Tapping small accounts can bring big business — ATA's Besancon

KAHUKU, Hawaii (Feb. 27, 2017) — Much like “less is more” is an architectural concept, “smaller can be bigger” is a business concept Alliance Tire Americas' (ATA) Bruce Besancon hopes tire dealers will consider in building their commercial operations.

Dealers who aren't tapping into local municipalities, hobby farms and other small commercial accounts are missing out on millions in potential business, Mr. Besancon told those attending the 2017 Tire Industry Association OTR Tire Conference at Turtle Bay Resort near Kahuku.

Mr. Besancon, vice president marketing for ATA, said an increasing focus on infrastructure improvements will drive demand for tires for skid steers, telehandlers, backhoes, small loaders, etc. — tires with rim diameters of 25 inches and smaller.

“The big boom of mining just hasn't been there in the past few years,” he said. “But there are other opportunities out there — growing opportunities — in small OTR, for rim sizes 25 inches and under. Dealers need to stay aware of those opportunities and set themselves up to cater to those customers.”

One critical element of this market opportunity, Mr. Besancon said, is that the dealer “has 99-percent sway in what the customer buys….”

Skid steers are an especially bright spot, he said, because they have been adopted for so many uses and in many cases involve both tires and wheels.

There are more than 800,000 skid steers in operation in the U.S. today, Mr. Besancon said. That compares with roughly 14,000 mining haul trucks, which represent big-ticket sales but for which competition is intense and demand trends can be fickle.

Most small OTR purchases are made in response to an immediate need or emergency,” he noted. “It's critical to have the tire available when the customer needs it.”

Dealers courting this business also need to be able to offer fitting and/or wheel replacement services, he added.

Another market that offers business — and thus profit — opportunities is that for small tractors—the 40-hp and below category that includes hobby farmers, vineyards and small commercial farms, Mr. Besancon said.

Sales of such tractors grew more than 11 percent in 2016, the ATA exec said, and have shown growth well over the tractor industry's five-year average. A key subsector is the rental equipment area, Mr. Besancon added.

“When you rent out a machine, what's the first thing to get torn up?” he asked those in attendance, who replied en masse: “The tires.”

Taking a serious run at this market might require some extra homework, he cautioned, such as boning up on what tires are appropriate for the various operating environments, understanding and stocking the popular sizes and tread patterns, etc.

“When a customer is looking for an OTR tire, chances are he's just thinking of his tire as an inner tube on a wheel,” Mr. Besancon said.

“He may not even know what he currently has on his machine. This is the perfect time to develop that consultative service-oriented relationship you want with your customers, to make sure he gets the tire that's absolutely the best for his needs — severe service, foam-fill, special tread patterns, in a brand you know you can trust with your reputation.”