Tire sales can boost revenue and customer loyalty at dealerships that employ the right tools to make the buying process painless, industry executives say.
A new-vehicle shopper who also buys a second set of tires and stores them with the dealer becomes a repeat customer, said John Hairabedian, CEO of the Quebec-based dealership group HGregoire.
“Even if we have to sell [tires] for almost no margin, doing it will guarantee us the customer’s going to come back in the future.”
As an incentive to cement the relationship, his dealerships offer customers free tire storage for the first year. HGregoire does this “to ensure that they get to experience our service departments. We will not be aggressively marketing tires like independent tire [stores do] because for us, the best place to sell it is definitely at the time of sale.”
Andy Dalrymple, founder and president of the online tire quoting tool QQuote, said that while 69 per cent of Ontario drivers purchase winter tires, only nine per cent buy them from auto dealers.
“If you take a 1,000-car dealer only capitalizing on nine per cent [of sales adding on tires], that gap works out to be $2 million in profit between the tires, the wheels, the sensors [and the] brake changes,” Dalrymple told attendees at the Trillium Automobile Dealers Association’s online Auto Dealers Innovation Series conference in September.
ANOTHER TOOL: STAFF
Although online tools are an important consideration, Dalrymple said the most fruitful opportunity comes from providing tools and training to frontline staff who account for an average of 87 per cent of tire sales at dealerships. Rolling a tire package into a new vehicle’s monthly payment up front is often an easier pill for a customer to swallow than a lump-sum cost the following November.
A knowledgeable salesperson with an effective quoting tool close at hand should be able to give a customer a price in seconds without having to call the parts desk, Dalrymple said.
“You have the best opportunity, better than any tire shop out there, to sell that [winter tire] package [with the new vehicle] and start that recurring revenue stream,” Dalrymple said. “It could be $15 or $25 a payment depending on the terms, but breaking down the pricing of it will help the customer visualize and avoid that massive bill.”
Some tire storage tracking software records potential problems such as low tread depth or bulging, he said. That presents an opportunity to offer customers replacement tires ahead of the busy season.
“Really look at this data,” Dalrymple said. “You have a bunch of customers in storage with problems. They’re going to expect just a regular switchover,and then you’re going to try to sell them tires and they’re not going to be happy. ... Reach out and show them a picture, and then get them to say, ‘Yeah, fix this.’ Your guys can fix it in the off-season when they’re not as busy and have it ready to go.”
GOOGLE ‘TIRES NEAR ME’
A website that ignores tire sales and doesn’t come up in Google search results is another lost opportunity, said Owen Moon, CEO of the online marketing agency Fixed Ops Digital.
“If you go right now and type in ‘tires near me’ [into Google], in your local market you’re going to probably see that not one franchise dealer actually shows up. It’s a huge problem.”
Google ranks search results based on content that is unique, useful and compelling, Moon said. To achieve this, dealers should build out service-department pages with detailed descriptions, video integration and clear pricing.
Dalrymple suggested creating a separate tire-centre page that sends a customer to a quoting tool within three clicks. This tool should produce an accurate and pared down list of choices that excludes discontinued or specialty products such as studded tires. The tool also should be easy to digest, for example, offering a good-better-best choice scenario.
“It’s a famous business case where if you present to a customer three jars of jams, it’s easier for them to make a decision than if you have an entire wall,” Dalrymple said, citing sales data analysis showing that customers most often choose the tire presented as the best choice.
“This is a grudge purchase for many people. They don’t do research. ...They’re just going to pick what they think is the best.”