, but I also think what David, my partner and I brought was also, neither of us are car guys, neither of us care to drive cars. And candidly, one of us doesn’t know how to drive manual. I won’t tell you who it is, but one of us doesn’t even know how to drive manual.

And people said, “Well, how can you operate an auto repair business if you don’t know what cars are?”, I said, “Because it’s just widgets we’re selling. Doesn’t matter if it’s cars, doesn’t matter if it’s plates.” You’re talking to a customer who is like me. And I think what we’ve really pressed our teams hard to do is be able to answer that question is, right, how are you going to articulate whatever problem is there to the lady or the man who’s coming in, has no idea and candidly doesn’t care what the problem is. They just want to know that you’re being honest and that you’re explaining what the value is to them and why this is either a safety, maintenance issue or going to help extend the life of their car. And I think really continuing to, we really push our teams to make sure that they don’t forget that and rambling off about blend door actuators and this and that. It just doesn’t mean anything because that’s not what we’re selling, we’re selling [inaudible 00:11:39]

Mike:

And that’s so, it’s so cool to hear you say it because I interview a lot of veterans that grew up in the industry and everything, and they’ll flat out tell you some of the best I’ve heard will say, “Look, I’m not in, technically, I’m not in tires and auto repair, I’m in the customer service business. I just happen. The customer service issue of their life that I’m taking care of happens to be tires and auto repair, but I’m just trying to take the stress away from people every day. That’s what we do.” And you’re kind of saying the same thing that you’ve learned in a short period of time that, “Hey, I’m that guy. I don’t care how you make the clock, I just want you to fix the clock.” Right?

Seth:

That’s exactly right. I mean, that’s almost verbatim what we say, which is if there’s some reason I need to understand something technical, we’ve got a lot of people that can dumb it down to a way that one of the two of us can understand. But so far, I would think 99% of what we experienced has nothing to do with vehicles.

It’s about the most important thing to do is customer experience. How are we handling our customers? We do digital video inspections, we offer warranties. We’re offering experience. I think that the thing that we really harp on a lot is the consumerization trends across retail that continue to exist. We call it the Starbucks theory. Everyone wants to go into every experience they have, and it needs to feel like a Starbucks. And so how are our service advisors greeting you? How are you following up with your customers? How are you keeping them engaged, right? Because it’s not price at the end of the day that people generally care about. It’s the experience and how they’re treated. And so if we can approach it with empathy, if we can approach it with honesty, we’re just offering a better service. And naturally I think customers are going to have a better experience with us.

Mike:

That’s awesome. I had a guy interviewed one time, I think guess it’s been a year and a half, two years ago. But anyway, he said basically, “We want to go on the Chick-fil-A experience in the car service business is what we’re basically offering.” And I thought, “Man, that’s kind of a cool correlation. Okay.” Because I mean, everybody knows that experience. Well, how many times do you hear “My pleasure”? You know what I’m saying?

Seth:

That’s exactly right. I mean, one of the things we really implore our employees to do is right when a customer leaves asking, how was my experience? Would you be interested in leaving us a Google review? And then after that, every single customer within 48 hours of the visit, we followed up with every single customer to make sure that their experience was good. And so I’m not focused on selling, again, not focused on selling cars or knowing anything about cars. I’m focused on the human interactions and the relationships that we can develop with the people that come into our facilities.

Mike:

Well, it’s easy to see why you guys have grown so well in such a short period of time. I mean, 35 stores, 14 brands. And well, let me ask you this too, it just dawned on me if I don’t ask it right now, I’ll forget, I don’t have it written down. But let’s say for instance, somebody’s listening to you right now and they don’t have a succession plan. They are in the Midwest or south, they want to talk to somebody like yourself. How do they reach you?

Seth:

Yeah, we always love to have these conversations. I think one of the sellers who partner with us, he likes to bring it up a lot. He says, when we first met, “If you’re thinking about a succession plan, it’s probably too late.” And he said, it took me a while to appreciate that because if you’re having to think about whether you should or shouldn’t be doing, it should have already probably been done.

And it doesn’t necessarily mean that you got to sell your business today or whatever you want to do, but you should probably get the wheels in motion because I think the worst thing you can have is just kind of paralysis and say, “I just don’t want to deal with it.” Because ultimately that leads you to a situation you’re going to have to deal with and you’re going to be rushed. And so if you can get ahead of saying, hey, ultimately my goal is whether it’s to hand it down to your kids, sell it or give it to one of your employees, it doesn’t really matter what it is, you should be working towards that and making sure you’re approaching the business in that way.

Because I think one of the most common things we hear is, “Well, I wasn’t preparing my business for X.” Well, if you weren’t preparing your business, then are you just leaving money on the table? Are you not giving the experience to your customers whether it’s, “Well, I didn’t upgrade my POS system because I didn’t want the headache.” Well, your customers might’ve appreciated it. Your employees may have appreciated it, you might’ve sold more and everyone’s better off.

So I think that’s the most important thing I always implore people is if you having to think whether you should or shouldn’t be doing succession planning, it’s probably too late. And then in terms of reaching us, people very frequently reach out to us on our website, goodturnauto.com, or will reach out to me. We love to have conversations and understand what are your personal objectives to achieve? What are your business objectives to achieve? And sometimes you’re a great fit and sometimes you’re not. But either way, we want everyone to walk away from a conversation feeling more informed or more have a road to getting what they would like. And so we always welcome those types of conversations.

Mike:

Awesome. If there was one thing on a learning level or I always ask folks if there’s something that you could pass on, is there something that you guys, you live by that, a motto, a quote, something that a mentor gave you a long time ago, whether they’re in this industry or not, that you try to execute in this industry?

Seth:

Yeah, I think for me it comes in a lot of forms and fashions, but effectively the idea that at the end of the day the only thing you have is your name and your word and make sure you approach business from doing the right thing. It may hurt, it may be painful, but if you do the right thing, ultimately it’s going to work out. And for us, that’s incredibly important, I think in a couple ways. Given that we are incredibly inquisitive, the one thing that we tell all of our potential partners or anyone who’s looking to sell is we really do a lot of upfront diligence ahead of presenting any offer. And that’s hard in this industry. And a lot of times sellers get a local broker. It’s a whole nother conversation to have, who is the right person to be representing you? But there’s a bit of diverging interest, which a lot of times brokers just want to get to the quickest, “Hey, how much is this worth? Well, how quick can you tell me?”

And we take a bit of a different approach here, which is we slow that down and try and understand what you actually have because the worst thing we can do is tell you, “Hey, I thought your business was worth a hundred dollars, but when I dig in, it really was only worth 50.” For whatever the reason is. And so the honesty and integrity of telling someone, “Hey, I’m just not going to be able to make you an offer.” Because whatever I put on an LOI, we have close to the penny in every single instance and it’s something we’re really proud of. And so that’s from a seller’s perspective, but from an employee perspective, I tell every single employee, everyone has my phone number, my email address, they know how to get a hold of me. I said, “Someone’s promised you something and didn’t follow through. Shoot me an email, shoot me a call, we will resolve it.”

And fortunately, I don’t know, I think we have 234 employees now, haven’t received a phone call or an email. It’s not to say that we don’t make mistakes, but no one ever said, “Hey, you promised us X and you did Y.” Listen, it’s hurt us sometimes where we either paid someone more than they should have been, whatever the situation. But I think at the end of the day, as long as everyone knows that we’re all playing by the same rules of the road and come with a very honest approach, it’s going to lead to the right outcomes eventually.

Mike:

Man, I like that vibe, you project a very positive vibe with that. And really I think that’s awesome that you make yourself available to all 234 employees that way because even like you said, you haven’t had to deal with a lot, but in the event there is a peace of mind to knowing they can pick up the phone or text you and at least get somebody to hear them out, right?

Seth:

I get an answer. I can promise you that. If nothing more, we definitely don’t let things brush under the rug. I just don’t think it’s good for business. So as we continue to grow in scale, it gets harder and harder and naturally more people kind of follow the chain of command. But from more of a philosophical and principle level, everyone knows how to get a hold of us. We’re not shy about it and we pick up the phones. And so I think that type of atmosphere is what we want to empower people to feel. Listen, it’s not perfect and by no means do I think we don’t have room to grow, but everyone from the bottom up or top down knows that honesty and integrity is first and foremost in all aspects of the business.

Mike:

Good stuff. So folks, if you want to get a hold of them again, the website address is goodturnauto.com all together. Well, Seth, tell us what you do for a hobby, what you like to do for fun outside of work.

Seth:

If I’m not fishing, I enjoy flying airplanes. It’s a hobby that I picked up about 12, 13 years ago. Always loved aviation. We have flying in the family and I decided it was time for myself to get my pilot’s license. And so I’m an instrument-rated private pilot and that’s my, as close as I get to mechanics is just flying airplanes. But…

Mike:

Hey, there’s a lot to know there. There’s a lot to know there. What about, are you ever going to go, I mean if you’re IFR right now, do you intend to get Twin Engine or anything like that yet or?

Seth:

Yeah, I think at some point I will. I definitely would like to. Time is just the devil there. It’s only 24 hours a day, but it’s definitely on the bucket list to finish up.

Mike:

So when you say fishing, I’m going to assume you like deep sea fishing? I mean being from Miami.

Seth:

I do, absolutely. Feel fortunate that it’s pretty easy to get out and fish down here. And so when I’m able to escape the two kids, it is definitely something that is a good pastime to have.

Mike:

That’s awesome. Well, Seth, I can’t thank you enough for being part of the podcast. It’s been a real pleasure.

Seth:

Absolutely. Really appreciate you having me, Mike.

Mike:

Absolutely. And best of luck to you guys in Goodturn.

Seth:

Thank you.

Mike:

Before I close out the show, I want to give a shout out. I did this last time I did a podcast, but I think a lot of these guys, I want to give another shout out to S&S Tire, based in Lexington Kentucky, happy 50th anniversary, great company with great people. To all our listeners, thank you for being part of our podcast. We are grateful for you. If you would like to recommend a guest to me, please email me at [email protected]. Till next time, my podcasters, be safe. Be grateful, and have a great day.

Announcer:

Thanks for listening to the Gain Traction Podcast. We’ll see you again next time and be sure to click Subscribe to get future episodes.

Contents hide

1 In this episode…

1.1 Here’s a glimpse of what you’ll learn:

1.2 Resources mentioned in this episode:

1.2.1 Quotable Moments:

1.2.2 Action Steps: