PROFITCENTER: FIXED OPERATIONS

More Auto Dealers Selling Tires

It's a customer-ioyaity effort that's gaining a lot of traction
By Wartl's Staff

T
ire sales might not gener-
ate as much profitability as
other dealership sales, but
experts agree they play a
vital role in customer-reten-
tion management.
It's the reason why more
and more deaierships are turning to tires,
says dealership management consultant
and Ward's columnist Lee Harkins.
"More than anything else, it gives the
customer no reason to go anywhere else
[han the dealership." he says. "Dealerships
are getting in there and slugging it out
with the tire stores and doing a dam good
job. hi a lot of cases, theyVe winning."
Dennis Gillaspie. parts manager at Burt
Buick Pontiac GMC Truck, Inc. in Littleton.
CO., says his department started selling
tires in September.
"We wanted to keep everything in the
dealership, instead of sending customers
out." says Gillaspie. who stocks Michehn
not be considered an opportunity to go
out there and start squeezing them to buy
stuff they don't need."
Thom Peebles, director of sales-North
American Car Dealer Channel at Michelin
North America, says as more dealerships
turn to tires, their business is becoming "a
very key channel for growth in our indus-
try and our organization in particular."
"We look at it as long-term productiv-
ity," Peebles says. "What weVe found in
most cases is when tires are purchased
they're purchased with other parts and
services. We think tires are a very impor-
tant part of building that very important
point of loyalty to the dealer.
"If you're able to make that a 1-stop
shop, you're conditioning the consumer
to come back for other maintenance-
type items."
Scott Jackson, fixed operations manager
at Peterson Autoplex in Boise. ID, believes
there are advantages for his customers
storage woes.
"You can stock some tires just to let
everyone know you're in the tire business,
but the manufacturers can get the tires
tliere quickly." he says. "Within hours, in
some cases, or the next day.
I would stock the tires that are the
most popular, and I would stodc a couple
different grades of them." Harkins adds.
"Go to the manufactujers and get the sales
history."
Harkins also suggests dealers give cus-
tomers tlie option of three tire brands.
"Thegood, better. bestapproach,"liesays.
"Unless they come in and ask for a specific
name hrand."
A good product and the simplicity of
saving a customer a special trip are the key
ingredients to creating customer loyalty,
says Peebles. "It will reflect well not only
on the dealer but on the product as well,"
he says. • Tires make a great
CRM tool.

and Firestone brands. "We had been
doing tires from an independent tire shop
down the street, and we are now just as
competitive as he is."
Although exact numbers are not avail-
able, Gillaspie estimates they he more than
90 tires for the month of May.
However, Harkins says dealerships can
get in trouble when they try to make too
much money on tire sales.
"A lot of them don't understand it's not
about the tires, it's about keeping custom-
ers." he says. "I'm not saying give the tires
away - make S5 or $10 a tire - but it's
all the other things that come along with
the tires."
Things such as ball joints, brakes, tire
rod ends, wheel bearings and realign-
ments could he the result of a tire sale.
"You have the car on the lift and you
can look it over and recommend any
needed business." Harkins says. "And the
key word is 'needed' business. It should
buying tires from his store, A key selling
point is safety.
"People at the dealership have a much
higher level of training in a lot of areas
vs. some of the tire stores that hire tiigh
school kids," Jackson says. "I really think
the risk is not as great at a dealersliip "
John Ballard, service advisor fo:
Van Chevrdet of (Tarrollton. TX. say^
his department competes with most
prices from their largest competitor.
Discount Tire. The dealership decided
to sell tires IS years ago to "make it a
I-stop shop." Van Chevrolet carries 20
difFerent brands of tires.
"The only danger would be the
cost of inventory, and that's not really
a danger It's more of an expense." hf
says. "When you huy 100 tires ami
have them waiting for people to come
in and buy, it's expensive to have that
merchandise just sit."
Harkins says there's a simple solution to

60 WARD'S DealerBusiness September 2007