Why tires are key to keep car dealership service customers coming back

Ask fixed ops executives why they're investing in expensive high-tech equipment, expanding their marketing efforts and ramping up adviser training to sell more tires — a low-margin item — and they'll tell you it is not just about the amount of money they make on each set of radials that rolls out of the service lane.

"It is definitely a retention tool," says Mike Zalowski, regional fixed ops director at MileOne Autogroup, a 77-dealership East Coast group. "We don't want our customers going someplace else for tires. If they bring the car to us for maintenance, when they buy their next car we want to make sure they come back to us."

At Mel Hambelton Ford in Wichita, Kan., tire sales are booming, going from nearly zero in 2008 to around 600 per month today. Hambelton sells tires through two channels: its service department and a Quick Lane store three blocks away.

Although most of the MileOne stores and Hambelton are more than 1,200 miles apart, they have a similar approach to selling tires. Every vehicle that comes in for service gets inspected every time. Service advisers bring the same level of expertise to tire sales as their counterparts at Goodyear, Firestone, Discount Tire and other independent shops. With prominent point-of-sale displays, these stores let customers know they are in the tire business. And most importantly, their prices are equal to, or lower than, those of local competitors.

Strategies such as these have helped franchised new-car dealerships grow their share of the replacement tire market from 1 percent at the turn of the century to perhaps as much as 10 percent today.

But that means the nation's 17,000 new-car dealerships are still losing around 90 percent of tire sales each year, a market that accounted for around $26 billion in sales in 2020.

"Tires are probably the biggest defection point that a dealer faces today," says Tim Hebron, vice president of sales at Dealer Tire, a Cleveland-based distributor that serves roughly 8,000 franchised dealerships in the U.S. "We know that where 80 percent of consumers buy their tires is where they get their maintenance work done. The more effective we can be making consumers see the dealer as a tire retailer, the better chance they have of capturing all their maintenance needs."

While there is no one-size-fits-all strategy to increase tire sales for every dealership, there are basic steps that every service department should follow, says Chuck de Martigny, owner of Jungle Cat Marketing. His Tampa, Fla.-based firm creates tire-related point-of-purchase materials for service departments, such as posters, videos, wraps and tire displays. He offers three tips:

1. Make tire purchases easy and give discounts. Tire stores, de Martigny says, are set up to provide fast, convenient service. Dealerships should be, too.

"A car dealer's service drive is [often] a pain in the ass — getting an appointment, getting in and getting someone to talk to you that you feel comfortable with. The Tire Kingdoms and Goodyears of the world are more convenient than the car dealer. They know when the customer comes in for an oil change, if they give them coupons, they are never going to lose that customer."

So, de Martigny says, dealers should offer a price match guarantee and coupons for discounts on services.

2. Offer free tire and suspension checks. Dealers, he says, should try to get customers to think of their vehicle's tires as their No. 1 safety issue. Let customers know they can come to the store and have the air pressure, tread and alignment checked for free any time. And, he says, it's a good move to tie that messaging to summer road trips.

"If you can set up a program for your customers to come in and get their tires checked, you have the opportunity to walk around the vehicle and look for other issues: worn-out wipers, cracked windshields, fogged-up headlamps. If you can rotate the tires, that gives you the chance to check the brakes and the ball joints, etc."

3. Educate the customer. "Consumers are interested in the lowest price because no one takes the time to explain why the tires that came on their car from the factory are the best," he says. "Tire manufacturers and automakers work together to develop the best tires for each vehicle. They want the car to perform to its optimum when the customer takes it on the test drive."

The experts who spoke to Fixed Ops Journal for this report all agreed the key to increasing tire sales starts with the inspection. Every car that rolls through the service lane must have its alignment checked and the tire tread measured.

"One thing we've been doing is looking at the technology we have," says Zalowski, of MileOne. "In two of our stores now — and we are putting it in three others — we have the Hunter [Engineering] Quick Check service lane tool."

The fully automated machine checks the alignment and tire tread as the customer drives in. The results are immediately posted on large monitors customers can see, and a printout with results in red, yellow and green signifying the immediacy of action required is shown and explained.

Even if nothing is amiss, Zalowski sees a win for the dealer.

"In many tire stores, they sell you an alignment when a lot of the time you don't need an alignment," he says.

At dealership service departments with the latest tread and alignment monitoring equipment, "you save money if your alignment is perfectly fine," Zalowski says. "We only do alignments if you need it. Customers realize that, and they trust you a lot more on anything you are trying to sell to them.

"So when their car goes through and it is yellow or red, they really believe you."

Trust also is at the core of Mel Hambelton Ford's success in growing its tire sales. The store's service advisers will comparison shop competitors with customers and prove they can meet or beat anyone's price. And every car gets inspected every time, says Service Manager David Grey.

"Our customers have grown to expect that," he says. "They want that checkup. They want to know what condition their vehicle is in, and they want to know they need tires long before they buy the tires. Same thing with brakes and other wear items.

"They can watch these go from green to yellow, and they can plan accordingly."

The inspection leads to the next most important aspect of selling more tires: training. Service advisers must be able to read the information on the sidewall of a tire and explain to customers the nuances of such things as aspect ratios, speed ratings and load indexes with the same expertise and confidence as their competitors at independent stores.

"Tire manufacturers push heavily to make their independent dealers well trained and knowledgeable about the products they sell," says Don Detore, editor of Tire Business, a sibling publication of Automotive News.

Advisers also need to ask the customer questions about their budget, driving style and how long they plan to keep the car. General Motors, Ford Motor Co. and several other automakers, along with many large tire manufacturers, offer tire sales training.

Dealer Tire not only offers extensive training classes for service advisers, but Hebron says the company's field representatives visit dealerships to help train service personnel and refine sales processes.

"We know there is no correlation between selling more tires and selling less expensive tires," says Hebron.

"It is about understanding the consumer, offering them options and making them feel comfortable with their decision."

Success, the company says, is when a service adviser can sell a set of tires as easily as an oil change.

"That means they are educated and comfortable around the offering to the consumer," Hebron says. "A set of tires is probably the most expensive thing the consumer will spend money on."