If I could show you a way to significantly improve your gross profit dollars sold per repair order, Increase customer loyalty and return visits for each customer, add a tool for recruiting young talent AND improve the customer satisfaction of your clients, would you be interested?
Of course, your answer is going to be yes, so let me ask one more question: would you consider featuring or selling tires at your shop? Now you might not feel so sure about your answer.
As I’ve crisscrossed North America training, coaching, and attending events with shop owners just like you, I regularly ask that question during the session. I usually hear the same objections: “I don’t have room or the equipment; I don’t want my best tech mounting tires; I don’t want to carry the inventory; I don’t want to either sell the used tires or have the old ones hanging around.”
In almost all cases, shop owners and advisors have this fear: “I can’t compete with the big tire chains on price.” But do customers only buy on price? Have you really thought through each of your objections and weighed the pros, cons and solutions about tire sales? I would suggest there is a case to be made for you to start or refocus on one of the most impactful categories of service you could add to your shop.
‘I can’t compete on price.’
All tires in the U.S. are graded for wear. The U.S. Department of Transportation (DOT) National Highway Traffic Safety Administration’s (NHTSA) Uniform Tire Quality Grade Standards (UTQG) were created to give consumers useful information to help them purchase tires based on their treadwear, traction and temperature capabilities.
The higher the grading on treadwear, traction and temperature, the higher the price. You’ll probably notice that tires listed in promotional materials are typically a lower rating. In many cases, the advertisement is just designed to get the customer to call for an appointment. Once in the store, they’ll likely be offered a better tire for, of course, a higher price.
There are several online tire suppliers from which you can grab more in-depth detail and I suggest you spend a few minutes reading up on UTOG ratings to help you understand the nuances of the system.
But, when you compare like for like, you will find that you can get pretty close, relevant to price.
Time vs. Money
While price can be a factor to many consumers, in almost all cases, your prime customers value their time more than money. Yes, it is important, but realizing that a trip to the tire store can easily cost them several hours and additional inconvenience will play a role in their buying decision too.
When properly presented with the option of having the tires installed at your shop for a few bucks more instead of taking it to another vendor, your chances of customer approval are pretty high.
According to Don Vanderheyden, Vice President, Commercial, Hennessy Industries, 80 percent of customers state they would “likely” purchase tires from their shop of choice if they sold them.
The point here is, once you present the recommendation for tire replacement you have an eight out of ten chance to install a new set of tires.
The gift that keeps on giving
Once you include tires in your sales mix and your customers know they can rely on you and your team of professionals for tires, you will see their vehicles more often. Depending on the market, your customer may need a new set of tires every two to three years. In Houston, we see some cars that clock 30,000 miles per year – some of our customers were installing a new set every two years! In addition, don’t forget the more frequent need for rotation, balancing and alignment. These services will increase the frequency of visits to your shop.
Customer loyalty and risk
So let’s suppose you don’t sell tires. On your inspection report, the technician recommends tires due to wear. Your advisor conveys this to your customer who is advised that his car needs new rubber. What is your next step? Your customer needs tires and you have no control where they take the vehicle. They decide to take it to a tire store that will install a new set of tires. This tire seller ALSO performs general repairs. Now you run the risk that the other shop will peel YOUR customer away from you. You will never know, until it’s too late.
Major tire stores have been adding the highly profitable elements of general service like fluid services, brakes and shocks, steering away from the more complex, time-consuming technically demanding repairs.
Their business model is similar to fast food restaurants: the lower the skill and wages required to perform a given task, the higher their gross profit per employee and location.
A word about recruiting
There is no argument that recruiting for talent is one of the most difficult tasks you have today. Shop owners are looking for technicians that they can put in the bays right away with a minimum amount of supervision and guidance. Typically, we look for someone who has 3-5 years of experience. You are in good company – according to Indeed.com, for each technician actively seeking new employment, there are 17 shops who have openings, and in some regions of the U.S., the number of shops looking to hire a technician is 30. Wow, that is some stiff competition!
Scott Bickley, of Little Wolf Automotive in Waupaca, WI, uses quick service and tire installation at his shop as a recruiting tool. He has found a perfect way to engage younger job seekers who have entry-level skills. He puts them in a role that allows him to see if they have what he needs to be a top contributor at his shop. And at the same time, reduce the risk of a “bad” hire.
“It is a lot easier to hire a guy or gal that has little experience and put them into a revenue generating position in those roles versus hiring a seasoned technician,” Bickley says. “I’ll watch them as they perform these duties to see if they have the drive, desire and skills to move up in my shop.”
From my own experience, at my shop we were fully committed to tire sales and service. We did not carry any inventory – instead we had suppliers that made multiple deliveries to my shop each day.
We also were on a “Recommended Installer” program for the top online reseller of tires. Each week we received shipments and, in many cases, added new customers. We were the highest price listed of any installer, yet when they ordered their tires online, they selected my shop as the installer. The customers who came to our shop appreciated high quality more than low price.
For us it was great! We had many new customers who became aware of us as a result of their online purchases and we did not spend any money on marketing to acquire them.
While you don’t necessarily need to have state of the art equipment, it just needs to be up to date so you can service most of today’s vehicles.
Committing to selling or refocusing your shop on servicing tires, will add another income stream, fill your customer’s needs, open a door for recruiting entry-level talent and will add additional revenue to your bottom line.