Improving Recommendation Rates the Key, says J.D. Power

According to the findings of the latest J.D. Power and Associates Retail Tire Experience Report, improving recommendation rates amongst sales staff at independent tyre retailers is one of the most effective means of increasing market share. This conclusion was reached after compiling the results of more than 4,000 ‘mystery shopper’ telephone calls to 2,100 retail tyre locations in the US during 2008 and 2009. The report examines which tyre brands are recommended by salespeople at major tyre retailers and how effectively retailers handle telephone shoppers.

As J.D. Power and Associates notes, telephone shopping is a critical element of success for both tyre manufacturers and retailers. From information gathered over the phone, a large proportion of shoppers not only decide which store they will purchase from but also choose the specific tyre brand they will purchase prior to visiting a retail location. Prior to contacting a retailer, most customers view tyres as a commodity and have not decided on a specific brand or model. Accordingly, a tyre retailer’s sales staff hold a unique opportunity to influence brand choice in a way unlike salespeople in many other industries. Therefore, for tyre manufacturers, improving recommendation rates among retail salespeople is one of the most effective means of increasing market share.

The study found that salespeople at manufacturer-affiliated stores typically recommend a tyre affiliated with that manufacturer. For example, Firestone salespeople recommended Firestone 49 per cent of the time and Bridgestone 28 per cent. At independent retailers, however, a salesperson will often direct customers towards the brand that is his or her personal preference. This results in no single brand dominating the recommendation rates at most independents. Increasing the recommendation rates at the independent tyre retailers is thus a key metric for manufacturers desiring to increase market share.

Reasons behind a salesperson recommending a particular tyre brand vary considerably by brand and manufacturer. For example, salespeople who recommend either Goodyear or Michelin brands most frequently focus on performance and handling. However, compared to Goodyear, Michelin recommenders are nearly twice as likely to stress attributes related to quiet ride and fuel economy. Goodyear recommenders tend to focus on price, value, and special sales or promotions, compared with salespersons who recommend Michelin tyres.

According to the report, each retailer’s price quote is influenced by the tyre being recommended; it does not necessarily mean that the retailer charges a higher price when the model of tyre is held constant. But this subtle distinction is often lost on consumers who frequently look at tyres as a commodity purchase call outlets to compare prices.