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We discovered stunning new information on the dealership tire sales environment in SimpSocial’s recently published 2023 Dealership Service Retention Report. According to our research, there is a serious knowledge gap among consumers, with almost one-third of them not even knowing whether their dealership even sells tires.
Due to this ignorance, dealerships are losing out on significant business opportunities as potential repeat customers go to other companies for their tire needs.
Why are tires a focus?
As a result of problems like improvements in vehicle technology and longer service intervals, profits from conventional services like oil changes have been dropping for years. An oil change is more than just a chance to make a sale; it’s also a chance to promote additional, more lucrative services. Therefore, fewer oil changes result in lower service earnings overall and reduced client retention.
Sales of tires have been a significant remedy for this. Although tires don’t often have high-profit margins at dealerships, they are a significant driver turnoff. You might never see a car owner again if they start getting their tires replaced at a repair shop (or Walmart). They have the opportunity to switch to that other store if it offers a superior experience or lower prices.
Meanwhile. Your service representatives have the opportunity to spot minor concerns during each tire-related customer visit and provide a great, loyalty-boosting experience.
In other words, tires are important for long-term customer retention as well as the actual sale.
Tire services are crucial, but dealerships should push them more.
Tire sales at dealerships are frequently difficult. Customers who don’t even know they can buy tires from their dealership instead shop elsewhere, according to SimpSocial’s 2023 Dealership Service Retention Report.
Only 33% of car owners who have purchased tires for their current vehicle did so at a dealership for their last tire (or pair of tires).
Unbelievably, 29% of customers don’t even know if their dealership sells tires.
Even the “extremely loyal” customers are uncertain about whether their dealership sells tires, according to 24% of them.
Due to potential clients turning to other companies for their tire needs as a result of this lack of awareness, dealerships are losing out on business.
Big box shops are gradually gaining a sizable portion of the tire market, further aggravating the problem, by enticing customers with their aggressive pricing and marketing tactics. Dealerships are losing a sizable chunk of their customer base as a result of this change, further reducing their revenues.
How can dealerships increase the number of consumers for tire services before the major players make it even more difficult?
With smarter marketing, raise awareness of tire services.
A small customer base for tire care shouldn’t be a major concern because 63% of car owners prefer to have their dealership do tire rotations and repairs. In other words, boosting awareness can be all it takes to attract more clients to your dealership.
One way is to market tire services more strategically. You can access a valuable market by raising awareness of the tire services offered by your business. According to our research, you might see up to 10% more of your overall customer base buying tires if all of your dealership’s consumers knew you sold tires.
Say, for example, that you have 100 clients, and 50 of them purchase tires from you. When your customers are all aware you sell tires, that number can grow to 60 (50 plus 10 percent of 100), which in this example amounts to a 20% increase in the number of tire service customers.
So, how do you begin?
Expanded Promotion of Tire Services: Begin with the fundamentals, updating store signs, your website, and social media accounts while letting clients know about your tire services.
Remind clients about your tire services by using direct marketing strategies like email newsletters, mailers, and text messaging. Customers of dealerships are increasingly preferring to obtain information from texts in particular.
Tire Value-Added Services: Provide tire value-added services. Customers value these services more than other conveniences, according to our report. Think about including value-added services like the free tire protection against road hazards that is part of the SimpSocial Renewable Benefits. Customers find these services to be very enticing and manageable.
For dealerships attempting to maintain their competitiveness in tire service, using value-added services like these has proven to be extremely advantageous. SimpSocial even assisted a Parts and Service Director at Kastner Honda in selling more tires at three different locations.
Make sure to emphasize your competitive advantages over the competition in your messaging. This could include your specialized knowledge, personalized service, high-quality products, or the convenience of getting all car services in one place.
Profits from this change could increase dramatically and counteract the reduction in other services. Therefore, it’s crucial to communicate clearly about your tire services, from the initial sale and at each relevant point afterward. By doing so, you can ensure customers turn to your dealership for their tire needs, driving up sales and bolstering your bottom line.
This not only provides an opportunity for increased profits but also ensures customer retention by offering a comprehensive, one-stop service.
Get the latest data on service customer preferences
The better you understand your service customers, the more you’re able to give them what they want and keep them coming back. That’s why we surveyed nearly 1,500 vehicle owners who rely on dealership service departments for a portion of their vehicle’s upkeep and repair and published the results in our 2023 Dealership Service Retention Report.
This report provides a deep dive into customer preferences, from tire services to reasons for customer defection. Other key findings include the relative importance of quality, price, and service appointment availability in customers’ choice of service provider. From evolving communication preferences (both during and between services) to what people of each age group prefer, you’ll learn how to better serve your customers and keep them coming back.
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