Cinching up profits: Belt replacement can be big business heading into winter
Oran Baker remembers last January well. That month a fierce storm blanketed Joplin, Mo., where his Burggraf Tire retail store is situated, with eight inches of ice. "There were people without electricity for two weeks," he says.
When power was restored, a lot of those people came to his shop to have their cars checked. The last thing they wanted was to be stranded on the highway during another ice storm, he says.
While Baker obviously welcomed the business, he says it's smart to winterize customers' vehicles before bad weather hits. "When the customer comes in, we check the tires, the suspension, the brake system, the exhaust system... the easiest things to check are wiper blades. We sell a ton of them. I go through 25 pairs a week. We also check lights -- headlights and brake lights. This time of the year you want to make sure the hoses are good, too."
Belts are one of the most critical components to check, he says, especially serpentine belts. "We look for cracks. If the belt is over three years old, I can almost guarantee it's going to have cracks in it."
Serpentine belts are easy to change and are good profit builders, according to Baker. He says his shop can easily make a 40% margin on them. "Just because you buy something at a certain price doesn't mean you have to give it away. When you get a chance to make a profit you need to make it because there are so many things you give away. You just loosen a bolt or two, take off the belt tensioner and replace the belt, and there are diagrams that show you how to do that. A good technician can put it on in 25 minutes or less."
If a customer's car has a worn belt, his techs show him. "All you have to do is take the customer out there, hit the light and turn the belt up. Most of these serpentine belts will have little cracks all the way across the belt, and you point out to them that if the belt breaks, their car's done. I've yet to have anyone say, 'Don't do it.'"
His insurance company lets customers come into his garage when accompanied by employees. "We also have a big window in the showroom where customers can watch what's going on with their cars."
Belt tensioners present another profit opportunity. Checking them is easy. "You want to spin them to see if there's any play in them." If you find looseness or noise, it's a good time to recommend replacement.
"Most parts stores stock all of this stuff," says Baker. "You don't have to stock these items like you used to. It's not like the old days where you might have 100 belts hanging up in your shop and you might sell 10 a month."
Burggraf Tire's winter checklist includes other items as well. "We look at battery cables. That's another neglected item. If your battery has been in there for three or four years, you need to be thinking about a new battery.
"Another thing that's neglected is servicing the transmission, including transmission flushes. A lot of people will go the entire life of their car and never do anything to the transmission. If you have a machine that can flush the transmission, it takes about 45 minutes; we get around $150 for it."
Selling customers on the idea of a transmission flush is easy, he says. A tech pulls out the transmission fluid dipstick and shows the fluid color to the customer, and then compares the color of the old fluid -- usually brown -- to the color of new fluid. Techs also explain that winter driving conditions can be extra-hard on transmissions. "Your wheels are spinning, you're not getting any traction and it's putting more of a load on everything. You don't have to be a rocket scientist to figure that if your transmission fails, you're not going anywhere."
Baker realizes some customers have smaller car repair budgets so he and his staff prioritize which repairs need to be done immediately. "Say you brought your car in today and we find that your tires have some tread left but your serpentine belt is ready to break. I would tell you, 'You can go a few more miles on your tires, but you really need to replace that belt. This is an item that will leave you stranded if it fails.'
"The big car dealerships and some of your mass merchandisers just push-push-push; they just care about the numbers. I care about numbers, too, but I want people to come back. There's enough stuff on a car that you don't have to over-sell. Our philosophy is show them what's wrong, give them an estimate and if they want to fix it now, fine. If they don't, they'll think about it down the line.
"You're not doing anyone a disservice by showing them what's wrong on their car; either they want to fix it or they don't want to fix it. If they don't, you shake their hand and let them go. But I'll guarantee that nine times out of 10, they're going to fix it."
Best Practices: Tips -- Direct and indirect marketing
Forget direct mail; Burggraf Tire is using e-mail to remind customers that their cars need to be winterized. "We try to get customers' e-mail addresses when they first come into our shop," says Oran Baker, who runs Burggraf Tire's retail store in Joplin, Mo. "Everybody seems to check their computers at least every day, if not every other day."
Not only is e-mail faster than mailing paper flyers, it's less expensive, Baker notes. What also costs very little money is word-of-mouth marketing. You can do that by getting involved with your local civic and business organizations, he says. "People like to trade with people whom they know. I'm president of a small business club here in Joplin. I'm involved with other organizations like the Joplin Chamber of Commerce. The biggest thing I can tell a young person who's starting in this business is, 'Get out there and shake some hands. Interact with people.'"