Cashing in On Broadline Tires
Everyone buys them. Everyone sells them. But nobody is quite sure what they are anymore. And it appears they won’t last much longer, if they even exist now.
Back in the days of bias ply and bias-belted tires – and even after radials took over – the term "broadline tires" had a firm definition and a firm place in the market. As vehicles, driving habits, tire technology and consumer
desires changed, traditional broadline tires have been blurred nearly out of existence.
Tires that were once easily categorized – and, for all intents, a no-brainer sale – are now square pegs jammed into round holes.
Today, the experts are conflicted over true broadline tires. While they feel broadline tires still exist – and agree they won’t exist for too much longer – they all tend to define the segment differently.
But in today’s world, when it comes to beating your competition in the "broadline" market, the experts all agree that success lies in getting back to the nuts-and-bolts of tire sales.
What Are They?
"In another year or two, I don’t think you’ll see ‘broadline’ be ‘broadline’ as it has been known in the past," according to Don Helker, vice president of Del-Nat Corp., marketers of Delta and National brand tires.
As of late, broadline tires were generally considered 75- or 80-series all-season radials of varying mileage – non-speed-rated tires that covered a large portion of the vehicle market.
In the past few years, thanks to the OE market, tires that were formerly defined as "performance" – H- and S-rated tires – and "touring" have become broadline, said Helker. So, too, have "rain" tires. And the continued growth of light truck/SUV market has further eroded the segment.
"We were all brought up on ‘good-better-best’ selling," said Dennis DeLeonard, director of marketing for Continental General Tire Inc. (CGT). "But not only was there good-better-best, there were things like open price point or low cost radials below the good, and super premium tires above the best. And, of course, there was high mileage warranties woven all through the segment. The result has been some creative marketing and some confused consumers."
Both Helker and DeLeonard agree the traditional definition of broadline no longer holds, and they question the future need of standard tires. "Broadline is going to do a complete flip-flop in the future, if you even want to continue using that term," said Helker. "Broadline is not good terminology to use in the future. As far as I’m concerned, they’re all going to be performance tires. Touring sizes and performance sizes."
According to DeLeonard, CGT moved away from "broadline," creating what they call a "power line" of S- and T-rated touring tires. "It’s a more refined tread design than a standard all-season, with performance characteristics that give a good ride and good handling," he said. "Now in this line we cover everything from 13-inch, which has about totally gone away, all the way up to 16-inch and down to 65- maybe even 55-series."
Who Are They?
The broadline tire customer probably has changed a lot less than the tires themselves. Women. Seniors. First-time car owners. College students. Owners of a second or third family car. Third or fourth owner of one vehicle. Drivers just trying to get to the end of a lease.
According to CGT’s DeLeonard, today’s broadline customer is "a person who wants a good value, doesn’t want to really think a lot about their tires, and who relies heavily on a dealer recommendation."
Certain types of customers, like senior citizens, said Helker, "want a good product, but they don’t necessarily need a premium product. They want something that is dependable and safe, but they are also very price sensitive."
And it is in the area of price, Helker cautioned, that tire dealers have to be on guard, or risk losing even low-margin business. "Some of the warehouse clubs really zero in on price-oriented people. The independent dealer has to be aware of that so he can be sure he can compete with those outlets.
"With the true performance product, tire dealers are recognized as being the reliable person to see because he’s the most knowledgeable. When it comes to the old broadline product, even though the consumer, for the most part, doesn’t understand the product, I think they are looking for the best buy. Dealers have to watch that that type business doesn’t escape him and go to price stores," Helker said.
When it comes to broadline tires, are customers more likely to go to mass merchants or warehouse clubs? "That’s a logical assumption," said DeLeonard, "But I think the tire purchase is a lot more complicated than that. There are a lot of customers, for example, who are challenged by having a limited amount of time to get things done. They welcome the chance to go to a tire dealer who is advertising out-the-door pricing and offers a package that is very consumer-friendly."
DeLeonard admits that when it comes to more expensive, speed-rated tires, the dealer is viewed by most consumers as being the expert. "But as the market goes in the other direction, the tires do become somewhat of a commodity. However, I think many retail customers really find out that if they have a good relationship with their dealer, the dealer can save them much more money (vs. mass merchants or warehouse clubs) by suggesting the most appropriate product for their vehicle."
Back to the Basics
Competing for profits in broadline tires does not have to be on price alone. Helker and DeLeonard agree that the most effective weapon in beating price-oriented competitors – especially with the diversity of customers, vehicles and price points – is getting back to the very basics of tire selling.
The first priority is to let your market know you are there for every tire need – even for those the consumer may consider standard. "Dealers have to be aware of all consumer segments, whether it be seniors, younger folks, or women," said Helker. "Over 50 percent of the tires sold are to women. So dealers have to design their business to appeal to all the potential segments in their market. They have to do that through their advertising, through store appearance, through how they handle business, what special services they offer, even their hours of business."
The next step is probably the most overlooked. "Well, 90 percent of the time it doesn’t happen, but the first thing the salesman needs to do is go out and look at the customer’s car," said Helker. "That goes way back to the traditional ‘Five Steps to a Tire Sale.’ It still doesn’t happen. You’ve shown an interest in the customer when you go out there and look at their vehicle." And that’s important because the goal is to gain the customer’s confidence."
Don’t just ask the customer what their tire size is, or how many miles they have on their vehicle, he cautioned. "More than 90 percent of the people have no idea what size tires they have," Helker said. "Walk out, show an interest, look at the vehicle, check the mileage. That should automatically tell the salesman what tires the customer should be considering.
"If it’s a high mileage vehicle, then the customer should be looking for a mileage tire. If it’s an older person with an older vehicle, they’re looking for value and safety. They’re not looking for a performance tire," he said. "You have to observe it, you have to go look at it. A lot of it today is guesswork, and that’s what causes a lot of unhappy customers."
CGT’s DeLeonard concurs. "The salesman has to determine the intended use of the vehicle, assess its overall condition, find out how long the customer intends to keep it, or if the customer has any budget limitations," he said. "The independent dealer has the advantage because they may be seeing the customer on a regular basis any way, and has a fairly good idea of their needs and wants." If it’s a first-time buyer, though, "it’s very important to take a few extra minutes and really understand the needs of that customer."
Know Your Stuff
The other advantage dealers hold over mass merchants or warehouse clubs is knowledge. "One of the biggest glaring weaknesses in a tire store is to not have anyone really knowledgeable about the products," said Helker. "To get the customer’s confidence, the salesman should know the products and be able to speak fluently about the benefits of one tire vs. another without having to read it out of a book. Training is the single biggest thing that will gain the confidence of and sell the customer.
"Consumers want to be sold," he said. "They really don’t want to have to go all over town trying to get the best product. They don’t want someone to tell them one tire is better than another one. They want someone to explain why one tire is better, and to have the right information to answer their questions."
But current realities, said DeLeonard, can make it extra hard on dealers. "A lot of it does get down to dealer knowledge and education. But turnover is a big issue, and the labor market is extremely tight. So dealers face constantly bringing on new people and having to train them."
That’s one reason why his company is trying to simplify things for dealers by changing the focus. "We’re selling our product to fit customer needs rather than getting hung up on all the different sizes," said DeLeonard. "If the dealer’s salesman can become knowledgeable about one tire line – that it’s a tire that gives great all around performance, great tread life as guaranteed by the warranty, great road hazard protection – then they can focus on selling to the category of tire and vehicle instead of worrying about sizes. That’s important compared to a salesman trying to pull from three or four replacement lines and having to be knowledgeable about all the different characteristics of all the different products."
Illustrate the Tire’s Value
If your salesman has learned about the customer, earned the customer’s confidence, and is well-versed on the features and benefits of the brands and models you offer, there are a couple of techniques you can use to help close the sale.
- Point out the less-obvious features and explain the benefits. Focus on how they provide greater value, safety or how they match the particular concerns the customer has expressed.
- If the customer is leaning toward a less-expensive tire – a tire you don’t feel truly meets his needs – put the tire he likes side-by-side with the one you’re recommending. Point out the physical differences and benefit variations, and discuss any differences in expected mileage, traction, UTQG ratings, warranty, etc.
- Numbers don’t lie, so use numbers to illustrate the "value" of a tire. This is especially helpful to compare multiple tires the customer may be considering. Take the retail cost of one tire – don’t include add-ons like road hazard warranties or mounting/balancing charges – and divide that dollar figure by the warranted mileage for that tire. This will give you the dollar cost/mile for that tire. Then you can take the warranted mileage and divide that by the retail cost to show the miles/dollar value of the tire.
- Don’t be afraid of UTQGs. While the tire industry still isn’t a fan of UTQG ratings, consumers – and consumer magazines – have really taken to them. Don’t be afraid to help your customer compare UTQG ratings, especially if it will help you move a set of premium tires.
Smart. And Getting Smarter
Even in the "broadline" segment, there’s no doubt consumers are getting smarter – or at least taking the time to learn more about – tires. Not every consumer, mind you. But thanks to consumer magazines like Consumer Reports and the Internet, there is more information available about tires than ever before.
The experts caution that you shouldn’t let the smart consumer do your job for you.
"A customer might have an idea coming in of what they want – they might have read an article – but its still up to the professionalism of the tire dealer to just take a minute, look at the vehicle, and ask a few questions," reminded DeLeonard. "Getting the absolute right tire on the car is the best way to assure that they will be satisfied with the product.
"More and more you have people shopping on the Internet, and coming in with a lot more information," he said. "They might look up the size options for their car. They might visit some manufacturers web sites and do some initial comparison shopping. They are coming in more and more educated."
Helker sees the Internet taking a much greater role in the tire shopping – and buying – process. "The consumer being able to go on-line and find out about your products and services, your hours of operation, compare the features and benefits of the tires, and get directions to your locations. And maybe print out a coupon. That’s a tremendous thing for dealers," he said.
But it will still take some good old-fashioned tire selling to complete the sale. And keep your customers away from the competition.