ENCINO, Calif.-Added value. Dealers everywhere seem to be searching for ways to add value to their sinking tire margins. Most will tell you it's no easy task.
But more and more dealerships are taking advantage of a growing roadside assistance service that company officials say can boost profits and increase market share.
Auto Road Services Inc. (ARS) began marketing its roadside program, patterned after similar services offered by many auto manufacturers, to tire dealerships in the U.S. and Canada in 1991.
Administered 24 hours a day by Emergency Road Services Inc., a 12-year-old firm that routes a network of more than 12,500 independent towing companies, the program allows tire dealerships to provide their consumers with a coast-to-coast, on-the-road, spare tire replacement service.
Customers stranded with flat tires can call a toll-free number they received when they purchased the protection plan. Emergency Road Services' dispatchers then contact nearby towing companies.
On scene, the tow operators will replace the flat tires with the customers' spares.
Roadside service is ``peace of mind'' to a tire consumer, according to Robert Vernon, ARS executive vice president. Dealers pay a set fee for each tire carrying the service based on the number of tires the dealership sells each month. There is no up-front cost.
About 1,500 dealerships throughout the U.S. and Canada are using ARS's program, Mr. Vernon said.
Providing roadside assistance as part of a warranty helps boost market penetration, especially among the female and elderly customer segments, according to dealers contacted by TIRE BUSINESS.
Chris Jones, president of Anderson, Ind.-based Tire Barn Warehouse, said the service has helped boost sales to those two market segments since joining the program nearly one year ago.
ARS leaves marketing of the program up to the participating dealerships. Many dealerships involved in the program sell the service by charging an extra $1 with their road hazard warranties, according to Mr. Vernon, who said the extra charge helps boost margins on tires carrying the roadside assistance program.
Edmonton, Alberta-based Fountain Tire Corp., which has used the ARS service for the past two years, includes the program in its Gold Seal Warranty program also featuring flat repair and mileage protection.
``Emergency roadside service is perceived by the customer as added value to the tire,'' said Fountain Tire Marketing Manager Brent Hesje.
He estimated about 150 customers have had occasion to use the service during that time period.
The Canadian retailer sells the services as an added, optional expense on its tire lines-a marketing strategy customers appreciate, Mr. Hesje said.
``Our customers don't feel that a warranty program is being buried in the price of a tire,'' he explained. ``They don't have to buy it if they don't want it.''
By way of contrast, Allied Tire Sales Inc., based in Orlando, Fla., includes its roadside program on all of the tires it sells. That program, according to Allied Vice President of Sales Rob Crostarosa, has ``definitely helped'' boost sales since the company began offering the service in August.
``We're in a very competitive market,'' he said. ``...It's tough to distinguish yourself. But we have done it.''
To tout its new program, Allied Tire produced a series of television advertisements featuring a roadside assistance theme.
``It's something that definitely fits our philosophy: `When you buy tires from Allied, Allied stays with you,' '' he said.
To date ARS has not marketed its program to smaller dealerships because of the expense involved, Mr. Vernon said. But a number of state dealer associations, including the Northwest Tire Dealers Association, have expressed interest in offering the program to members.