Tires-For-Life Programs?

[tnpartsguy]

I need to hear it all; Good, Bad and Ugly

[57years]

I know of a local dealer who closed up in 2005 or 2006. He had been using the "tire for life" program. He was sued (after he turned in his franchise but before he could close out his business) by the AG's office based upon a complaint. Basicly, consumer fraud as false and misleading. He settled it out for a small cash payout to all buyers who had qualifed for the program. He was lucky that most ( and I mean almost all) of his customers had signed a disclaimer of the program at the time of purchase, where they agreed to accept a lower purchase price in lieu of the TFL.

[rd3311]

JM&A offers these as well as maintance plans that can either be packed in or sold in F&I. All the SET (Southeast Toyota) dealers sell this, as well as other make dealers signed with JM&A.

IMHO, I would avoid any Brand X companies trying to pitch this to you..

[XDCX]

Originally Posted by rd3311

IMHO, I would avoid any Brand X companies trying to pitch this to you..

As I recall one of the first innovators of this concept ended up going bankrupt and left a lot of angry customers (and dealers) in their wake.

I think most customers see the "Tires for Life" program as something that's too good to be true and I doubt the program would have a significant impact on service sales or customer loyalty.

That said, I do think there's a market for a simple Rewards Program that encourages customers to come back to the dealership for their service and parts needs.

I recently switched from being a loyal Dominos customer to using Papa John's and they have a really simple rewards program that tracks how much pizza you've bought and then rewards you with a free pizza once you've hit a certain level. The program is simple, it's easy to understand and I can track it on my smartphone with their Papa John's app.

[mr4t60e]

One of my former employers (a Chevy dealership that went under in the Great Market Adjustment of 2008) had a TFL program that seemed to make more enemies than friends. I'm not entirely sure if it was underwritten by an outside firm or handled within the dealership, but it cost us more than a few customers. Part of the agreement is that the customer has to return to the dealership for ALL of their periodic maintenance services, following the schedule that the dealership has and not what is listed in the owners manual. It wouldn't be too much of a problem if they didn't try to sell a ton of stuff that really wasn't needed (numerous BG wallet flushes, spark plug clean and regap on platinum or iridium plugs, etc.). Customers would balk at paying $549 for a 30k mile service and take their car to the nearest independent shop or chain repair facility and forever thereafter we would only be nothing but criminals in the customers' eyes. When the time came for new tires, of course they wouldn't be eligible for a replacement set...you can guess how that worked out.

There was one instance back in 2007 where a guy in his 20s bought a brand new Z06 Corvette and returned for a replacement set of rear tires 550 miles after taking delivery. When the service manager refused to replace the tires due to the giant chunks of rubber stuck to the inside of the wheel wells, the owner got his lawyer involved. I think he was offered free installation of new tires and the ability to purchase the replacements at cost ($475 each at the time), but soon after his car disappeared from the service department, never to be seen again.

In any event, as someone from the service side of the business, I think the sales staff should be very careful on how they go about selling TFL (and many other add on products such as service contracts).

[XDCX]

Originally Posted by mr4t60e

One of my former employers (a Chevy dealership that went under in the Great Market Adjustment of 2008) had a TFL program that seemed to make more enemies than friends. I'm not entirely sure if it was underwritten by an outside firm or handled within the dealership, but it cost us more than a few customers. Part of the agreement is that the customer has to return to the dealership for ALL of their periodic maintenance services, following the schedule that the dealership has and not what is listed in the owners manual. It wouldn't be too much of a problem if they didn't try to sell a ton of stuff that really wasn't needed (numerous BG wallet flushes, spark plug clean and regap on platinum or iridium plugs, etc.). Customers would balk at paying $549 for a 30k mile service and take their car to the nearest independent shop or chain repair facility and forever thereafter we would only be nothing but criminals in the customers' eyes. When the time came for new tires, of course they wouldn't be eligible for a replacement set...you can guess how that worked out.

There was one instance back in 2007 where a guy in his 20s bought a brand new Z06 Corvette and returned for a replacement set of rear tires 550 miles after taking delivery. When the service manager refused to replace the tires due to the giant chunks of rubber stuck to the inside of the wheel wells, the owner got his lawyer involved. I think he was offered free installation of new tires and the ability to purchase the replacements at cost ($475 each at the time), but soon after his car disappeared from the service department, never to be seen again.

In any event, as someone from the service side of the business, I think the sales staff should be very careful on how they go about selling TFL (and many other add on products such as service contracts).

Great comments - I loved the story about the customer who was in his 20s and burned through a set of rear tires for his Z06 in 500 miles.

I agree with your assessment that TFL has probably done more to hurt customer satisfaction and loyalty than it ever did to help it. I imagine only a small percentage of most TFL customers would ever be eligible for a free set of tires and the remaining customers would think they're being scammed into buying services they don't need and the OEM doesn't require.