Fixed Ops Journal - August 2016 - (Page 16)

FIXED OPS JOURNAL ■ When a dealership stores tires inefficiently, look out | PAGE 18 | STORAGE AT THE STORE ■ Stashing customers' winter tires helps dealers gain service jobs JIM HENRY foj@autonews.com D ealerships in places with wintry climates that store tires for their customers during the off-season must maintain investments in space, time and attention. The service usually isn't a profit source. But tire storage pays off in service visits, sales opportunities and enhanced customer loyalty, dealers and industry experts say. "The guys who really embrace this are the guys who understand retention," said Jim Phillips, the director of education, OEM and allied industry, at the National Automobile Dealers Association's Dealer Academy. NADA does not keep data on the number of franchised dealerships that store customer tires, he said. "The physical act of storing tires is not extremely lucrative," Phillips said. "But the idea is lucrative because customers come back." Customers who store winter tires at a dealership visit in late fall to get them put on and in early spring to have them taken off. Owners of premium-brand vehicles are more likely to store their tires. The point is retention Many dealerships don't charge for tire storage but often more than make up for the cost by capturing additional service business. For example, dealerships may charge for tire installation. Mary Pacifico-Valley, dealer principal of the Denver-based Rickenbaugh Automotive Group, said the group's Infiniti dealership in Dacono, Colo., offers free storage for newvehicle customers who buy tires there. Keith Smerchek, the dealership's fixed operations director, said the store charges a $60 fee for tire mounting and installation. "The whole point is to get customers loyal, to encourage retention and loyalty," Pacifico-Valley said. "If you try and make it a profit center, you've defeated the whole purpose." "And of course, you do see them twice a year," she said. "At that time you do the multipoint inspections, all the things you do whenever anybody comes in." Derrick Albrecht, the service and parts director of Lexus of Bellevue in suburban Seat- PAGE 16 AUGUST 2016 JENNIFER VUONG Wellington Motors in Guelph, Ontario, stores 400 sets of customers' off-season tires. Tire concerns Advantages and drawbacks of dealerships storing customers' offseason tires PROS Ⅲ More service visits Ⅲ More tire sales Ⅲ Greater customer loyalty CONS Ⅲ Tires take up space Ⅲ Minimal direct profit Ⅲ Demands precise record-keeping tle, said his dealership also offers free wintertire storage for customers who buy the tires there. Customers pay $25 per tire for mounting and installation. "It's a service we've been providing for coming up on 15 years," Albrecht said. "It's a natural way to sell more tires." Albrecht said the dealership program addresses customers' concerns about where to store their winter tires. "It also gives us a great [opportunity] to remind customers in November and April to come and visit us," he said. The dealership's sales of winter tires vary with the weather, Albrecht said. "Some years when there's snow, we've sold 400 winter tires," he said. "Some years it's 80. In the Pacific Northwest, we don't have hard winters, but we do get a lot of rain, and the winter tires just work better all around." Patrick Nove, Lexus of Bellevue's parts manager, estimated that the dealership generally stores around 300 sets of tires. That's a relatively small number, he said, considering that the dealership sells more than 1,200 new vehicles a year, but added that available space imposes limits on tire storage. Space, the final frontier That's a common problem. At some point, Pacifico-Valley said, her Infiniti dealership "will need offsite storage, and I will do that when we reach that point. [Tires] just take up so much room." SEE STORAGE, PAGE 55

Table of Contents for the Digital Edition of Fixed Ops Journal - August 2016

Fixed Ops Journal - August 2016
Contents
Editor’s Letter
Service Counter
Legal Lane
Treading confidently
'Tis the season
Profit Builder
Valet service
Richard Truett
OEConnection
Changing oil:
Photo story
Trade-off
Toyota way
Feedback
Lone star
Airbag recall
Forging links
Top 50
5 Minutes With
Shop Talk
Fixed in Time

Fixed Ops Journal - August 2016