AKRON (Sept. 15, 2014) — At first blush it sounded like the one thing to not tell an auditorium full of tire dealers.
With a grin and a sweeping gesture, Matt Winslow, director of speakers and content for Automotive Training Institute (ATI), at first seemed to take the air out of the room with a brash statement: “Stop selling tires,” he began, deftly inserting a pregnant pause for emphasis during his keynote address at the International Tire Exhibition & Conference for Tire Dealers/¬Auto Service professionals (ITEC) Aug. 20 in Orlando, Fla.
Then he hammered home his point, quickly adding: “Start selling tire packages.”
Most tire dealers will agree that margins on tires have plummeted over the years, and many actually have reduced the number of tires they sell to focus on supposedly more lucrative auto services.
However, Mr. Winslow presented his calculations to the audience showing that selling a four-tire package—balancing, TPMS rebuild, disposal and a high-margin tire protection plan—actually generates more net gross profit than an hour of auto service.
Tire protection plans turn a tire customer into a repeat client who returns periodically to the shop for adjustments, rotations and balances, he said.
That is an important hook, since tires are more durable, creating longer intervals between tire replacements.
Another point to consider: Oil change intervals are being extended with newer vehicles. So a tire dealer counting on oil changes as a magnet to draw service customers is likely to see a motorist more often for a tire rotation, Mr. Winslow said.
And as those wheels are pulled off to rotate the tires, a tech may find other needed services, such as brakes or suspension replacement.
“In the future, if you own the rotations, you own the market,” Mr. Winslow declared.
When selling tire packages, he warned against offering a customer a confusing hodge-podge of tire package choices that may turn them off. Just offer three tiers—good, better and best—based on the type of tire they choose. All three choices should offer the same add-ons, including that profitable tire protection plan.
Dealers also can sweeten the deal by noting the safety net of having a roadside assistance plan that offers the convenience of getting a flat repaired at a nearby service shop.
Tire dealers and their salespeople should assume the customer will purchase a tire protection plan as part of the tire sale, according to Mr. Winslow.
Some dealers we've talked to have very successfully sold tire protection plans. Part of their secret is to offer the plan to every customer buying tires—no exceptions.
Many companies, including wholesalers and marketing groups, offer tire protection plans. With competition as keen as it is, it makes sense to give Mr. Winslow's mantra a try: Stop selling just tires and start selling those tire packages.
This editorial appears in the Sept. 15 print edition of Tire Business. Do you have an opinion on it? Send your comments to [email protected]. (Coverage of the International Tire Exhibition & Conference for Tire Dealers/¬Auto Service professionals (ITEC) event in Orlando, Fla., also appears in the Sept. 15 issue.)