When Carl Moyer of Karl Chevrolet decided to take on the tire store across the street, he and his team planned for success. But, they could have never predicted they would have made GM history by being the first dealership to sell $1million dollars’ worth of tires in one year. Their success continued in following years as they increased their tire sales from $1 million in 2009 to $3 million in 2011. Not only does Karl Chevrolet present their customers with tire oprtions, but they also offer tire and wheel accessories. The dealership displays about 50 ready to sell accessorized vehicles and uses Insignia’s accessories system for selling accessories.
Although profit margins on new car sales continues to narrow, Karl Chevrolet has found a way to continually grow revenue and satisfy customers by offering tires and accessories. Here are four reasons you should get into the tire and accessories business
1. Revenue potential: “It just came to me one day. If you go up here on the corner and watch, every car and truck that goes by and try to find one that doesn’t have something bolted on it, your works cut out for you because most every one of them does.” That’s why Carl Moyer says he decided to sell accessories. In 2010 Karl Chevrolet averaged more than $170 per car in additional revenue selling accessories. Tires are a vehicle necessity and according to Steve True, VP of Sales for Car Dealer Channel, 10-15% of tires in your service lane need to be replaced.
2. Customer loyalty: Less than 20% of service customers are loyal. But, presenting them with the option to replace their tires in your service lane increases their loyalty, as 75% of customers choose to get all their service done at the place that can also replace their tires. Another great option to improve retention is via text programs offered through companies such as Auto Service Alert.
3. Demand: True says of the 10-15% of customers that need tire replacement only about 3% actually do it. At the same time, 78% of maintenance customers will buy from the first person that suggest a tire replacement.
4. Customer convenience: Statistics show that customers that personalize before leaving the dealership are more satisfied with their vehicle. Personalizing at the time they purchase their car is major convenience. Tires and accessories are purchase decision they will make. Why shouldn’t they get them at the place that sold them the car?