Retail

Inflation proclamation

Order Reprints
Inflation proclamation

You’ve done the research, you’ve mulled over the idea and you’ve finally made the investment: you’ve paid several thousands of dollars for a nitrogen inflation machine.

It’s been installed, your techs have been trained to use it, and your equipment supplier has provided you with all kinds of point-of-sale materials, including brochures, spec sheets and signs.

You’re ready to recoup your investment and boost your bottom line by offering the popular service, but you have a two-fold problem:

1. How do you let customers know you now offer nitrogen?

2. How do you convince them to pay for it?

Nitrogen inflation “is not going to sell itself,” says Terry McCune, who offers nitrogen at his Big O Tires Inc. store in Livermore, Calif. “You have to sell it, and the best way to do that is to get information to the customer. The usual reaction when you try to sell nitrogen is the same reaction I had when bottled water came out: ‘Are you crazy?’ But if you tell the nitrogen story and explain the benefits to the customer, it’s an easy sell.”

Here’s how McCune and several other independent tire dealers are successfully selling nitrogen inflation by telling “the nitrogen story.”

[PAGEBREAK]

‘Easy sell’

You would be hard-pressed to find an independent tire dealer who tells “the nitrogen story” with more enthusiasm than McCune, who started selling nitrogen in 2006, dispensing the substance out of canisters.

“The Costco stores in our area were doing nitrogen, but one of our concerns was, ‘Can we sell it?’ We started buying it by the bottle. Lo and behold, we did such a good job we kept running out of nitrogen!”

Even his canister supplier had trouble keeping up.

“We used to buy six canisters at a time. It got to the point we ran out a few times and said, ‘We have to make an investment in a generator.’”

McCune, whose single-location shop has been in business for about 11 years, began to research nitrogen inflation equipment suppliers. Several fellow Big O dealers in his area were using N2Revolution Inc.’s PurigeN98 system. “I talked to people I know and they were able to give me information about the company and the system.”

McCune bought a PurigeN98 generator in January 2007 for $4,000. “We were able to pay for the equipment in four months.” For the full year, nitrogen generated $25,000 in profit for his company.

How did McCune’s store get to that point? By constantly telling customers about nitrogen and its benefits.

McCune and his salespeople also use ready-made tools like savings calculators on Web sites posted by N2Revolution (www.purigen98.com) and the Get Nitrogen Institute (www.getnitrogen.org). “You punch in how many miles you drive, the cost of your tires and how much a gallon of gas is selling for in your area, and they show you cost savings.

“For customers who drive a lot, (nitrogen) makes a big difference in their pocketbooks. Fuel economy is a big deal.”

Emphasizing other benefits is part of telling the “nitrogen story,” according to McCune. “Nitrogen is 40% less permeable than oxygen so it doesn’t leak out as fast. Most people are not aware of this so I give them the ‘helium balloon analogy.’ If you’ve ever had a balloon, you know that if you go to bed at night and wake up in the morning, the balloon is down on the carpet. What happened is the helium molecules were small enough to pass through the latex; they went right through the pores. Oxygen will do that with a tire,” though at a slower rate, he notes.

[PAGEBREAK]

Tire pressure maintenance is another subject he discusses with his customers. “We always say, ‘Check your tires once a month,’” though few customers follow that advice, he says.

“Nitrogen is not a substitute for pressure checks, but I like to say, ‘Know thyself.’ If you’re really not doing it and you’re not going to do it, (nitrogen) will provide an extra margin of safety for you.

“Consistent tire pressure will benefit you in a number of ways. You’re going to get longer tire life because the tire isn’t running under-inflated, and you’re going to get better fuel economy because a tire that’s under-inflated has more rolling resistance.

“It’s like anything else,” he continues. “Some people want a lot of information and some people want a little information. If they’ve known you for a long time, some people just trust you. We try not to push nitrogen on people, but we like to mention it.”

McCune’s store charges $23.99 to inflate four tires with nitrogen. N2Revolution originally told McCune that some new car dealerships charge as much as $12 per tire for nitrogen. “We said, ‘Great! We’ll sell it for $5.99 per tire!’” McCune says N2Revolution executives asked him why he wanted “to leave so much money on the table.” His reply: “If the customer wanted to get ripped off, he’d already be going to the car dealer.”

McCune’s outlet does not charge for nitrogen re-inflation or pressure top-offs “no matter what happens. If you have a flat, bring it in; we’ll fix the tire and then re-fill it.” Purging the air out of a tire isn’t a problem either, says McCune. (“In order for the nitrogen to do its job properly, you need to be at about a 95% purity rate.”)

“The nice thing about this is you don’t have to sell tires to sell nitrogen. We offer free rotation. If a customer comes in for a rotation, we can sell him nitrogen. You can sell it to anyone who comes in the door.”

When McCune’s techs fill a tire with nitrogen, they place an N2Revolution-supplied plastic cap (colored blue) on the valve. The dealership offers chrome caps for more image-conscious customers.

McCune’s techs even fill customers’ bicycle tires with nitrogen!

“All in all, it works out pretty well. We get the customer coming back to us.”

[PAGEBREAK]

As time goes on, it may become more difficult to hold onto those customers, says McCune. “I believe that sooner or later, most — if not all -— tire dealers will offer nitrogen and someone will give it away. When that happens, if you want to be competitive, you’ll have to start giving it away, too.

“You have an opportunity now to let your customers buy your equipment for you. If you wait, you’re going to buy the equipment and you’re going to have to give it away.”

If you’re successfully selling nitrogen, don’t rest on your laurels, he warns other dealers. “If you tell the story and sell the benefits, you’re going to do very well. If you don’t mention (the benefits), you’ll have a generator with a bunch of dust on it.”

True believers

Doug Hodges, vice president of Colony Tire Corp., one of the largest regional independent tire store chains in the country, tells his version of “the nitrogen story” every chance he gets.

“If you’re not prepared to talk about it and educate people about it, you’re better off staying away from it,” he says.

Hodges wasn’t always a fervent believer. He first heard of nitrogen inflation three years ago. He was interested in the service, but wanted to test how nitrogen would run in his tires before investing in equipment.

“I put nitrogen in my own tires and in eight months I lost one pound of air in one tire. I was sold on it. I was convinced it was a good value.”

The next order of business was trying to find out if Colony Tire could sell it. The company installed inflation machines in a couple of stores and ran test programs. Customers bought into the concept, but it took some education to get there. “Just because you put nitrogen in your store, you’re not going to be successful. John Q. Public is not going to walk in and say ‘I want nitrogen.’ You have to explain the features and benefits. Right now the biggest benefit is the fact it saves gas.”

[PAGEBREAK]

Hodges and his salespeople use a simple analogy to hammer home the fuel saving benefits of nitrogen.

“We ask customers, ‘Have you ever ridden a bicycle or pushed a wheelbarrow that was low on air? Was it harder to push? If you take that same principle and your car tires are low, do you think your car motor has to work harder to push it? It takes more energy for your car and more energy takes more gas.’ We found that was the story they could relate to.

“People are looking for ways to conserve gas. The average customer doesn’t care about the (general) economy as much as you might think, but he does care about (his own) pocketbook.”

Nitrogen isn’t for everyone, cautions Hodges. “We tell customers if they check their air pressure every 30 days and keep their air pressure up they won’t need nitrogen. But I would say 90% of every tire that comes in our shop is under-inflated by 10% or more.

“I personally think you owe it to the customer to give them the opportunity to save some money on gas,” he continues. “If you offer nitrogen to them in the proper context, 75% of them will take it. If you don’t promote it and are just waiting for something to happen, it’s not going to happen.”

Thirty Colony Tire retail stores currently offer nitrogen. (The Edenton, N.C.-based dealership has 40 locations throughout North Carolina and Virginia.) We just bought 18 inflation machines.” Most of Colony Tire’s nitrogen generators are from Branick Industries Inc.

The dealership charges $7.50 per tire for nitrogen inflation. It advertises the service in newspapers and also inside its outlets. “In a lot of towns we’re the only (tire dealership) that has it.”

That may not always be the case, according to Hodges. “I think within five years every car that comes from the factory will have nitrogen in it, and I think so many people will be selling nitrogen you’ll have to give it away.

“Nitrogen is free; your investment is the machine. My hope is to make enough money to pay for my machines before I have to start giving it away.”

[PAGEBREAK]

Preventive nitrogen?

CPR Tire & Auto in Longview, Texas, has only been selling nitrogen for six months, but Tim Parker, the store’s manager, has been more than happy with the returns he has seen. He calls the service a “no-brainer” for tire dealers. “You’re going to recoup your money.”

CPR Tire began offering nitrogen in December 2007. Other companies in the single store dealership’s marketing area, including several new car lots, were already offering the service. “We wanted to be on a level playing field and offer something they had.”

Even so, Parker was somewhat skeptical about the service’s benefits. “I’ve been in this business a long time. You tend to become a little pessimistic sometimes. I’ve seen a lot of gadgets come and go.”

“But we did our homework. We read everything we could get our hands on, we got online, and we even talked to some of our competitors.”

Approximately a half-year after setting up a Gardner Denver Inc. nitrogen generator in his shop, Parker is convinced that nitrogen is more than a fad. The service offers genuine benefits, he reports, especially in east Texas, where temperatures fluctuate greatly between day and night, which can alter tire pressure levels.

“The temperature can drop as much as 30 degrees overnight, which sets (a car’s tire pressure monitoring system) warning light off.” Nitrogen helps reduce the frequency of those instances by maintaining tire pressure levels more uniformly than air, he believes.

CPR Tire tells “the nitrogen story,” but in a low-key manner. “I hand out information every time I sell tires. I also make sure my customers who aren’t in for tire-related service are aware of it.”

The dealership promotes nitrogen inflation as a preventive maintenance action. “I tell customers one thing they can do to protect themselves (from tire pressure fluctuations) is put nitrogen in their tires. They won’t have to worry about the low pressure light coming on all the time.”

CPR Tire advertises nitrogen in phone book ads and has hung banners on the outside of its store, but “your customer really promotes it for you. If you promote it to customers who are already coming through your door, you can rely on them to advertise it for you.”

Parker and his salespeople also make sure they tell customers that race cars use nitrogen. “NASCAR is a magic word here!”

[PAGEBREAK]

The dealership charges $5 per tire for nitrogen inflation and has an open door policy.

“If a customer buys tires down the street and they come to me for something else, you bet I’ll sell it to them.”

It normally takes three to five minutes to fill a tire with nitrogen depending on a variety of factors, including the tire’s size, says Parker, who adds the his shop doesn’t charge more to fill bigger tires.

Even though other companies in CPR Tire’s area offer nitrogen, Parker has no doubt it will remain a profitable service for his shop. “We have Dodge, Ford, Chevy... they’re offering it, but for the most part aren’t promoting it. It’s kind of an in-house deal.

“At the car dealership level, they’ve been slow to catch on for a long time. They aren’t very aggressive with maintenance. They could be competitive if they wanted to be, but as long as they’re missing the boat, it’s money in our pocket.”

Ahead of the curve

E.F. Tire & Auto Repair, a single location dealership in Pompano Beach, Fla., also is surrounded by car dealerships that sell nitrogen. But that doesn’t bother Pete Diener, the dealership’s manager. “The south Florida market seemed to be ahead of the curve (with nitrogen),” he explains.

E.F. Tire has been ahead of the curve as well; it’s been selling nitrogen for three years. (The company uses NitroFill equipment.) “We did it for the customer retention benefits.”

When customers have their tires filled with nitrogen at E.F. Tire, their names and addresses are entered into a database. NitroFill then sends out direct mail pieces to them once a month. “Not a day goes by where I don’t get two or three customers with a newsletter in their hands.”

When customers come back in to have their pressure levels checked or topped off, E.F. Tire’s techs inspect their cars for potential problems, which can lead to repair sales down the line.

[PAGEBREAK]

The dealership sells nitrogen as a package deal in tandem with NitroFill. If customers buy nitrogen at the shop, they are enrolled in the NitroFill Auto Club. Member benefits include road hazard tire repair and replacement coverage, 24-hour towing and other services.

“That makes it very easy to sell nitrogen,” despite the package’s $39.95 price tag, which is higher than what many independent tire dealers charge for nitrogen inflation.

The package generates about $3,500 a week in income for E.F. Tire, according to Diener. (The company advertises the NitroFill package for a slight discount of $32 in print ads. “Our general loss leaders in the paper are check engine lights, lube and filter, and air conditioning service.”)

Post-inflation services aren’t the only selling points. Diener and his salespeople also emphasize the technology behind nitrogen, which he says resonates with customers.

“We have a higher income clientele. We talk about the fact that their tires last longer. When they have nitrogen in their tires, they seem to be more up on tire pressure maintenance. They’re more educated and tend to stay on top of their levels. They think about it more.”

E.F. Tire has one NitroFill machine that runs 10 hours a day. The machine can inflate multiple tires at the same time.

“We mount and balance (the tires) with air, then we pull the car over. We hook up the machine and let it run by itself.” The machine purges air out of the tire twice. “It empties it, fills it, then empties it and fills it again. People like to watch that.”

With so many places in his market selling nitrogen, does Diener worry about over-saturation? “Everybody changes oil,” he says with a laugh. “Everybody charges for air conditioning work. Everybody sells tires. It’s just one more piece. It makes sense, it’s very popular and right now I’m making a fortune with it.

[PAGEBREAK]

Want to sell nitrogen? -- Start small but hurry up, says dealer

Do your homework before going full-throttle with nitrogen inflation, says Terry McCune, who’s doing big business selling nitrogen at his Big O store in Livermore, Calif.

He has two pieces of advice for tire dealers who are thinking about offering nitrogen:

1. Start small. “Find someone in your area who sells tanks of nitrogen and dip your toe in the water. If you buy a generator and can’t sell nitrogen, you’ve got problems. But if you have a couple of tanks and can’t sell it, no harm. See what happens; if you have success, you can always buy a generator later.”

2. Act quickly. “The window of opportunity is right now. All it takes is one mass (independent tire) retailer to start promoting free nitrogen. If that happens, I’m giving it away, too.”

“It’s a battle for market share out there,” says McCune. If marketed correctly, nitrogen inflation can help you gain market share.

'Phenomenal results' -- N.J. car dealer charges $40 for nitrogen

Independent tire dealerships aren’t the only businesses making money by selling nitrogen. New car dealerships are getting in on the act, too.

Here’s a look at what one of your competitors is doing.

Ditschman/Flemington Ford Lincoln Mercury in Flemington, N.J., reports it has inflated more than 2,600 tires with nitrogen since installing its first UltraFill generator in October 2007.

“We’ve had phenomenal results with it,” says Bob Hoffman, Ditschman/Flemington’s service manager.

“We see customers coming back with little or no difference in their inflation pressures.”

The dealership charges $39.95 to fill four tires with nitrogen. “The system is piped through our shop so there’s a drop down for every other bay.”

Ditschman/Flemington offers free nitrogen top-offs. “We also do a money back guarantee. If you’re not happy, we’ll give your $39.95 back in service credit.”

The dealership participates in Ford Motor Co.’s Around the Wheel tire program. It sells about 100 tires per week. (“We give our customers three price levels: low end, a medium brand, and high end,” says Hoffman.)

You must login or register in order to post a comment.