How to Use Tire Season to Steal Market Share (Service Drive Revolution)

Foreign.

Welcome to service drive revolution. Please say hello to Jeremy o' Neal and Christian Lafferty.

Hello.

How are you guys gentlemen doing?

Great. Hey, what's something you can give somebody but keep it at the same time?

Herpes.

The clap.

Nice. Yeah, I didn't see that coming.

You didn't? I was gonna say Covid, but I think everybody's tired of COVID jokes, so.

Hey, moving right along, today we are gonna talk about how to use tire season to steal market share.

Turning rubber into glue. That was Christian's line. Turning rubber into glue. How can you turn rubber into glue and steal market share during this upcoming tire season? We have some fun stuff that I think will be insightful, and we. We have to separate it into two categories, the northern shops and southern shops. So we have an answer for both strategies because it's different in the north than it is in the south for tire season. You don't really have a huge tire season per se in the south like you do in the north.

Correct.

I got to get out of L. A.

You do? Why?

Because it's. It's like armageddon.

It's pretty close to that.

People keep getting shot. Like somebody just two blocks away yesterday got shot right in the throat, dead.

Right on the street, right outside my apartment.

The constant stabbings and shootings. Now there's this app called citizen. Have you ever heard of it?

No.

Are you guys taking notes? Right, Christian.

Christian, you turned it off, right?

No, I actually. I fought it for a long time, and then I've recently turned it on, and now I'm participating in the chaos, so it's crazy how often the thing goes off. Oh, it reminds me too. So I got mugged the other day, actually.

You got mugged? I was show up on citizen.

I don't remember. I wasn't looking while I was getting mugged.

Wait, I feel like around.

So you never know with him.

Yeah, that's true.

That's true.

You really don't know.

But wait, so you got mugged the other day?

Yeah, I got mugged. Totally mugged. So the guy comes up to me and he says, give me your wallet or I'll make you science. And I looked at him, give me.

Your wallet or I'll make you science.

Or I'll make you science. And then I looked at him and I said, you mean history? And he said, don't change the subject.

So give me your wallet or I'll make you history. Like, I'll kill you.

Yeah, right. Thank you for the explanation, because I.

Had no idea Even the robbers and murderers here aren't sophisticated enough to know what they're doing.

Right?

It's chaos.

Not acceptable.

Where should we move, Jeremy?

I'm not moving. I love where I live.

We're gonna go to Texas and check it out.

I'm not going to Texas. I like all my friends and shop owners in Texas, but I would never move.

It's a great automotive state.

I'm staying here in California. It's all good.

Can you imagine all the Dallas Cowboy fans if we lived in Texas?

I'm a Cowboys fan. A die hard Cowboy. Hey, but speaking of all this chaos.

How do you grow up a Cowboys fan? In California, you just watched football at.

An early age and you watched Roger Staubach. You know, you all the like the uniforms. I like the cheerleaders. It's all good.

So you pick your football team for the cheerleaders.

No.

Seriously, how do you grow up a Cowboys? I just.

I've been a Cowboys fan my entire life. From the time I don't remember.

It runs in your family.

It does.

Your sister's a Cowboys fan too.

Really?

Is she?

Yeah. Die Hard.

There we go.

Gary G, man. So Cowboys fan made no sense either.

With all of this chaos going on, this is why our customers need to take better care of their cars. Because if they have to get out of town, you need a car that can make it happen. Peak performance and reliability. That's what's important today.

If I owned a shop downtown la, that's what I'd be saying. I had an armor plate. I'd be selling that like crazy bulletproof glass.

Could you get it from Tesla?

What do you mean, Tesla?

The bulletproof glass.

Does they make an armored car? I don't think they do.

I don't know.

I don't think.

Are you guys forgetting the truck? That the glass shattered on the Tesla truck.

But he's not making that yet.

I know, it's. It was my attempt at humor. I will leave the jokes to Christian.

Yeah.

I thought we discussed in previous episodes that you were going to clear your humor with me. That was unapproved.

Sorry.

It's okay.

And had you approved it, probably could have. Could have punched it up, right?

Yeah.

How would you have punched that up?

Oh, gosh.

How could you have made that funny?

Let's not talk about that. Let's talk about what's really important.

How to use tire season to steel.

So here's what's interesting about this. So when I grew up in the business in the early to mid-90s, we would see our customers four times a year. We'd put the oil sticker on us three months, 3,000 miles. And now some cars may only need one service per year. So I love the spring and fall seasons to get the customer back into the shop. And one of the questions that always, you know, clients ask me is, hey, hey, how do we get more business? How do we make calls? And I, for me, I'm not a fan of just making outbound, just sales calls. Like, customers hate those. So I want to have a reason. I want to have a purpose behind it. So this is a great reason to drum up the old database. Customers that haven't been in in 12 months to 24 months, to get a campaign going out on that, which is, you know, get ready for fall or winter driving. It's great.

Okay, so we'll. Let's talk about the north first, and then we'll talk about the south. So if you're anywhere that experiences a snow season where customers have their winter tires and their summer tires basically. Right. Non winter tires, like say, in Illinois or anywhere north, I would be. I would be storing their rims. Now we've set up with clients where we charge for that. So we charge a storage. And there's. There's different ways to do that. You can charge for it or you can make it a part of the benefit of buying the car. So. But either way, it's a retention tool. And oftentimes two things happen. Two objections come to light when we talk about doing this with a client. One is, oh, we tried that, and we lost their wheels or whatever. So you do have to be organized with it. You need to wrap them in plastic and put the customer's RO or information or something inside the plastic. So if it leaks, it rains, whatever, we still know who those belong to. And you, you have to be proactive and tell. Tell the customers ahead of time, book them ahead of time, control the input. So call customers a month out and plan it. Don't let them all just show up at one time.

Right.

That's the other mistake that they make is like, whoa, we just get too much and, you know, June or whatever. So you want to plan that out months ahead of time to swap it. But you're gonna sell more tires and you're gonna sell more alignments, and then they're gonna come in for the other stuff. The other thing is, is when you do change the rims in that scenario, inspect the car truck. I don't know how many clients we've had that will do the storage part. But they just have a kid for $8 an hour doing it and nobody's expecting. So they're just letting all this opportunity because they don't control the input. They don't control how many are coming in and how often. And they're leaving it to chance. Customers wait until the very last minute and then they panic. So you gotta call them and be ahead of that. Right. The other thing that happens with that is like, oh, we have nowhere to store them.

I've never had, I've never had that be the case. I, I can find wherever your shop or your dealership is. If I draw a three mile radius around it, I can find warehouse space cheap.

Right.

The, the retention is worth renting a warehouse for a couple thousand dollars a month.

It's your advertising budget almost. Right.

By the way, your parts manager has time to do this. Jeremy will tell you.

I'm speechless to that one. Not going to say anything about it. I have a question.

Parts one, you've. You've submitted to parts.

No, I have not submitted to parts. I will fight that battle till the end.

Well, I.

And all joking aside, I find that parts managers, once they accept this task are pretty good at figuring it out.

Well, I was going to say that the, they fight it at first. The people that complain about losing tires, they probably put the parts manager in charge of that system the first year.

They just don't have a system to wrap them. You got to wrap them in plastic so they're all together. You have to commit to it.

So wrap them and tag them.

Yeah.

Kind of like a dead body.

Yeah.

And get a place that, that you know, we'll have clients, they'll have one container. Like you know the containers on the back of a semi, they'll have one overflowing with them. You can't get in and out of it. You, you gotta, you gotta put them somewhere where they're inventoried and you can easily get to them. And then if you call months out and schedule it, then you have them brought over and you're ready to go. It's really easy. I've, I've yet to find the limit of how much you can charge to store and mount and balance.

The most we've charged is 399. And it wasn't a deterrent.

Yeah. I feel like 100 bucks is probably the thing I hear the most somewhere.

Yeah.

In that zone.

But that is not the top of the market.

No, it's not. But the thing.

And when customers say like, oh, we don't have anywhere to store them. I'm always like, just charge more, right? Like if you're storing 200 of them every season, we probably could store 400 if you weren't the anti storing them machine. But if we charge 250, it pays.

For itself, hands down. I think that that's the big thing too, is that you recognize like in your market, if it's urban, like there's a way more of a demand for that than somebody that, you know, might be out in a rural area and they have more storage area. But I just want like, it's that dehorsing thing that we used to talk about when I was in sales. Like get the customer out of whatever it is that they have. And then they're a captive audience, but they're always going to be coming back. So the other thing that I noticed too, to your point about scheduling things, is with my clients up north, when do they get the big rush of tires, Right. They call after the first snowfall and then all of a sudden it's panic. It's crazy, and it's chaos and everything like that. And that's the big thing is with that tire stuff, if you have all their tires, you know, the 200 or 400 people that you've got that have them, you start kind of planning that out five a day for, you know, every from the, from the middle of September to the end of October is what you're doing. Everything like that and you schedule down and it's nice and easy and then it's guaranteed revenue. I think that that is just. It's the glue.

Also, you can call them and tell them like, hey, your tire measurements at this. We should put new rubber on these rims.

Yeah.

So you can be ahead of it. I love how Jeremy is agreeing. Like he knows what we're talking about, but he's never experienced tire season in Chicago.

Oh, that's right. I forgot. You haven't really been up in the cold area now.

I've been coaching for a lot of years and I've had clients, I've been in New Hampshire when they've gone through this. So I understand one of the interesting things about down, you know, in the States, at least I know north of the border is like very consistent. But a lot of times, like in New England, they do wait for that big first snowfall to trigger it. And some customers may not want to schedule it because they're like, well, if it's still 60 degrees outside, I'm gonna, you know, burn the tires up. I'M gonna wait till we get snow on the ground. So stuff like that.

But that's easy to overcome. You just say, hey, we need to get ahead of this. Because when it does happen, everybody wants to come in at one time, and you don't want to be stuck. And we, we, you know, might have to have you wait a couple days. So you just tell the customer the truth.

Do you like how I let him into that role play? Just.

He loves the role playing. Dirty dog.

Oh, yeah, see right there. Now, the other thing is package. So you mentioned selling more alignments. I would have a package that has all that pre built into it, which is maybe an annual service package with the alignment and everything built into one so you're not having to make a lot of different presentations.

Yeah. And also, if you're a dealership, every time you sell a new or used car, you could give them a coupon for half off the first storage or even do it for free the first year. Once they get hooked in and you have one set, you got them.

All you need is the wheels, man.

Yeah.

So it's over after that.

If you sell, like, it's always funny to me is I'll be like, okay, how many do you guys store? And they're like, oh, 50. And I'm like, well, how many new cars do you sell a month? They're like 150. I'm like, so in a year, you don't have a 5% capture, 1500 cars. And you're like, what? No, it starts in F and I. It starts at the sale. And then how many used cars? Like, why can't, you know, why can't you storm on those two? So it starts up front. You have home field advantage. Act like it.

Yeah, I think from the, from the time of the sale, like, the dealers that we see do it the best are the ones that during the sales process, they're actually selling the winter tires and wheels right on the thing. And the customer never even sees it. It's like, oh, we'll let you know when it's getting close to time to put on. We've already got them stored and your names on it and everything like that. Like, they're. They're yours in service forever. And they haven't even left the dealership from the sale.

And now's the time to think about it. We're talking about it early to give you. Give you a head start. Now let's.

Oh, go ahead.

Well, independence. This can be a competitive advantage to where if you want to break into this market come up with a very unique marketing campaign to start to take some of this market share away. So if you're not storing tires, think outside the box and find a place to do it and create that as another revenue stream. Because if you can add three or four hundred sets of tires that you're storing, I mean, that's a golden opportunity to do a full inspection on the car and meet a customer, really build a great relationship with them and pull that car out of the dealership. Maybe the independents can get to a 95% attrition rate where we take in 95% of the cars out of the dealership.

Instead of 80.

Instead of 80.

Yeah.

Opportunity. It's there.

Then the southern.

Dealers or shops. Right.

Yeah. I think the thing to recognize with our southern dealers is that what to your point earlier is that tire maintenance is actually due more often than oil maintenance. Like, it's crazy that that's the case. So I'd be using that as my retention tool to customer that way.

Yeah. And the change of season, Right?

Yep.

So using the change of season as a reason to get them back in for a pit stop. Stop. Or let us check it out. Check your tire pressure, top off your fluids, and inspect it and do a pit stop. But I find that the. Probably the best retention tool there is lifetime alignments.

Yeah.

And so it's funny, your. Your sister bought a new key. Is it a Kia?

Hyundai?

Is it a Hyundai or a Kia?

Hyundai. And a Honda.

Well, Hyundai and Kia and Hyundai. She's never gone to the dealer. Never gone to the dealer because she bought a lifetime alignment at Firestone. Is it Firestone?

I think it was Firestone. Yeah.

One of those chains. And so even though it has nothing to do with an oil change or maintenance, she goes there because that's where. That's where she hangs her hat.

Yeah.

Right.

Interesting.

And so selling an alignment yearly that, you know is a. Is a lifetime or three year or however you want to do it, the lifetime one's kind of pencil. But they come back, and then you remind them to come back, and you can charge more for it. Right. So if you charge 129 for a regular one, you can charge 299 for the lifetime. But you're hooking them in, and then you're gonna get the tires, you're gonna get everything else.

Yeah, you can use nitrogen like that too.

Yeah. So using that and the change in seasons to get. To get them back in. Understand too, like, you're supposed to check your tire pressure every time you fill it for gas.

Yeah.

Oh, come on. That's what the TPMS is for. The dash tells me where my tires are up.

Yeah, right.

It does.

I think it's still a good idea to get out and look at him, though. Especially if you drive like me. You never know what's gonna jump out in front of you.

I don't know how many times I've gone out and had a bubble in the sidewalk.

Yeah, me too. That's what I'm saying. You gotta be checking that stuff.

Yeah.

Oh, you know what? That makes me think of something. What can't be used until it's broken.

What can't be used until it's broken. H. What you got him thinking on this one?

Broken.

I give up.

What an egg.

Huh?

Clever.

I like it.

Thank you. I ran that by the joke person before I said that.

Who's the joke person?

Not Jeremy.

Oh, my gosh. You were bashing me today. Wow.

Usually I'm really nice.

Interesting.

What's wrong?

This takes me back to, like, lifetime oil changes instead of alignments. So we used to, you know, sell a lifetime oil change on the car, and that was very successful in the, you know, late 90s, early 2000s. And then that kind of has gone away. I'm just like, lifetime cabin air filter coming and get your cabin air filter changed.

Yeah, I would say to that, too.

We.

We have a. A dealer group as clients that have a lifetime oil change as part of buying the car.

There's.

And when. When we started coaching them, I remember you would hear a lot from the managers, like, oh, these things are bringing down my averages. Right. And they. They're not saying that anymore. And they're. They're doing way better and selling more. And a lot of it was they. They don't look at that as an opportunity and a retention tool. But from a dealer's side, that's one of the best ways to retain customers, is to have that. And it can pencil like. That's the thing with these sort of things that. That always blow me away is you can do the math. So it pencils. You can pack it into the new car. You, you know, you can write it off to advertising, whatever it is. But I would rather have the traffic than not have the traffic. I'd rather have the retention and the opportunity and keep them coming back than losing them forever.

Yep. Yeah, we did that at my Infinity store. And I remember when you came in and I thought one of the first things you're going to say is, do away with the with the free oil change program.

I think people think that a lot.

And then you came in, you're like, that's a great idea. I can't believe that more people don't do it. And it was really, really fair and equitable. So the. We wrote off the cost of the oil change. It was split between parts, service, and sales, and it was really, really equitable. And our retention was in the 80s like it was. It was crazy how retained our customers were because they always came in and. And it had so much to do with the mindset, and we were just really grateful to have the people.

Yeah. It's because, you know, it's crazy, but dealers usually retain 20, 25%, and you can retain 80 if you want.

So.

Yeah.

I'm curious because I wonder why more dealerships and even independent shops don't kind of use the Costco membership mindset and create an exclusive club or membership that customers have to. It's limited.

It's interesting you're saying that. I was thinking about that the other day, because, you know, the Ferrari store here in Calabasas, it used to be 50 grand to join the club to then to be able to buy a car from them.

Wow. Just to be able to buy a car.

Yeah. Well, because it's here. Right. And they were kind of like they were serving Beverly Hills and all that, and.

Yeah. I just wonder if there isn't a model there for that.

Well, there is. I mean, we're moving our shop, so we're gonna start moving more towards that direction with the VIP program.

So is it almost like you're doing an extended warranty, extended maintenance program where more is.

I'm gonna package the annual maintenance that your car needs into the membership cost. So when you pay the membership, you're not gonna be out of pocket for the.

You have a different price for, say, like, a Honda than you would for a Ford.

Yeah, yeah. And. Well, of course, the Ford would be like $29,000. We get started on that right away, but.

And then there's a different cost.

Yeah, different tiers. The other thing is, like, I look at Fletcher Jones Mercedes in Newport beach, the largest Mercedes Benz dealership, you know, in the world. And their car wash is crazy busy. Like, when you pull in a service drive, you can't tell which line is for.