Are tire manufacturer rebates effective promotional tools for tire centers?
Most tire manufacturers offer consumers some form of discount on the purchase of their products. This can be an instant or mail-in rebate when you purchase a set of new tires. With prices rising and consumer budgets tightening, a discount on tires, a rarely anticipated investment, can make a difference.
This is confirmed by Maxime-Olivier Gauthier, vice-president of marketing and communications at Point S Canada. “If it’s the right tire for the right use, that discount can help close the sale. Our strategy is to combine these discounts with attractive offers for new tire installation, for example, to make the visit to our network dealers even more attractive to the customer.”
Tire and installation discounts
As Gauthier explains, tire manufacturers share their upcoming promotional programs with the network at the beginning of the year so that they can secure inventory. “It would not be attractive to advertise discounts on tires that are not available. Suppliers may also be interested in covering the cost of installing their new tires, for example. The key is to coordinate everything. We also need to make sure that the discounted tire meets the market reality of our dealers. We then quickly share that information with our shops so those offers make it to the counter.”
Gauthier says his organization is working with tire manufacturers to explore new formulas by varying discounts on purchase or installation. At the network level, consideration is being given to the possibility of offering discounts on installation a few weeks before the peak period. “We work with our merchants and don’t want to add to the traffic when the service bays are already overflowing. The goal is to attract new customers who will then return for other services throughout the year.”
According to the vice-president, the discounts are effective and fit in well with the Point S offer, which must be based above all on good advice. “We’re here to recommend to our customers the right tire for them. If there’s a manufacturer’s discount on top of that, everybody wins.”
The purchase rebate would be more effective than the mail-in rebate, which requires the customer to fill out a form and mail it in for a refund.
At Fountain Tires, a network of tire centers operating in western Quebec, Yves Richard, general manager of procurement and wholesale, explains that manufacturer discounts complement the network’s own seasonal promotions. “If the type of tire involved matches the customer’s vehicle specifications and driving habits, we will be happy to distribute this offer to our shops.” The dates when the discount is applicable are added into the central computer system so that the discounts are applied directly to the customer’s invoice. The same information is available on the retailer’s website so that consumers looking for a product can see the related discounts.
Tire inventory planning is based on past demand in the various markets covered by Fountain Tires and takes little account of manufacturer promotions. “Our catalog meets the demand of our customers and we don’t adjust it to specific manufacturer promotion requests,” Richard says. Once our planning is complete, we don’t change it.”
For the latter, the effectiveness of manufacturer rebates, which are usually mail-in rebates, is inflated when combined with the network’s seasonal offers offering, for example, a 25% discount on the purchase price of a new tire package.
Manufacturers of Tier 3 and Tier 4 tires do not usually offer a purchase discount. They tell us that these tires are available at a more affordable price year round.
In short, in these uncertain economic times when every penny counts in the consumer’s wallet, the various discount offers presented when purchasing tires are particularly attractive. Pour les centres de pneus et mécanique, leur gestion judicieuse peut attirer une nouvelle clientèle à fidéliser.For tire and mechanical centers, their judicious management can attract new customers to build loyalty.