Brand loyalty, which among auto owners is very great, is very weak in the tire field. Only 30% of the respondents bought the same make of tires they owned last.” Those statements are very telling, and clearly emphasize just how influential tire dealers are.
The “respondents” mentioned above are vehicle owners, which raises the question, what are they responding to?
Would you believe the 1957 Look Magazine National Automobile and Tire Survey? It’s true. At a time when retreaded tires made up one-fourth of all replacement passenger tire purchases — the Look survey was very thorough — consumers relied on their local tire dealers for help.
Perhaps the survey was the start of the 70/30 Rule, which asserts that from start to finish, tire dealers influence the tire purchase 70% of the time. The other 30% of the time the customer specifically walks in and asks for a brand (more on that later).
I find myself thinking a lot about you as I get ready to retire. The following Modern Tire Dealer mission statement has been my direction in life for more than 34 years: “to help independent retail, commercial and wholesale tire dealers increase their profitability.”
You certainly have done a great job of doing it on your own. According to MTD’s 2020 Facts Section (see page 34), 63% of the replacement consumer tires purchased in the U.S. are sold by independent tire dealers. No other distribution channel accounts for more than 10%.
Despite ever-increasing competition, you continue to be the dominant force in the aftermarket when it comes to selling tires. You are more than 29,000 dealers strong, and nearly 60% of you are single-store owners! You are the main reason why the 70/30 Rule rules.Industry data supports the 70/30 Rule. Our tire dealer surveys have corroborated its validity for years. J.D. Power & Associates, Goodyear Tire & Rubber Co., Cooper Tire & Rubber Co. and many others have, at one time or another, announced similar findings.
A 2005 survey from Virginia Polytechnic Institute and State University puts the percentage of consumers who ask for a tire brand at the point of sale at 30% or less. And the good news gets even better.
The 70/30 Rule does not take into account the influence you have on those customers asking for a specific brand. How many of them either switched to another brand or a different type of tire?
At the 2011 Goodyear Dealer Conference in Texas, Jack Winterton, then chief customer officer for Goodyear’s North American Tire consumer business, said it all while addressing the dealers in attendance. “With 85% of tire purchases directly influenced by you, our reputations — yours and Goodyear’s — are intently connected.”
That is pretty powerful testimony about your influence on not only the tire-buying process, but also the dealer-supplier relationship.
With more brands and programs than ever available to you, I don’t see your influence and leverage waning anytime soon. According to the 2016 J.D. Power & Associates U.S. Original Equipment Tire Customer Satisfaction Study, Gen X and Gen Y consumers appear to be even less likely to replace their OE tires with the same brand than older vehicle owners.
As I finish up my 228th and final editorial for Modern Tire Dealer, I know my confidence in your professionalism and ability has never been stronger.
I will miss you.
The late Charles Krauthammer, the well-respected journalist and political columnist, once commented on his career by paraphrasing British playwright Tom Stoppard: “You put words together all your life, and every once in a while you get them in the right order and give the world a nudge.”
When I heard those words in 2018, I remember thinking they would be appropriate for my last editorial. But unlike Krauthammer, my world is made up of independent tire dealers. I just hope I put the words in the right order enough to help grow your businesses and make your lives easier, because that was my job. And truly my pleasure. ■