Common points: These tire dealerships cater to different demographics, but all four know how to market nitrogen
Fort Lauderdale, Fla.-based Hennelly Tire & Auto Inc. dba The Tire Choice caters to upscale customers in affluent Florida towns like Naples. Quapaw, Okla.-based Burggraf Tire Service's customer base is more working class than The Tire Choice’s clientele. Moosic, Pa.-based Jack Williams Tire Co. and Lakewood, Calif.-based Allen Tire Co. say they cater to just about everybody. All four dealerships, however, offer nitrogen inflation at their outlets. And all have become experts at marketing the service.
Nitrogen is an easy sell if you know your customers, says Dusty Karnes, Burggraf Tire's vice president. Here's a look at how each dealership promotes the service.
On the high end
The Tire Choice co-owner Dan Hennelly says he carefully studied nitrogen before test marketing the service at one of his stores eight months ago.
The experiment was successful and The Tire Choice now offers nitrogen at most of its outlets using Nitrofill equipment.
Tire Choice salespeople tell customers that nitrogen will lengthen the life of their tires and reduce air loss, "but the biggest benefit is fuel savings."
Hennelly reports that nitrogen also has helped improve customers' perception of tire pressure monitoring systems.
"Because nitrogen molecules are larger than oxygen molecules, you have less air loss." Less air loss means tire pressure warning lights flash less frequently.
Tire Choice uses direct mail (75% of its total advertising) and cable TV to advertise the service. "And we're selling it to a lot of oil change buyers. When they come in we ask, 'Have you heard of nitrogen? We offer it and some of our competitors don't.'"
The company charges $39.95 to fill four tires with nitrogen. The tires can be bought anywhere. "We did some market research with our competitors" before settling on that price.”
A number of new car dealerships in the upscale communities where Tire Choice operates sell nitrogen at $60 per set and up.
"Pricing elasticity is largely driven by the demographics of your market. Most of our customers are in high-end areas; they're educated about nitrogen. We'll have customers drive in on their BMWs and say, 'Can I get it for my tires?'"
When a sale is made, Tire Choice registers buyers at Nitrofill's Web site, www.nitrofill.com. Nitrofill will later send buyers an e-mail reminder urging them to return to Tire Choice "to have their nitrogen's purity level checked. This restores their confidence in the products' benefits."
Tire Choice also targets commercial accounts for nitrogen inflation.
"I've never had a customer satisfaction issue with nitrogen."
Different price points
Dusty Karnes, vice president of Burggraf Tire Service in Quapaw, Okla., also reports that nitrogen inflation is boosting his company's bottom line.
Burggraf Tire started offering nitrogen five months ago at three of its five retail stores. (The remaining two are expected to offer the service by the end of the summer.)
The dealership charges different prices at each store. "At our store in Miami, Okla., we charge $6.50 a tire," says Karnes. "At our Atlanta, Texas, store, we charge $7 a tire." Both Miami and Atlanta are small-town markets.
In Joplin, Mo., a much bigger town, Burggraf Tire charges $29.99 "for the whole package -- all four tires. It's small town versus big town. In a small town, $29.99 seems like a huge amount."
Either way, the service has taken off. "In Miami, we filled 150 tires with nitrogen within the first six days of selling it."
Burggraf Tire's start-up investment for three Parker Hannifin Corp. nitrogen machines totaled nearly $8,000. "The Miami store almost has the equipment paid for," says Karnes. The other two stores are well on their way. "After that, it's pure profit."
The company has done some TV advertising to promote the service. "But right now it's been mainly word-of-mouth. We do our best to educate the public.
Farmers, he says, have been particularly receptive to nitrogen and its pressure-preserving benefits. "They have a lot of truck tires and trailer tires that sit around all year."
There once was a time when some of Burggraf Tire's farm tire customers would have cast a suspicious eye on nitrogen, he adds. "We never thought we'd see the day when they all had cell phones either!"
Jack Williams Tire sees a wide range of customers at its 24 locations. "We get doctors and lawyers, nurses and teachers," says Bob Wasileski, Jack Williams Tire's program manager. "But we promote it the same way to everybody.
“Customer acceptance depends on trust, he says. "The first thing we did when we started with nitrogen was train everyone in our shops -- the salespeople at the counter, the techs, the service managers, everyone associated with a tire -- so customers know that we understand what we're talking about."
Jack Williams Tire inflates every new tire it sells with nitrogen at no cost to the consumer. (It has installed Air Products Ultra Fill equipment at all of its locations.) However, it does list the service on its invoices.
Customers who buy their tires somewhere else can have them filled with nitrogen at Jack Williams Tire for $5 a unit, "a modest fee," according to Wasileski.
Several car dealerships in Jack Williams Tire's marketing areas charge for nitrogen, he notes. "They use it as a profit center."
This doesn't bother Jack Williams Tire. In fact, the dealership has found a way to profit from it. The company wholesales nitrogen inflation machines to car dealers!
The dealership uses a wide range of media to advertise nitrogen, including radio, TV, print and billboards.
Free but first
Allen Tire began offering nitrogen one year ago. It now gives away the service at all of its 21 retail stores throughout Southern California.
Before the company decided to offer nitrogen, its store managers polled customers and discovered that many of them weren’t willing to pay for the service, even for as little as $3 per tire.
So the dealership gave customers what they wanted by offering nitrogen inflation as a value-added service. (Allen Tire used Branick Industries Inc. nitrogen inflation equipment.)
“I’d say for the first three months, we devoted one-third of our direct mail ads to nitrogen and its benefits,” says Fred Allen III, the company’s vice president of sales and marketing.
No other major tire dealership in Allen Tire’s markets are promoting nitrogen, according to Allen. But he believes they will.
“We see it as the future. We think it’s best to do it now versus years down the line when everybody will be doing it.”
Selling nitrogen to trucking fleets: Beasley promotes pressure retention
Beasley Tire Houston Inc. of Houston, Texas, has been selling nitrogen to passenger car owners for about a year-and-a-half. It also sells nitrogen to trucking fleets and private truckers.
Customers, whether retail or commercial, respond when Beasley Tire talks about nitrogen's ability to help a tire maintain correct pressure. "When you go into a fleet and talk to the boss, you'll find he's having a tough time convincing their drivers to check air pressure," says Mike Beasley, a sales manager at the dealership. "So it's not a hard sell."
Beasley Tire also promotes nitrogen via a Parker Hannifin Corp. generator bolted to the bed of one of its service trucks. "Whenever we fill a truck tire with nitrogen, we try to get people on a mounted tire program, so they can bring their tires in here."