Interview With Cooper Tire’s Bill Hoban (by Jeff Short)

Recently I was speaking with Bill Hoban about Cooper’s Roadmaster lineScreen Shot 2015-07-29 at 11.22.31 AM and the commercial truck tire market in general. Bill was giving me so much information that I had to ask him if he’d like to sit down for an interview so that all of our customers could hear what he has to say. Bill is Cooper’s National Truck Tire Sales Manager. He has been with Cooper for 20 years and before that, Michelin (where I first met him) for 11 years.

JS: Bill, I’ll start with the classic question. How are sales?

BH: 2015 sales are good, but we have plans for an even stronger second half. The new products that launched in last 6-8 months are proving themselves. Customers are starting to realize how good the products are and how well they are performing. And I really think that’s going to drive business from the Tier 1 and Tier 2 brands. Tier 1 being Michelin, Bridgestone, Goodyear, and Continental and Tier 2 being Yokohama, Toyo, Firestone. We offer a tire with a Tier 3 price point and Tier 1 and Tier 2 performance.

JS: On the whole “tier” subject. I hear some people say Roadmasters are made in China, therefore they are the same as other Chinese tires. How do you reply when someone says that to you?

BH: I tell them yes, they are made in China, but they are made to very strict standards that our U.S. engineers require.

they are made to very strict standards that our U.S. engineers require.

Roadmasters are manufactured on new, first class equipment, under the same standards as if they were built in U.S. Every Roadmaster tire is uniformity tested and X-rayed before the tires are released. That is something that a lot of other manufacturers do not do. It takes more money and time, but it really makes a difference.

JS: Have you heard that some of your competitors just use one compound for all their truck tires?

BH: I have heard that, and I think in many cases, it’s true. It’s one of the reasons that they can come to market with such a low price point. We use 4 or 5 compounds depending on the application. These different compounds include a cut and chip resistant compound, a SmartWay compound for fuel efficiency, a line haul compound for long distance over the road applications, and a regional compound to withstand harsh twisting and turning environments. We are constantly working with compounds as technology improves and we will tweak and modify those compounds if we think it’s going to lead to a better performing product.

JS: Your tires say, “Roadmaster Engineered by Cooper” on the sidewall. What does that mean to a dealer as opposed to selling a tire with a more exotic name?

Screen Shot 2015-07-29 at 1.47.27 PMBH: I think the Roadmaster name is being established more & more in the market place. We have O.E. contracts with large trailer manufacturers and a fantastic loyal dealer network to back up the products. And let’s not forget the Cooper name. It does carry a lot of weight. We celebrated our 100 year anniversary last year in North America and having been in business for 100 years, many people know our brand, quality and products.

JS: The tire sidewall says “Engineered by Cooper Tire.” Explain how that works. Some people might think that the tire is designed in China.

BH: Good question. The Chinese brands we compete against are designed and engineered in China. Roadmasters are 100% designed and engineered in the U.S. for American roads. We have some very sharp engineers in Findlay Ohio, many with PHDs, that are designing the construction of the tire, the compounding, the tread design, everything is designed here and that really makes a difference. We also have higher speeds and heavier loads than most countries.

JS: Do you have test tracks or run on public highways? How do you know your tire is good on an American road?

BH: When we produce a new tire, it has to undergo thousands and in some cases millions of miles of testing with various fleets in the U.S. We use Ryder trucks that haul Cooper Tires from warehouse to warehouse. Those vehicles run 15,000 miles per month. We also use fleets down south where the temperatures are hotter. We want to represent the whole country. We have fleets in California, the Northeast, and the Southeast. We find fleets that fit our requirements, place the tires and track them to see how well they run.

JS: I saw a news article that showed a concrete pad that you were using to torture test your trailer tires.

BH: Yes. That was for our new 255/70R22.5 RM272. Many times they’re put on a spread axle flatbed application, where the front axle is scrubbed sideways. It’s a tough application. We wanted to design a new tire to perform better. The only way to replicate that application was to tear up some concrete and re-pour it to the standards that we wanted. Basically we were going after a bridge decking type surface. That’s a very abrasive surface. We ran many tests with various tires and compounds and we’re able to come up with a package that we think is going to perform very well. That is the extent that our engineers are willing to go to, to ensure that we build a tire that we are proud of and will earn the right to have the Roadmaster and Cooper names on the sidewall. (To see the news article click HERE)

JS: You have several new products, the RM234 and the RM852. Please describe them and tell us how they are performing.

BH:

Keep in mind, when we design tires, we are benchmarking against Tier 1 brands. That’s the performance level that we aim for. Other manufacturers have a Tier 1, Tier 2 and a Tier 3 lineup. They don’t want their Tier 3 tire to perform at Tier 1 or Tier 2 levels, because that would take business away from their premium lines.

Yes, they’re our new premium products that we have launched in the last year or so. The RM234 is our regional 22.5/32nds deep, all position tire, primarily designed for steer, but I also have customers placing them on trailers and they are performing very well.Keep in mind, when we design tires, we are benchmarking against Tier 1 brands. That’s the performance level that we aim for. Other manufacturers have a Tier 1, Tier 2 and a Tier 3 lineup. They don’t want their Tier 3 tire to perform at Tier 1 or Tier 2 levels, because that would take business away from their premium lines. The RM234 also has a wider tread design than the RM185, which makes a big difference. Between the new tread depth, the wider tread width and new compounding, we know we have a great tire that performs extremely well. The RM852 is a 30/32nd deep, closed shoulder drive tire. It’s also a very wide design with new compounding. On all of our fleet tests in line haul applications, the tire is performing well for over 300,000 miles. In regional applications it’s also performing extremely well, beating some Tier 1 and Tier 2 brands.

JS: Do you have any other new products coming out?

BH: Yes. We currently have the RM230WB. In some applications it’s a little too aggressive. We’ve listened to dealers concerns, so we have a new wide base tire we are launching in early Q1 of 2016 – it’s going to be more of a ribbed design which is where the market has shifted. They are currently being tested, and the results are very positive. We are also launching next month, a new 315/80R22.5 RM230WH (waste hauler), we have tested this tire extensively, in various sanitation and dump truck fleets. The tire has 24/32nds and it’s a very wide tire (requires a 280mm cap), which is what the Tier 1 brands offer. One fleet in California liked the tire so much they have started to buy nothing but the RM230WH. They are the first fleet to get our new production. They were running Bridgestone and Continental, but have decided to go exclusively with the RM230WH.

JS: How are retreaders doing with the Roadmaster line?

BH: The Roadmaster casing is very solid. We have 4 full width steel belts that protect all the grooves on the tires. To illustrate our confidence in our tires, we have an industry leading casing warranty.

This is very aggressive and shows our confidence in our products. We are in line with the Tier 1 and Tier 2 manufacturers warranty programs.

We offer a 6 year warranty for the popular lines. If they don’t cap the first time, we have a $90 casing allowance. If they don’t cap the second time, there is a $60 casing allowance. This is very aggressive and shows our confidence in our products. We are in line with the Tier 1 and Tier 2 manufacturers warranty programs.

JS: What are you seeing with pricing on truck tires? Are low-end tires driving pricing down in the market?

BH: We have seen that. There are many more Chinese brands entering the U.S. market. I just looked at the U.S. SmartWay website this morning. There are now 193 Chinese brands listed. 2 years ago there were only 25. We are differentiating Roadmaster from those brands with our technology and compounding.

JS: It sounds like we’ll be stocking even more tires than ever before. Roadmaster is a good size line. How does it compare to your competitors when it comes to market coverage?

BH: We now offer over 80 SKU’s in our lineup and cover all standard truck applications. We produce on/off road, SmartWay, regional, we have the 17.5 sizes, 19.5 sizes, and we’re looking at some other new sizes. Right now we’re working on a 445/50R22.5, which is the tire that replaces the duals on tractors and some straight trucks. We are going to continue to build and offer what our customers demand and need. That is what sets us apart from our competitors that have a limited SKU offering. A one stop shop is what Roadmaster has to offer.

Something else we are very proud of is Tire Review’s survey of 2000 commercial dealers last fall. They asked these dealers to rate 16 commercial tire brands. Roadmaster finished in the top 2 or 3 places in many categories. The one we were most proud of was on overall quality. Roadmaster was ranked third after Bridgestone & Michelin. We finished ahead of Goodyear, Yokohama and Continental.

That summarizes a lot of what I’ve said today. Roadmaster is establishing a name based on quality and performance and customers appreciate our value. You always have to start somewhere. Bridgestone started 40 years ago without much of a name and look where they are now. Roadmaster is still in its infancy, but we’ve got a strong tailwind behind us because we have such a great product at a great price point.

JS: Thank you for taking the time to bring us up to date.

BH: I’d like to say a special Thank You to all of your dealers for making us successful. We couldn’t do it without them.

Why You Are Better Than A Website (by Jeff Short)

Supposedly everyone wants to sell their tires “online.” Not just have a website, but a site that will allow retail customers to select a tire for their vehicle, get a price, and fork over their credit card and close the deal. All while you’re comfortably at home watching American Ninja Warrior. Sounds like a lot to ask of a website? But Mom, all the cool kids are doing it! Goodyear is on it, Tire Rack is the leader of the pack, and all the chains are going after this huge slice of the market. I wonder…

Picture this: It’s a normal business day and you’re at work. The phone rings or a customer drops by. They ask the usual, “I need a price on some tires.”

If you’re like me, the gears automatically start turning in your head. You’ve done this thousands of times. You know the drill. What kind of car do you have? Let me look up the size, load range, and speed rating, or better yet, check the door jam for that little placard. Let’s see this car. What do the old tires look like? How did they wear? Any alignment issues? Were the old tires rotated? Did you like them? How do you use this car? Are you keeping it? How many miles a year do you put on the car? If it’s an SUV or light truck, how aggressive a tread design are you looking for? Up north… do you run winter tires also? Let’s talk about your budget. Is there a rebate that will make this decision easier? And since I’m not a highly practiced retail guy, I’m surely missing some of the other questions that you ask. And of course you are intimately familiar with how your go-to lines actually perform in the real world.

So, I guess we all agree, the proper way to prescribe the right tire fitment is through all the questions that you ask the customer. Each answer the customer gives you will naturally push you towards a certain recommendation. Oops forgot, those super websites that will sell you a tire don’t ask hardly any of these questions. How do they gain a customer’s trust? Well, I guess Tire Rack does it because they are known as The Source. Plus they have thousands of customer generated reviews and a massive advertising budget to drive people to their site. And let’s not forget a highly skilled phone crew to actually make a real live recommendation. Just like you do.

Yesterday I was reading my latest issue of Tire Business. The front page story is about a company that can add a feature to your website that will allow retail customers to see your inventory (or your distributor’s inventory), get a price quote, and process their credit card. Just like that. Their tool will display all the available sizes and sort them by price. Maybe it’s just me, but I think there is so much more to this business than sizes and prices. How much real business is out there that will support online tire buying? Goodyear rolled out their new system in the Chicago area first. A Modern Tire Dealer reporter interviewed 6 Chicago area Goodyear dealers to see how the new online program was working. According to the article, 4 of those questioned had not seen any sales yet. One dealer that operates 4 stores said he had installed 2 sets. Don’t forget, this is Goodyear.com with all their advertising dollars at work to pull customers onto their site. If you’re a regular tire retailer and you’re selling tires online without a phone call, I’d love to hear your story and pass it on. In the meantime, let’s listen to Mom, take a deep breath and see how this whole thing plays out.

Saying “Yes” (by Jeff Short)

Several months ago, I began an interesting conversation with Hankook’s Kevin Hyatt about the importance of retailers stocking tires. Kevin is sort of double qualified on this topic. At the time Kevin was Regional Director of the Northeast. Since then, Kevin has been promoted to Director of Corporate Accounts for Hankook. That means Kevin is in an entirely new part of the tire world. He’s responsible for handling his company’s business with outfits like Ford Motor Company, ATD, Discount Tire, and The Tire Rack among others. This change has only made Kevin more aware of the importance of supply, as I found out this morning when we continued our conversation about what can contribute to a dealer’s success.

Over the years, Kevin has noticed that the dealers who are committed to investing in inventory are the ones consistently showing real sales growth. They simply have more opportunity to say “yes” to customers that want to buy tires now.

Kevin explained that studies have shown that over 75% of consumers will buy new tires from the first person that recommends them. Of course many of our dealers already know this and are completely on top of their inventories and make sure that they are working for them. For others, it’s tempting to just throw your arms up and say, “There are too many sizes and I’ll never have the right ones in stock.” The good news is that while there are too many to have them all, good data can show you which tires have the best chance of selling regularly.

Kevin said that while Hankook offers 600 to 700 items, a realistic goal would be for a dealer to stock the tires that cover 80% of Hankook’s sales in their particular area. This isn’t 80% of 600. The 80/20 rule holds that 80% of Hankook’s sales come from only 20% of their offering. He thinks that the key to this is for dealers to partner with a distributor that stocks the line in depth and one that can share valuable data on what sells the best. I’ll give you a recent example: A dealer in Vermont says that he has room for 60 tires and he wants to stock Hankooks. We compiled data on tires sold from our Vermont sales history and added in Hankook’s statistics. We came up with the best 15 sellers that surprisingly cover 21.8% of Hankook sales in that area. 4 of each gave our customer the best 60 tire Hankook inventory possible.

If a dealer tells us what brand he’d like to sell and how many he has room for, we can crank out the best combination. This is a numbers game. We have seen a sweet spot with around 300 tires giving a lot of bang for the buck. Even then the job is not over. The dealer and the distributor will need to work together to ensure that the inventory continues to sell. Of course, we at K&W have a vested interest in seeing our dealers sell more tires as well. We are fortunate that we have access to important data that allows us to assist dealers in building an inventory that gives them the best chance for success. If you would like to discuss your inventory needs, we are here to help.

Credit Card Scam Update: Another Real Life Example (by Jeff Short)

Sometimes timing is everything.  I just received a nice thank you email from one of our customers.  He is giving credit to our May 19th credit card scam alert blog post for saving him from losing $3,200 to a phone-calling crook.

Doug Bouder of S-N-D Tire, Chambersburg PA received a call from someone asking him if he sold tires over the phone and would accept payment with a credit card.  Doug said that he could do this.  The caller then asked him to text pictures and pricing to him.  He started with one size, but that quickly led to a request of 4 to 5 sets.  When the caller mentioned that he would pick up the tires, something clicked in Doug’s mind.  He remembered our scam alert email.  Doug called a friend at another nearby shop who said they had actually been stung twice with the same scam.  Over the course of several phone calls, Doug noticed the phone numbers kept changing.  The first was a Maryland number, then Ohio, and the last call was using a Las Vegas number.  Doug reached out to his bank, who also cautioned against proceeding.

Doug said, “It’s amazing.  I read your email and then within 2 weeks I have one of these guys trying to scam me.  Thanks for saving me $3,200.  That’s real money for a guy like me.”

I thanked Doug for letting us know and giving me permission to share his story in the hope of helping more of our customers.  If you have had something like this happen to you, please let me know.

Avoiding Credit Card Scam/Fraud (by Jeff Short)

This isn’t really news to anyone. Low-lifes call businesses and pull scams. They use the relative safety of hiding behind a telephone to do their dirty work. Often the weapon of choice is stolen credit card information. Obviously, day in and day out you process cards with hardly a thought and then one day you get surprised. The bad news is that even when you run a credit card, or key in the account info and you get an “approved” message and an approval code, you can still be left holding the bag for the entire transaction amount, if the card later turns out to be stolen. The good news is that by following some procedures you can protect yourself. We reached out to our bank and they were nice enough to come in for a meeting where they laid out some processes and procedures that were new to us. You should know that the banks consider “card present” and “card not present” to be two totally different scenarios. With card not present you are at much greater risk of a chargeback if the card is reported stolen. With card present you are still at risk and you should be following a checklist. One point that was stressed by the bank reps: If one of your transactions involves something out of the ordinary for your normal day to day business and the credit card turns out to be stolen, you will be held to stricter standards. In other words, if your normal transactions consist of billing customers for sets of tires and run of the mill auto services and then one day you run a charge through the system for 6 sets of 20” tires for a guy from Toledo, who’s not at your shop, the bank’s not going to show you much compassion if the card is reported stolen a few weeks later.

Please click HERE to read our bank’s recommendations. Please don’t take them as the final word. You should talk to your bank to see what they say. And finally, I’m including the guidelines we have provided to our employees.

New Brands: 6 Month Update (by Jeff Short)

It’s been a little over 6 months since we announced the additions of Hankook, Toyo, and Yokohama to our lineup. The K&W crew has been busy learning all about our new brands. Thinking about how they compliment our existing line up and what new opportunities they might have for our customers. Initially it’s intimidating when you look at a catalog with so many different types of tires, but after a little while you learn the key lines. We thought it would be helpful to share some our findings with you.

Hankook

Hankook sales are tracking like a rocket. Straight up. There seems to be an incredible amount of raw market demand for their products.

Currently we see the following lines leading the way in passenger tires:

* Optimo H724 (broadline 70,000 mile S and T-rated)

* Optimo H426 (luxury H and V-rated all season touring, 60K warranty)

* Optimo H727 (Hankook’s flagship 100,000 mile T-rated touring line)

For light truck and SUV:

* AT-M leads the field. Consumer Reports call this the best deal going in an all-terrain tire.

* Next is their H/T line that goes by RH-12. Hankook also offers a special CUV line called the HP2.

Toyo

With Toyo we’ve seen very strong sales of their Extensa tires. Extensa is Toyo’s entry-level line that performs with other brand’s premium offerings. Toyo recently adjusted their pricing on Extensas and we saw our sales double during the second half of March. As of last week, our data shows that we have 70 dealers buying Toyo products.

Interesting Toyo Case Study With Our Customer

I’d like to give you an example of what one of those dealers is doing with the brand. Craig sells several brands, one of which is Cooper. At the beginning of the year, Craig decided that he wanted to try his hand at promoting Toyo, but only if there was something in it for him. That “something” included making a better margin. Craig decided to increase his standard profit per tire by an extra $15 for every Toyo that he sold. He said, “I’ll be your guinea pig and let you know if this works.” Today I called Craig for an update. I let him know that he had purchased 116 Toyos year to date. I asked him if he had to deviate from his pricing plan. He just laughed and said, “No way.” Then he told me how much it meant to him that K&W’s marketing support team had made him custom Toyo brochures that feature his name and logo. Craig said, “My customers are impressed. They tell me how professional they make me look. It’s like I have the resources of a chain store.” So 116 tires at an extra $15 each, is $1,740 in extra profit for the first quarter. Figure in the rest of the year and he’ll make an easy extra 8 to $10,000 in profit.  And, one more thing you should know… Craig’s Cooper sales are up 55% this year.

Yokohama

Yokohamas continue to sell well throughout our regions. The standout bestsellers are the Avid Ascend and Avid Envigor lines. The Ascend is Yokohama’s best touring tire. The Envigor line occupies what Yokohama calls a “Grand Performance” category. That means all-season, high performance, low rolling resistance, and long tread life.

Avid Ascends, Avid Envigors, Geolandar G055s, and Geolandar G056s. If you know these 4 lines, you are off to a running start with the Yokohama brand.

Cooper

Those familiar with K&W know this is our bread and butter brand. Though we have many years of experience with Cooper and aren’t learning from scratch about the lines like we are our new brands, we still see interesting trends and transitions. Here are some:

* The Discoverer SRX is really taking off and looks to be the perfect replacement for the CTS

* Discoverer S/T MAXX sales have doubled since last year, of course all the new sizes help

* CS5 sales are strong—The transition from the CS4 was a little rocky for some dealers, (always touch and go when replacing a “best seller”) but things smoothed out once we got a handle on the mounting issue. Click here for more on mounting CS5s: CS5 Mounting Update

If you are new to K&W, Cooper is our “go-to” brand. For a quick initiation, check out the CS3 and CS5 for passenger cars and for light trucks check out the Discoverer SRX, H/T, and the AT3.

We hope this information is helpful and maybe gives you something to think about. If anything here strikes an interest and you’d like to know more, or if you just have some questions we are happy to help. Just say the word and we’ll help you think through the best options and opportunities.

Goodyear’s New Sales Plan-Is It Worth The Trouble? (by Jeff Short)

Goodyear is going to sell tires direct to consumers online. Their stated motivation is getting their market share of the 80 million “Millenials” who prefer to shop online. Let’s consider the implications for the tire industry and your independent shop.

This plan was unveiled at their January 2015 dealer meeting and involves participating dealers getting an installation fee and a commission for their services instead of actually making their normal markup on the sale.

As soon as I read this news a few things came to mind:

  1. This is big news
  2. If it sells tires, then Michelin and Bridgestone might not be far behind
  3. Some dealers are going to be upset.

So far, numbers 1 and 3 were dead on. I’m not writing this with any ill will towards Goodyear. I know a lot of people that have made a great living selling their products. I do know that this is a major step to take with the hope that they’ll get a piece of the online tire business, which in the US is only 6% of the market. According to Modern Tire Dealer magazine editor Bob Ulrich, that share hasn’t really increased much since 2008. (Maybe that’s because tires might not be the greatest thing to buy online. I get books, skateboards, and toasters, but tires are a little more complicated.)

And then you’ve got to go face the INSTALLER. You know, the guy that tells you that you really should have bought them from him and gotten a better price, different tire, saved the shipping expense, gotten the proper size/ load range/ speed rating and asks the ever popular “take yer ground beef to McDonalds too? So Goodyear is hoping that going directly after the online shopper is worth aggravating their dealers. But as Kyle Stock of Bloomberg News says, “…it’s not a riskless strategy. The Akron-based tire maker’s gambit could run roughshod over it’s best sales staff: the thousands of small businesses… that can easily nudge a customer from one manufacturer to another.”

From the comments I’ve heard and read, the nudging has commenced. Here are just a few examples: Bill Denvir, a tire dealer from Connecticut wrote a letter to Tire Business saying that over the past 10 years independent dealer’s market share has eroded from car dealer, big box store, and price club competition. He states that Goodyear’s plan would convert him from being a tire dealer to “simply be a convenient installation station for online retailers.” He further states, “The Denvir Tire Shop will no longer sell any Goodyear product.” It’s not just him. So far it’s been a negative with everyone I’ve spoken with. I asked Mark Pollard, who operates 3 Wilson Tire outlets in New England, for his thoughts. He said “2 thumbs down.” When I asked if I could quote him, he said “sure, but make it 3 thumbs down.” So who are the potential winners in all of this? My best guess is the “Tier 2” players. And not just Cooper, Hankook, Toyo, and Yokohama because we sell them. General, Conti, BFG, and Firestone might be where dealers turn. I know the reps that supply us with our brands all tout PROFITABILITY as the number one reason why a dealer should consider them. Time will tell if this all blows over, or becomes a turning point. Independent tire dealers, as the name implies, can be awfully independent. Smart manufacturers would be wise to remember this.

Can You Look at My Tires? (by Jeff Short)

That’s the question I hear from my friends and neighbors regularly, and I’m in the wholesale business. You must get it all day long. I wonder how you and your staff answer that question.

Do you just quote state law for fear that the customer will think anything else is you just trying to make a buck off them? What if there was a way to provide your customer with helpful information that will build their trust in you AND provide opportunity for replacing tires sooner than 2/32nds (the law in 42 states)?

Many reliable sources say that tires should be replaced before that state requirement. Consumer Reports magazine stated that their tests indicate tires should be replaced at 4/32nds. The difference in wet braking tests was huge. Independent tests conducted by The Tire Rack confirm these findings.

So, how do you use that information? In a day when many of your customers research these types of questions online, you can offer them this information. Two of the most trusted sources recommend earlier replacement. By sharing this info, you show your familiarity with the online sources they are reading. You show your expertise in a way that doesn’t make a hard sell, but gives them trusted information to make their own choice based on safety and expert recommendation. Many will probably still say, “What would you do?” People will not be surprised when you suggest that tires should be replaced before they are “illegal.”

In conversation with our dealers, I found that some are using a 2,4,6 recommendation. They state that tires are legally worn out at 2/32nds, but should be replaced at 4/32nds for proper wet traction. Below 6/32nds the tires are ineffective in the snow…. “will you be driving this vehicle in the snow?”

What is your policy? Is someone inspecting every vehicle that enters your shop for service? You have to be prepared that if you do not recommend replacement when warranted, the next shop might.  I think many independent dealers want to do the right thing by their customers, so they tend to want to let them slide by (no pun intended) until fall or the summer vacation trip instead of just coming out and saying it’s time for new ones. I’m sure the chain stores have a checklist and someone is asking for the sale.  So here is a way to take it off of you.  Just say, “You have a little to go before they are illegal but Consumer Reports and Tire Rack say they should go at 4/32nds of an inch, so let’s do the right thing and get them off.”

Don’t Hold A Grudge (by Jeff Short)

What exactly is a grudge purchase? The dictionary defines grudge as “resentfully unwilling to give something.” In our case, someone is resentfully unwilling to give their hard earned cash for some smelly black rubber things that the guy at the shop says need to be replaced. A new Xbox, Coach purse, vacation, smart phone? Now for those they are willing to shell out some bucks, but not tires. Of course, there are exceptions. There is the sports car driver that wants the latest from Yokohama or the guy with the raised 4X4 who is happy to spend big on the new wheels and Toyo Open Country RTs. But they are just a slice of the tire buying public. So yes, most tires are purchased grudgingly. You should know that marketing professionals actually study how to better sell grudge purchases. There are actually easy to follow steps that will help you sell more tires, and here’s the kicker… you can sell better tires and make more money.

Actual market research shows that the easiest sales are made by quoting only the lowest price goods. The customer asks for the product, and the salesperson quotes the cheap stuff and tells them “it will do just fine and look at how much you are saving.” This salesperson didn’t have to waste too much time qualifying needs or negotiating the price, let alone studying up on features and benefits. But it doesn’t have to be this way, if you and your crew followed a simple sales process.

Let’s start with Goodyear’s research that shows over 80% of tire shoppers buy whatever the salesperson suggests. It’s just human nature. When faced with having to make a decision on something you know nothing about, you tend to go with the advice of an expert. Just like, if your doctor says you need prescription ABC, you’ll most likely not argue for XYZ. Sure, your tire customer will go online and try to read up, but they’ll take your opinion if you say something like, “you don’t want that brand, they’ll shake your fillings loose.” You are the one with all the power. People are price sensitive. Especially over grudge purchases. But don’t forget that Michelin, Goodyear, Bridgestone, and a few other premium brands make up over half of the replacement tire market. There are huge opportunities for dealers to be making exceptional profit margins on tier 2 brands like Cooper, Hankook, Toyo, and Yokohama. You just need the discipline to have a process and stick to it.

Here are a couple steps to get you started:

1) Adopt a “go-to” brand and learn to sell it well. If it’s one of our brands, we are happy to help. You’ll get better and better at presenting it and your confidence will show.

2) Qualify the buyer to find out what they liked and hated about their old tires. This step will give you insight on what to suggest and which features to play up.

3)Quote the good stuff, and tell them why you’d put them on your car if you were them.

Don’t be thrown off when they say they’re “shopping on price.” What else do they know? They’re saying it to put you on notice that they want a good deal. It doesn’t mean that they want you to research 4 wholesalers websites to find the lowest priced, lowest quality tire known to man. It probably means something more like, “I want a fair price on a quality tire that is quiet, has good wet traction, and won’t wear out too quickly.” That’s what they would say if you asked them the basic qualifying questions. This is all more than worth your time if you have set up your go-to brand with a better profit margin. Extra payback comes from word of mouth advertising that your store gains by selling higher quality tires.

Don’t be afraid to make a fair profit. You and your business are worth it.

1 4 5 6 7