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Bill Springer

Bill Springer President

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New Data: Even Loyal Service Customers Buy Tires Elsewhere

It's widely known that dealerships still have a lot of ground to make up when it comes to selling tires. According to Modern Tire Dealer, auto dealerships still handle just under 10% of the total tire market as of 2019.

But what about the customers that are already coming to you for vehicle maintenance? Surely they are buying tires from your dealership, right?

Well, yes and no.

According to our recently released 2020 Dealership Service Retention Report, auto dealership service customers do buy tires from their dealership. But not nearly as many as you might think.

How Many Dealership Service Customers Buy Tires at the Dealership?

In our survey of nearly 2,000 dealership service customers, only 31% purchased their last set of tires from the dealership. This means that less than a third of the customers coming to your dealership for service will come to you for tires too. Even for customers who stated that they were “extremely loyal” to their servicing dealership, less than half (48%) purchased their last set of tires there.

Why aren’t more of them buying tires from the dealership?

One answer may be that they don’t even know their dealership sells tires. Nearly a quarter (24%) of the people we surveyed selected “I’m not sure” when asked if their dealership sold tires. For those extremely loyal customers, that number fell only a few points to 20%.

Pie chart indicating 24% of respondents selected “I’m not sure” when asked if their dealership sold tires

 

If 20% of a dealership’s most loyal service customers don’t even know if they can buy tires from the dealership, it’s no wonder why so many aren’t buying their tires there.

Where Are Dealership Service Customers Buying Tires?

You may be wondering, for customers who aren’t buying tires from the dealership, where are they going instead?

According to our survey, they’re overwhelmingly going to tire stores (59%). Big-box retailers such as Costco and Sam’s Club also enjoy a decent portion of the market at 20%.

Bar graph illustrating where service customers made their last tire purchase

With such a large percentage of your existing customer base not buying from you, tires represent one of the most significant opportunities to grow your fixed operations. Let’s face it, you have much more to offer your customers than the competition.

The question is: What can you do to make sure your customers know this too?

Here’s what we think.

What Dealerships Can Do to Earn More Tire Business

Every time a customer takes their vehicle somewhere else for tires, you lose business. First, you lose the initial revenue from the tire sale. Second, you lose the opportunity to earn repeat or add-on business.

Don’t let them get away!

Talk About Tires and Tire Services More

If your customers don’t know you sell tires they won’t come to you when they need them. So, at the very minimum, we recommend you start talking about them more.

Here are a few ways to do that:

  1. 1. Tell your customers about your tire offerings and their warranty coverage at the sales-to-service handoff. This is a key action in building loyal customers. Because, as you know, getting a vehicle owner into your service department for their first service visit makes them more likely to continue coming to you for all their vehicle’s needs.

    Download this checklist to learn about other best practices for this critical point in the car buying experience.
     
  2. 2. Remind your customers of the recommended service schedule for tires. With extended recommendations for oil change frequency, tire rotations may now be your best opportunity to see your customers more often.
     
  3. 3. Add them to a digital reminder campaign. We recommend sending emails, or text messages to your customers (a method that was verified to be preferred in our survey) to remind them to have their tires rotated. You could also add seasonal reminders like putting on snow tires once the temperature drops consistently below 45°F.

  4. 4. Setup a geofencing campaign that targets your nearest tire competitors. Using this approach to catch customers at the right place at the right time keeps your dealership top-of-mind when your customers’ buying intent is highest — for example, when they’re on the property of a competitor.

If you’re successful in getting your message out, you’ll begin to make your dealership the place your customers think of when they need tire services. But, if you really want to be successful, we recommend finding ways to truly differentiate your dealership from the competition with a reason to return.  

Introduce Value-Added Services Focused on Tires

Programs like DriveSure, which offers a renewable set of benefits included with oil changes and scheduled maintenance services, help dealerships drive more tire business with perks including:

  • Road hazard protection:
    Free tire replacement or repair of damage due to road conditions or debris.
     
  • Roadside assistance:
    Complimentary tows to their dealership and not the competitors’.


When customers run into trouble, these kinds of programs make it convenient and easy to come back to their dealership for help.

This approach has worked incredibly well for the Parts and Service Director at Kastner Honda. He’s leveraged DriveSure to sell more tires at three separate dealerships: read his story.

____________________

If you’re serious about gaining traction in the tire market, customers have to think of you when they think of tires. Remind them of your tire offerings often and make it easy for them to come back when they’re in need.

For more customer insights and tips for getting customers to return to your dealership, download a copy of our full 2020 Dealership Service Retention Report here.

Bart Wilson

This is some sobering data Bill. Thanks for sharing.

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