Wheel Alignment & Tyre Sales – Increasing Dealership Revenue and Customer Satisfaction
What is the value of Wheel Alignment & Tyre sales to your dealership?
Most dealers would answer this in terms of revenue and margin from the sale. Some might say additional work found when replacing the tyres (Disc/Brake Pads, shock absorber, etc.), whilst others might say it includes customer retention and customer satisfaction.
All three answers are correct, but the fact is that most dealerships outsource tyre sales claiming “I don’t make any money on tyres !”
Given the surfeit of tyre specialists, tyres are an extremely competitive product and by themselves there is not much margin in them, unless dealerships value their benefits, namely upsell opportunities and the opportunity to enhance customer satisfaction.
Dealerships view tyre sales as an inconvenience that detracts from their favoured work – the comfort in the predictability of routine servicing. However, there is a captive upsell opportunity present on every service.
Is your Service Advisor incentivised to visually inspect the tyres for sidewall damage, uneven wear and minimum tread depth when carrying out the walk-around VHC with the customer ?
It is essential that dealerships supplement routine Services & Maintenance with an additional upsell opportunity. Wheel Alignment and Tyres are the logical and compatible choice. Tyres are the perfect upsell opportunity because they are safety critical and can be easily understood by the customer on the VHC walk-around. Especially when customers are reminded that an insurance claim could be declined due to unroadworthy tyres.
Although the dealership will not make much money on the tyre, there is a compulsory built-in high margin add- on service that comes naturally with every tyre sale, Wheel Alignment, which is an absolute and confirmed upsell.
Tyres and Wheel Alignment must be sold as a package. Dealerships should never offer free Wheel Alignment (the high margin operation) with a tyre sale. Dealerships need to regard tyre profitability in the same way they regard routine service profitability.
Depending on the vehicle model and tyre, potential tyre sales are available from 20,000Km onwards. Dealerships should set Service Advisor targets and incentives additionally based on the higher kilometre service intervals assigning a sale value on higher kilometre vehicles.
The advantage a dealership has over the Tyre Specialists is the convenience to the customer of replacing tyres during the vehicle service. Customers will pay a premium for convenience.
Approach tyre’s for their potential, the key to other work opportunities and customer retention. Whilst they are not high margin items your workshop profitability will be enhanced.
Contact Amatz Automotive for a comprehensive solution to your Dealership Development.
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