Add power to your business: Battery marketers want to help you beat the competition
Remember TBA, an acronym of the 1950s and '60s? In those days, independent tire dealers were in the "tire, battery and accessory" business. By the 1970s, the "A" evolved from accessories to automotive.
But over the course of the 1980s, the three-letter description slipped from view altogether. Unfortunately, so did top-of-mind interest in selling batteries. In many dealerships, battery inventories were relegated to the back room -- out of sight and out of mind for dealers and customers alike.
While every self-respecting tire dealer will say the battery business is part and parcel of their tire business, many will admit privately that they have not been doing a very good job of selling batteries in the last decade or so.
That's not a good thing. Neither is the fact that Sears, Roebuck & Co., Kmart Corp. and Wal-Mart Stores Inc. are working vigorously to grow market share in virtually every retail automotive category, including batteries. Can you work against that kind of retail muscle in the battery market? Of course -- many dealers already do. And there are battery manufacturers and battery marketers who will break open the champagne if you sign on as an account.
According to Modern Tire Dealer's 2001 Automotive Service Survey, nearly 85% of independent retail tire dealers offer batteries and related electrical service. Each shop averages 24 jobs per month; at $78 per job, the average dealer grosses $22,463 a year on batteries and electrical service.
At this moment, there are 200 million cars and light trucks on American highways wearing out their batteries. One out of every three vehicles passing your dealership right now needs a new battery, or will in less than 12 months.
"Replacement batteries represent a $4 billion a year market," says Pete Quinlen, director of multi-step marketing for Exide Technologies Transportation Group. "It's important for independent tire dealers to recognize that tires, brakes and batteries are the top three replacement parts categories. Based on raw numbers alone, batteries should be an integral part of every dealer's business.
"Also important, battery customers will only be in the market for a new battery for about 120 minutes, tops. This is not a preventive maintenance business." Quinlen says because most people only buy a new battery when it fails, they will buy it from the first person they can reach.
"Tire dealers can make money selling batteries, and we do our best to make it a no-brainer," says Jay Cooney, director of national accounts for Interstate Battery System of America Inc. "We think that the 30% margin on our batteries, plus or minus five points, is pretty good."
What's Sears up to?
The promise of help from battery makers and marketers is comforting in the face of ever-stiffening competition. Even so, the outcome depends on your resolve. Listen to what Sears, which has automotive service centers at most of its 840 department stores, has in mind.
"Our position is to make the longest lasting, most reliable battery out there," says Tom Nicholson, a spokesman for Sears, about his company's famous Diehard line. "Speed and expertise is what we work on every day. We want Sears to be the local battery expert customers can turn to for advice, and we want to be very good at getting customers in and out of our service bays."
Nicholson isn't shy about mentioning his employer's battery warranty, the longest in the industry -- a free replacement for three years and a 100-month limited warranty on top-of-the-line batteries.
"In addition to returning to battery maker Johnson Controls Inc. (JCI) for our Diehard batteries, we are investing in retraining all of our Sears store managers and auto center personnel," he says. "We are interested in what we call consistency of delivery -- no surprises for the customer."
Also at work is the Sears Gold MasterCard and its promise to award one point for every dollar the holder spends (on anything, anywhere), good for redemption on anything Sears sells. It's all part of the Sears Choice Rewards program.
"This is a company with a reputation for knowing how to promote itself and for treating customers with respect," says Nicholson. "On the arch over the entrance to the Sears headquarters building in Chicago it reads, 'Satisfaction Guaranteed or Your Money Back,' and we mean it."
National Tire and Battery (NTB) stores, owned and operated by Sears, recently offered a $59.99 Diehard Weatherbeater battery free to every purchaser of four new tires.
One NTB counterman, when asked if the promotion had an effect on business, said, "Not really. I didn't notice any particular pick-up in business."
MTD also checked out the new Diehard Gold battery. While a Sears Auto Center counterman mentioned the three-year, 100% free replacement feature, he failed to mention the 100-month (8.3-year) limited warranty. He also said the battery offered 795 cold cranking amps, when, in fact, Sears' own Web site says it offers 900 CCA. Finally, he told us installation on a 1998 Pontiac Bonneville would be $9.95.
Fighting back and winning
"Changing the battery on a 1998 Pontiac Bonneville is a five-minute job," says, John Schadel, manager for the Feeney/McIntyre Tire Co. store on Rt. 18 near Akron, Ohio, (pictured). "We don't bother charging our customers for installation unless it's one of those nightmare installations.
"I can also sell that customer a battery for the same price as Sears. Mine will push out 800 CCA, is backed by a 72-month (six-year) warranty, and there is no installation charge. I'm less expensive."
Schadel, who handles the Interstate Battery line, says the independent tire dealer is more knowledgeable and provides better service than the Sears techs in every instance. "Our tire business is growing and so is our battery business. We used to sell one or two batteries every two weeks, four a month. Now I sell 20 a month and I believe it's because of our relationship with Interstate. They treat us like family.
"They set up a pair of displays with 20 new batteries right by the front door," he says. "The route man checks date codes and replaces old batteries with fresh ones every two weeks. He also knows what's moving, what's not and adjusts my inventory accordingly."
Schadel likes the attention and the fact that he gets his batteries on consignment. "Nothing happens until I sell a battery," he says. "If I need a battery that isn't in my display, I get a hot shot delivery right away. It's a no-brainer for me."
Gary Fullerton, owner of Wood Fullerton Inc. in Roswell, Ga., gives Interstate high marks, too, but with a slightly different take. "I don't get my batteries on consignment," he says. "I prefer to buy them at a better price and handle that part of the equation myself."
Since becoming an Interstate dealer, Fullerton reports his battery sales have climbed 25%. "We have 11 stores in the northern Atlanta suburbs, and our battery business is up across the board against the biggest retailers in the country."
How can that be? "I think it's because the giant retailers often think too much about profits and too little about integrity," says Fullerton. "The 'big boxers' will always get the price shopper, but I'm not necessarily after those buyers. Sure, I can buy $19 batteries that may not last out their warranty, but that kind of business will always come back to haunt you.
"People come here because they want my service expertise," he says. "They know I'm not going to stick five new batteries in their car when the problem is a loose alternator belt. We aren't parts replacers, we are trained trouble-shooters."
In Lincoln, Neb., George Hoellen, vice president of retail sales for T.O. Haas Tire, signed on with Exide to handle his battery program. "We handle only the top-of-the-line Exide batteries in 14 of our 20 stores in Nebraska, Kansas and Iowa," says Hoellen, "and if Exide offered route service where all our stores are, I would sign on the dotted line right away."
Since taking on the Exide program two years ago, Hoellen's battery business has tripled. "We can consign batteries or we can buy them outright, so we do both."
T.O. Haas, part of the Heafner Tire Group, is a small market operation with a long and solid reputation in the Midwest. "We know our customer base very well," says Hoellen. "We know that they are not price-driven, that they do not want a $29 Sam's Club battery, and that they will only be in the battery market for an hour or so when their battery fails."
Hoellen says he feels Exide is mirroring what Interstate is doing. "We don't care about that. We care about making sure that people know we're in the battery business. We advertise that fact and we even hire a firm out of Beachwood, Ohio, to check T.O. Haas customer opinion. The results so far are positive."
The last word
Do you have a reputation as a seller and installer of batteries? If you don't, you may not get the business when a customer's battery dies and he or she needs one quickly.
The battery companies we talked with say they can help. They can offer you a strong "battery selling" image by pulling batteries out of the back room and putting them right up front with tires and wheels. They also say they offer competitive warranties, new technology batteries and training.
Also, be sure your techs talk with your customers about battery check-ups. It's a common sense idea that works.
Player profiles: Who's who among battery companies
Interstate Battery System of America Inc. has been in the business of consigning batteries to dealers since the 1950s. A marketer, not a manufacturer, Interstate says it has 200,000 dealers nationwide, and operates in all 50 states through some 300 distributors. Their private brand batteries come primarily from JCI, which holds a 48% equity position with Interstate. (JCI also makes the Sears Diehard).
"We know that a tire dealer's reputation is at stake every day," says Interstate's Jay Cooney, director of national accounts. "Our job is to make certain that every battery in a tire dealership is fresh, and that the dealer's techs are well trained.
"Inside corporate headquarters in Dallas, we call it category management. That means it's up to us to see to it that tire dealers have the right product mix at the right time, ready for instant use.
"We also see it as our responsibility to offer tire dealer training. Dealer techs should check every battery they see for age, they should check the terminals, fluid levels and use a hand-held tester to determine the current status of the battery.
"In this way, the dealer stops being a parts replacer," he says. "He becomes a troubleshooter for the customer who thinks his battery is failing when the problem might simply be a bad cable. Customers appreciate this kind of professionalism, and dealers who have good battery know-how will build on an already strong customer loyalty base."
Interstate believes it may have inadvertently started a warranty war among battery makers and marketers. "About a decade ago, the standard warranty on a battery was six to 12 months with a free replacement," says Cooney. "Then we went to 18 months and the race was one. Sears is out to 8.3 years even though most batteries will never see that kind of life."
Exide Technologies Transportation Group also works with tire dealers, according to Pete Quinlen, director of multi-step marketing. "We talk to our tire dealer customers about their customer base: 'Do you have a big import clientele, a big domestic base, are you heavy in light truck?' It makes a difference in how we will service the account. That means everything from depth of inventory to type of battery to display."
Exide, founded in 1888, is the largest battery manufacturer/marketer in the world. "We make batteries for the OEMs, and market to a host of retailers including independent tire dealers," says Quinlen.
The customer who shops at Sears for a battery is not the same customer who goes to an independent tire dealer for a battery, he says. "Sears can't compete with an independent tire dealer when it comes to personal service. That's why every independent tire dealer should be actively involved in a solid battery program."
East Penn Manufacturing Co. Inc. markets the Deka brand battery. "We don't offer batteries on consignment," says President Dan Langdon, "and we like to sell to the smaller dealer outfits, those with eight to 10 stores."
East Penn makes and markets batteries for a variety of customers. Langdon says he can make private brand batteries for dealers with their name on it. "We have 65 branches with local salesmen in the U.S., and offer pretty much what our larger competitors offer in terms of competitive pricing, route salesmen and battery rotation.
"Tire dealer business fits our style of doing business. We know they must be competitive and that's what we have to offer."
Battery makers and marketers also say they will remove old junk batteries from your premises. Most are recycled, and all are handled in a manner that is in strict accordance with EPA guidelines.