WardsAuto.com, which targets car dealers, recently posted a story urging car dealers to take a serious look at adding tire sales as a way to bolster thin dealership sales and profits.
“Tire sales might not generate as much profitability as other dealership sales, but experts agree they play a vital role in customer-retention management,” the story begins.
“More than anything else, it gives the customer no reason to go anywhere else than the dealership,” columnist Lee Harkins was quoted as saying. “Dealerships are getting in there and slugging it out with the tire stores and doing a darn good job. In a lot of cases, they’re winning.”
“We wanted to keep everything in the dealership, instead of sending customers out,” said Dennis Gillaspie, parts manager at Burt Buick Pontiac GMC Truck in Littleton, Colo., in the story. The dealership stocks Michelin and Firestone brands. “We had been doing tires from an independent tire shop down the street, and we are now just as competitive as he is.”
And how why do car dealers what to get into the tire business? According to Harkins, tires make an excellent customer retention tool. “A lot of them (car dealers) don’t understand it’s not about the tires, it’s about keeping customers,” he said in the story. “I’m not saying give the tires away – make $5 or $10 a tire – but it’s all the other things that come along with the tires.
“You have the car on the lift and you can look it over and recommend any needed business,” Harkins said. “And the key word is ‘needed’ business. It should not be considered an opportunity to go out there and start squeezing them to buy stuff they don’t need.”
Representing the tire-side of the story, Thom Peebles, Michelin North America director of car dealer sales, told WardsAuto.com that, “as more dealerships turn to tires, their business is becoming ’a very key channel for growth in our industry and our organization in particular.’”
“We look at it as long-term productivity,” Peebles said in the story. “What we’ve found in most cases is when tires are purchased, they’re purchased with other parts and services. We think tires are a very important part of building that very important point of loyalty to the dealer.
“If you’re able to make that (car dealership) a one-stop shop, you’re conditioning the consumer to come back for other maintenance-type items,” he said.
Scott Jackson, fixed operations manager at Peterson Autoplex in Boise, Idaho, told WardsAuto.com that “there are advantages for his customers buying tires from his store,” such as safety.
“People at the dealership have a much higher level of training in a lot of areas vs. some of the tire stores that hire high-school kids,” Jackson was quoted. “I really think the risk is not as great at a dealership.”
