John Turk prefers to stay behind the scenes.
The president and CEO of Conrad’s Tire Service Inc. doesn’t appear in radio or television ads, preferring to leave that to members of the Conrad family who serve in various roles in the company.
Besides, being the center of attention would put Turk in an unfamiliar position. As one of nine children, he is used to sharing the spotlight.
Turk graduated from Cleveland State University with a degree in business administration with an accounting major. He worked in the tax department of Price Waterhouse for three years before joining the entrepreneurial department at Arthur Young.
Two years later, in October 1986, he joined Conrad’s as leader of operations. On Jan. 1, 1990, he was named president and CEO.
The company has added seven locations since 1999, with plans to average two more a year until it goes from its current 24 locations in Northeast Ohio to about 40.
Smart Business talked to John Turk about the challenges of running a growing family-owned business.
Did growing up in such a large family teach you anything you can use as CEO?
One, it taught me to do my best with scarce resources. We were happy with just a basketball. It made 10 people happy. I also had to get along with people. There wasn’t any other option in a small house in Brookpark with 11 of us.
We found ways to get through all kinds of things. Being so close to people, I learned to observe what people do well and what they don’t do well. I learned a lot of positive things, particularly from the oldest three.
We were always happy with what we had. We weren’t focused on what we didn’t have but always with what we did have and we were happy with it. I developed a distinct character being in a situation like that. It was very positive. I think it was an awesome experience.
What are some of the challenges you’ve faced as Conrad’s has continued to grow?
First and foremost, finding good people, developing good people and providing the right amount of resources so that they are excited in what they are doing day to day.
Our industry is a people-intensive industry. If we don’t do a good job there, we are not getting past store one, let alone 24. Those folks are our face to the world, especially our customer base.
The other part that has been difficult for us is finding the proper zoning and getting people to understand us. People envision unclean facilities with cars outside with people working on them with all sorts of noise. I’m not saying there isn’t dirt and noise, but it’s no more than from the traffic driving by.
There are also issues like workers’ comp, medical insurance and the balancing of resources.
What kind of market research do you do, and how do you apply the results?
When we do a direct mail piece, we put some coding in to track it. We watch the results of every direct mail piece. For radio and cable, it is not a direct correlation.
We are trying to get our message to the market on a broad basis. The only way to measure that is to measure the sales growth. You have to look down if you are promoting tires to see if tire units are moving at a pace you are happy with.
What we’ve done is had the courage to spend money on advertising and marketing, and as they’ve paid off, put that money back into the market again and again.
We first took baby steps and felt good about the results. Instead of taking the money and putting it into the bottom line, we have reinvested it. It has had a multiplying effect in terms of store sales.
In the last four to five years, we have been reinvesting. Our advertising budget today is twice what it was four years ago.
Do you think the auto repair industry has a negative consumer image?
There is no doubt it is misunderstood. We are fighting some long-term negative thoughts on the industry.
We face it in two ways. What we are doing is putting up quality buildings. We don’t do repairs outside and race the engines. We are using computers to do our diagnostic work.
When we are going into sensitive parts of town, we have to convince people we’re not what they think. They don’t understand our business, and it’s our business to educate them.
Consumers in general are not as appearance-driven. They are looking for a trust relationship. We sell tires and service repairs, but in the end, when you do business with Conrad’s, you enter a relationship of trust. They are looking for someone who is honest. Everyone make mistakes, but the reality is that they usually have no idea what they are spending their money on half the time.
They have to default to something they can feel. We want everyone in the relationship to feel the trust. That is a difficult thing to convey, and you can’t convey it across one meeting at the counter. Consumers have to develop that trust.
We have processes to help build that trust. It is the essence of why we are outperforming the market. As a retailer, when you have an initial visit, everyone else wants to do business with you. In those initial visits, we want to form relationships.
We want to show people we are trustworthy. The relationship happens naturally, and it is helping us outperform the market.
Do you find that customers are loyal when it comes to choosing an auto repair facility?
You have to decide what type of business you have. You are either transaction- or relationship-oriented. Our model is relationships.
Do we get back customers automatically? Absolutely not. But we are price-competitive, and if customers see us as trustworthy, hopefully they will not go anywhere else.
From my end, do I care if your brakes wear out? No, I don’t care. When they wear out, bring them by and we’ll fix them. We are not transaction-oriented.
We want to be in a relationship and do a good job. Our company realized that early on and never let that fall.
Does that make it more difficult to gain customers from other shops?
I think one of the reasons we’ve done well is we’ve invested in advertising. The message isn’t price-oriented. We are very competitive if you price our products, we’re either right there or lower than the competition, but that’s not the issue. We don’t talk about price.
Consumers focus on price if they aren’t given any other information. We prefer to provide all the other information so they will choose someone to do business with long term. Consumers don’t want to bounce from one tire and service business to the next. They want to find someone they are comfortable with.
We prefer to talk about other things that do matter and develop a relationship. We focus on things like warranties and convenience and that we are technically strong enough to meet their needs.
We have a product, and we tell them if they have a problem how we’ll handle it. I feel that’s what we sell. People want to do business with Conrad’s because we have close-knit people who are technically strong, and we buy and sell well. We’ve been around a long time and are family-oriented.
I could advertise what I sell a lube and oil filter for and maybe win the battle, but that is not how you develop a long-term relationship.
Does the state of the economy affect the repair industry, or is it recession-proof?
We sort of trade within a range. In general, the economy has a slight impact, though we are not recession-proof. If the economy is great, we will not move all the way up with it, but if it’s terrible, we will not move all the way down with it.
We do find the type of work changes. If the economy is strong, we see strong tire sales and maintenance things, like radiator flushes and air conditioning exchanges. When the economy goes bad, those things fall quickly and are replaced by repairs.
It’s really a case of $1 from one area supplanting the other. The only way to move revenues up is market acquisition. We have to gain market share and take on more customers.
How has the auto repair industry changed in your 13-plus year tenure as CEO?
It’s changed dramatically. When you go out and talk to people in business, everyone is complaining about this problem or that problem.
The reality is, it’s every industry. The big are getting bigger, and it’s difficult for the smaller guy. People-related costs and capital investment levels keep climbing. Technology has made huge changes to the ability to service cars. The people who are willing to keep up with that are the people who are thriving.
The business environment has sloped upward. You either face those things and climb up the slippery slope or you are staying still.
What are your goals for Conrad’s?
John Turk’s goal is to leave a legacy — that Conrad’s continues as a company beyond me. Mr. Conrad is still part of the company, I’m sort of the second, and I would like to see it go to a third and fourth generation as an independent unit.
In the short term, we are focused on more stores. We are investing in more stores to take advantage of the current performance and advertising goals we have.
Final thoughts?
We are very excited about the Cleveland market and the opportunities here. We are looking forward to the opportunity of growing. I think very positively of the area and the people that make it up.
I’m excited to be in business and I’m having fun. It’s a great environment to work in, and we’ve got a lot of neat things going on here. How to reach: Conrad’s Tire Service, (216) 941-3333 or www.econrads.com
