If You Ran a Fleet Consuming $200,000 Worth of Parts Annually, Would You Want Your Parts Orders Delivered Through a Dealer?

The inventor Thomas Edison once said: “There’s a better way to do it – find it!” Now, think what that might mean for heavy truck and heavy equipment dealers. Their customer base isn’t the individual auto owner, but is dominated, instead, by large fleets that perform their own maintenance. Some of the fleets they serve can be really big - at a heavy truck dealer, it isn’t unusual to see the top 10 customers accounting for 50% of the dealer’s total parts sales volume. As a result, heavy equipment dealers sell more parts over-the-counter than in the service lane; the opposite of auto.

There are also two general “flavors” of fleet parts orders. The first is standard daily or weekly orders of fast-moving maintenance parts that replenish inventory stored at fleets’ service facilities. The second type is smaller, one-off orders for unplanned repairs. Many OEM-provided e-commerce solutions let customers store their standard orders and submit them as needed. These predictable orders typically consist of large quantities of relatively lower cost parts, like filters or brakes (i.e., not cylinder heads or clutch assemblies)

At the same time, OEMs are sending mountains of maintenance parts to dealers, who receive, sort, and deliver half of them to only 10 different addresses. Who knows how many of those parts are also stored by the dealer between receipt and delivery? The magnitude and cost of this labor must limit the amount of time and money that dealers invest in growing their business through sales development and improving customer service.

There must be a better way to do this!

The standard daily/weekly customer orders placed to dealers are prime targets for reform. Why not adjust e-commerce platforms to let customers request direct shipping from the OEM for qualified parts and orders? Fleets would need to be reminded of the slower order response time for the parts shipped from the OEM depot rather than their dealer. Perhaps pricing could reflect this. Regardless, dealers should maintain the pricing, billing, and customer relationship. The OEM would simply execute the delivery of the large order on expanded DDS/LTL routes.

Suggested Order Flow  

Suggested Material Flow  

A shift like this could drive a host of other benefits. Dealer inventory investment and capacity could be shifted towards adding breadth and lowering depth to reduce lost sales – RIM programs should be leveraged to help execute this adjustment. The change would also reduce the labor required to get parts to the same destination, and it would limit damage opportunities. OEM inventory management could benefit, too, as more visibility to end consumption demand improves forecasting accuracy. Smoother and less “lumpy” outbound demand could also improve inventory planning and operations.

But there are risks. Fragmenting delivery points typically increases total delivery costs. And, while dealers would save on labor and inventory costs, OEMs would take on incremental transportation costs. Terms and Conditions would need to be thoroughly reevaluated to ensure that customers, dealers, and OEMs each benefit from the changes.

As always, change management is a major undertaking. This strategy could have the unintended consequence of hurting the dealer-customer relationship if it is used to reduce, rather than refocus, customer contact. Dealers would likely resist ceding this aspect of their business to the OEM, as well.

Bottom line: The end of the supply chain (dealers) that serves the largest and most sophisticated fleet customers is generally unsophisticated and inefficient for those fleets’ routine orders. The advent of online parts ordering for fleets gives OEMs and dealers an opportunity to improve service, potentially reduce costs, and support the evolution of parts managers from being order managers to becoming sales managers. It is only a matter of time before someone tries this.

Inside an IRF

I know a guy who runs an independent repair facility – a good one at that. He and his team of technicians (mostly former dealer employees) work primarily on European imports, doing everything from oil changes to complicated engine rebuilds. They have invested significantly in diagnostic equipment and special tools, and buy mostly OEM parts from local dealers or OES (Original Equipment Supplier) parts from WorldPac. Not your average local garage, but interesting nonetheless.

These guys make a living by stealing business from dealers. Actually, they would probably resent the term “stealing” – as they do little marketing. Rather, they provide an outlet for dissatisfied dealer service customers, who flock to them in droves after their warranties expire.

How are they able to do this? They don’t have many Yelp reviews and aren’t smart about Search Engine Optimization. They don’t have a fancy waiting room. They don’t have nice loaner cars. They don’t offer online appointment scheduling. They aren’t open late or on weekends. They don’t charge less for parts. They don’t even have a significantly lower labor rate than area dealers. Nevertheless, they do have a loyal following and, through word of mouth, continue to conquer new customers every day.

So what is their edge? When asked, their customers say things like “better service” and “lower cost.” On the surface, these are head scratchers, since most dealers (particularly of European brands) provide more amenities and what would be considered higher service levels. Then there’s the price issue – again, this particular IRF charges his customers dealer list price for parts and has a similar labor rate. Hmmm…

When I presented this data to a customer, he accused me of being naïve (“Dealers have higher overhead, so they need to charge more”). To reinforce his point, he told me about his last experience at a dealer. He went in for an 80k mile service – he dubbed it “a glorified oil change” – which cost him far more than the $60 he pays for an oil change at the IRF. Not exactly an apples-to-apples price comparison, but it does illustrate a fundamental perception issue that plagues our business.

Of course, the folks at this IRF do many things well – they take a long view of their customer relationships and never do a hard sell for additional repairs. They remember names of their customers’ kids, “squeeze people in” without appointments, and sometimes perform basic maintenance “on the house.” They cater their approach to the individual customer, always delivering the right level of technical explanation and friendly conversation. They also have some structural advantages, such as extremely low staff turnover.

Bottom Line: We know there’s no silver bullet that will change customer perceptions overnight, but the stakes are high, and we need to keep a pulse on customer attitudes and react accordingly. For research and thoughts on how to tackle some of these challenges, check out our MyGuy website: http://www.my-guy.com

Service to Government-Owned Vehicles – Avoiding Risk While Preserving Opportunity

In the search for new revenue streams, why not go straight to the greatest source of wealth – the government? Local, state, and federal governments own over one million vehicles, which presents a huge opportunity for whoever services them. Unfortunately, doing business with government at any level isn’t as simple as firing up a great marketing campaign. For one thing, governments perform a great deal of fleet maintenance in-house or outsource it to fleet services providers; for what business remains, competition is high. Weigh the pros and cons of competing for government work—then decide if it is right for your organization.

To prevent fraud and favoritism, governments must ensure fair competition for products and services. Complex oversight rules often mean lengthy competitions – understandable if a billion-dollar missile system is on the line, but not if the service is an oil change or brake job. To speed up small purchases and avoid the long contracting process, governments often create “preferred vendor lists” of preapproved service providers.

Preferred vendor lists may sound like miracle water to a service provider looking for more business, but these lists are not a cure-all. The federal government does so much business through large fleet maintenance contracts that little revenue flows to the five pre-approved service providers. Moreover, a $15,000 minimum investment is required to gain placement on the federal preferred list (GSA Schedule 23 V). In the end, the potential gain hardly seems worth the effort.

Getting on state and local preferred vendor lists presents more opportunities for business and requires just a few days of paperwork. In exchange for a new source of revenue and a great marketing tool (“The township trusts us with their vehicles…trust us with yours”) expect to provide some concessions. As you fill out the price lists and forms, be aware of a few factors that may not be clearly stated:

• The rates you provide will be expected to apply to all vehicle types.
• Very few preferred lists differentiate between vehicles or vehicle types. This means that the $80 A/C service on your price list must apply when the government brings in a vehicle requiring two hours of labor.
• The government will expect a discount over your current rates – and then another discount on top of that.
• The government always expects to be the “most favored customer” and, as a result, expects better rates than your regular customers. You’re also competing with others on the list, so don’t give up your entire margin when you create your price list. You may need to provide another discount further down the line.
• You may be forced to guarantee a service turnaround time.
• Service turnaround guarantees can be especially risky if the government drops off multiple vehicles at one time. Don’t expect them to give you any leeway.
• You may be paid late.
• The government always pays, but it frequently pays late. Keep close track of payments due to ensure you get paid.

Bottom Line: Becoming a preferred vendor for the federal government may not be worth the investment. On the other hand, the potential profit from state and local governments can justify up-front costs—if you’re mindful of those unwritten rules.

Customer Sentiment Survey – Why Are Customers Switching?

This week we’re taking an in-depth look at the switching issue. We’ve already analyzed switching trends by demographic segment, but it’s important to focus on the reasons. A customer who “switches” to a service chain because her car broke down nearby is different from a customer who switches because he felt his dealer was dishonest.

Carlisle’s Consumer Sentiment Survey identified six main categories of reasons for switching:

1. Location: Going to a closer/more conveniently located provider
2. New/Unforeseen Circumstance: Vehicle broke down, was on vacation, etc.
3. Price: Found a cheaper provider or used a coupon
4. Service Quality: Unsatisfied with quality of service, technician’s attitude, perceived up-selling, store schedule, etc.
5. Availability of Parts and Expertise: Service provider did not have the part or was unable to perform the job
6. Trust/Word of Mouth: Followed recommendation of friends/family, perception that another provider is more trustworthy

The chart below shows the percentage of customers who cited each of these six reasons in the combined 2012 and 2013 surveys.

Of these six categories, two (Location, Circumstances) should be classified as “unavoidable,” since they are out of the provider’s control. If your car breaks down while you are vacationing or if you move away from your provider, chances are that you will have to pick a new provider. For the last two years, 33% of customers who switched fell in these categories. Since these “unavoidable” reasons are unpredictable, we would expect this figure to change year-on-year.

The remaining 67% are customers who switched for reasons of Price, Service Quality, Availability of Parts/Expertise, and Trust. These “controllable”reasons are related to a provider’s performance (whether in marketing, quality of service, schedule, etc.). This 67% is our focus.

Analyzing the “controllable” reasons will illustrate the dealers’ problems. Overall, 22% of all customers who switched providers, ended up switching to the dealer. However, if we look only at those who switched for “controllable” reasons, then the percentage of customers switching to the dealer drops to 19%. Why is this happening?

As you might expect, customer perceptions of price drag down the numbers. 38% of customers switched based on pricing, and in 2013 only 5% of these customers switched to a dealer. This was a four point drop from 2012, meaning the situation is getting worse.

The numbers might appear better when we look at the other “controllable” reasons. In 2013, we see a two point improvement in the number of switchers choosing the dealer for these reasons. Yet, it’s troubling that dealers only attract 36% of switchers in categories that are more likely to be considered dealer strengths.

Bottom Line: Dealers attract only 19% of customers who switch for a “controllable” reason. Customers looking for lower prices will rarely switch to a dealer. Finally, dealers have not been able to capitalize on their areas of perceived strength, such as service quality and availability of parts/expertise. Why is this happening?

Bits Instead of Atoms

Objects, like car parts, are made out of atoms. So are warehouses, trucks, and the fuel that powers them. Reactionary repositioning of these atoms could be costing the motor vehicle service industry the better part of $300M / year – more about that in a moment. Information is composed of “bits” – those little ones and zeroes that can describe numbers, words, pictures, music, and movies.

A couple of years ago, Marc Andreessen, the guy who helped build the first web browser (Netscape) and is now a notable venture capitalist, wrote a WSJ op-ed called “Software Is Eating the World.” Unfortunately, that article now lives behind the Journal’s pay wall, but Wired editor Chris Anderson sums up the idea: “Software eating the world is dematerialization, in some sense: … sectors of the economy get transformed into coding problems.” In short, our increasing ability to obtain and analyze information (bits) is changing how we interact with the physical world (atoms).

This can happen in a few different ways. Software can help us use resources more efficiently. One example of this is the growing sharing economy. For example, ZipCar’s founder claims that every car it puts into service replaces 15 vehicles.

Software (plus a little hardware) can also reduce our need for physical objects. The obvious example is the smartphone. My phone has replaced my need for: an alarm clock, a camera, a video camera, a music tuner, a GPS device, a Walkman (did I just age myself?), a newspaper, an address book, a calendar… and that list is not complete. Not convinced? How about the fact that since 2011, Amazon has been selling more Kindle books than physical books? Or that today’s 16 year olds aren’t so concerned about getting driver’s licenses because they conduct their social lives through their phones? "The Internet has made the freedom that comes with a license anticlimactic."

So, bits are replacing atoms in our economy and our lives. What does this mean for motor vehicle aftersales (beyond leading to a possible long-term decline in vehicle sales)?

I can think of a few things.

• Remember how Amazon drove Borders out of business? Amazon’s interface for ordering car parts has improved in recent months. It’s still not an amazing buying experience, but it’s getting better. And a lot of parts are available on Amazon Prime- next day delivery for $4 a part, or 2nd day for free. We’ll talk about this at our next Digital Summit.
• We fly a lot of parts around in planes, burning a lot of fuel along the way; a lot of atoms, and a lot of cost. Our NAPB members collectively pay over $300M a year for air shipments. In many cases, if we had one or two more day’s notice, we could ship these parts on the ground. Currently, the rule we use for stocking parts at dealers and warehouses are fairly crude: we stock based on forecasts that are driven by what happened last month or last year. If Target can figure out if a girl is pregnant before her family did, and Obama can use predictive persuasion to win an election, maybe we can start forecasting demand using methods other than looking in the rear view mirror?
• Closer to home, the next version of Optricity’s OptiSlot slotting software will allow stock managers to identify which parts are often purchased in the same order (like rotors and pads), and stock these parts closer together in the warehouse, while also obeying a host of other optimization rules. The benefit is increased warehouse productivity. We’ll be learning more about state of the art slotting software at the NAPB Warehouse Technology Roundtable in late April.
• Progressive has collected data for over five billion miles driven through its SnapShot program, and used this information to construct improved automotive insurance risk models. This data has value; Progressive offers discounts of up to 35% to drivers that it has identified as low-risk. Says Progressive, “The predictive power associated with driving behavior is more than twice as powerful as the second most powerful variable, which is driving record points.” Most other automotive insurers have similar programs, called Usage Based Insurance (UBI). The leading UBI provider in the United Kingdom measures whether you “Drive Like A Girl.” And State Farm’s In-Drive service takes matters further – the device it uses to monitor driving behavior can also provide emergency assistance, remote monitoring of vehicle location (“Stop losing sleep worrying when your teen is out with the car”), and even “monitor safety and performance with diagnostics.” It’s a plug-in telematics system.
• Along the same lines, the U.S. Dept. of Energy (DOE) recently ran an “Apps for Vehicles” contest, the goal of which was to “demonstrate how the open data available on most vehicles can be used to improve vehicle safety, fuel efficiency and comfort.” Winners included: Dash, myCarma, Green Button Gamer, and Fuel Economy Coach. All of these apps rely on the same basic idea: Combining a smart phone with a wireless OBD-II plug-in provides a stream of actionable data that can help people drive safer and more efficiently. Of the start-ups listed, only Dash talks about using the data stream for vehicle diagnostics, but that’s the next logical step.

My question for the reader is: why are we letting insurance companies and start-ups capture all this great on-the-road vehicle information? I can understand letting the start-ups figure this stuff out, and then buying one of the winners, but that wait-and-watch approach is less effective with insurance companies.

After we sell a vehicle, we want to stay engaged with the customer. But, if their cars are reliable (and we sure hope they are), we’ll only see them once or twice a year. Meanwhile, we know they don’t visit the Owner Center portion of our websites very frequently; they just don’t have the need. Similarly, the only automotive-related phone apps that have any traction today are gas price references like GasBuddy. But, when you pair an OBD-II reader with a smart phone, you have a rich, dynamic stream of information that vehicle owners can take action upon. Others see the value in this data, and are racing to acquire it; why aren’t we?

The bottom line: Software is eating the world; bits are becoming more important than atoms. This trend poses threats (read: AMAZON) and opportunities (read: CUSTOMER ENGAGEMENT) for our business. The consequences of not reacting to this trend are obvious; just ask the management at Borders.

Mustard & Mayonnaise

Accessories are a tough nut to crack – selling them effectively in a dealership requires coordination between Parts, Service, and Sales. Easier said than done. So when an aftermarket company offers to take all of the hassle out of managing this part of a dealer’s business, it’s a pretty compelling proposition.

I’m talking about Vogue Tyre, an aftermarket wheel, tire, and accessories company. Vogue currently targets select luxury brands such Cadillac, Infiniti, Lexus, and Mercedes.

You can find Vogue products at tire retailers such as Discount Tire, NTB, and Belle Tire, and also at select new car dealers. These new car dealers are called “Custom Centers,” where the dealer essentially outsources management of his accessories business to Vogue.

Here’s the Custom Center business model:

• A dedicated, on-site Vogue Tyre sales manager directs the Vogue business within the dealership.
• Inventory is owned by Vogue – some is stocked at the dealership, and some is off-site nearby.
• Vogue technicians perform accessory installations, repairs, and replacements.
• Some accessories are pre-installed – OEM pre-installed accessories may be removed and credited.
• Dealers receive a margin on each sale (typically higher than the margin they earn on OEM accessories) as well as an additional rebate; dealer staff are also spiffed for sales of Vogue products.
• Returns and warranty claims are seamlessly handled by Vogue.

Essentially, no one at the dealership has to lift a finger as far as accessories go, and they still see a payout.

Needless to say, they’ve nailed ease of doing business. For dealers, it’s low risk, high reward. You’d be hard pressed to find a Custom Center dealer who doesn’t have positive things to say about his relationship with Vogue. Contrast this to dealers’ comments about dealing with OEMs on accessory-related issues (if you haven’t already, you may want to take a closer look at the results of our most recent Accessory and Parts Manager Satisfaction Surveys).

OK, so dealers love Vogue. But what about end-customers?

Vogue Tyre checks all of their boxes too, offering the right product styling and variety, promotion, and price. In fact, the signature yellow and white sidewall on Vogue tires – dubbed “Mustard and Mayonnaise” – regularly makes its way into rap song lyrics. And, as we discussed in a previous blog, Vogue’s website provides slick build-your-own functionality that helps customers envision what their vehicle will look like after it has been “Vogued out.” Within Vogue’s target market and current brand focus, many customers actually seek out Vogue accessories—others are easily convinced by the flashy displays.

Bottom Line: Vogue Tyre is fairly small, and focuses only on a few brands. So, the sky’s not falling for OEM accessories, but it could be if a Custom Center-like business model takes off on a larger scale. Vogue has set the bar high, offering top-notch service to dealers and products that customers covet. In deciding how to manage their accessories business, dealers will naturally compare and contrast a Vogue-like company to the OEM – how will you stack up?

Service Operations Technology Roundtable: Five Leading Firms Gaze Into The Future

We assembled the “A-Team” a few weeks back to talk about the future. Who participated? The best-of-the-best: seven executives from five leading providers of technology and strategy to OEM dealer service operations.

We spent two hours at dinner and three hours in a separate discussion session. Honestly, we could have gone on much, much longer. However, the picture that emerged was quite simple – I summarized it below in a bit over 1,000 words.

The chains are emerging as the winners with their simple business models, huge media spend, and demographic attraction

 Automotive dealers have now retrenched to a service market share that could be generously posted at 30%. Over time, they have lost most of the maintenance business to independents and chains – most visible is Quick (fill in the blank) operations. The repair business still favors mainstream dealer quality and care versus independent repair facilities (IRFs), but chains, like Firestone and Goodyear, are making huge inroads here.

We’ve been conducting a Customer Sentiment Survey in one form or another since 2006. In 2013, we noticed sizeable satisfaction and “switching” gains by the service chains. A lot more customers were switching into the chains than switching out. The shift to the chains was quite troubling, so we talked about this at the roundtable.

The preponderance of evidence indicates that the biggest threats to dealer service operations are the service chains … like Firestone and Goodyear. They provide McDonald’s-like service to customers that stresses simplicity and repeatability, rather than accuracy. Service customers want trust, value, and convenience. They are spoon-fed this diet from the chains with their huge media budgets, density of locations, and McDonald’s-like service.

Traditional dealers must become more McDonald’s-like and chain-like to survive. Blake Price gives them five years to transform, or become irrelevant. His reasoning is that the auto maintenance market has already been commoditized and is now sustainable at modest margins. Dealers tend not to want to play in low-margin sandboxes. That leaves the no-to-low-win repair market, much of which has also been commoditized. Blake sees this – it is either change or die.

He is right. Firestone, Goodyear, and their brethren spend hundreds of millions in media; just have a look: http://www.youtube.com/user/FirestoneAutoCare http://www.youtube.com/watch?v=6DLFL4EthkE . This is scary. All of this spend is focused on a product that fits all OEMs, versus OEM service spend that is relevant to single OEMs. If you are a GM vehicle owner there’s about a 25% chance that the media you are looking at is relevant – that’s as good as it gets for OEMs.

Further, consider the changing service customer perspective. Dealertrack monitors demographic tastes and has been focusing on the new millennials. When millennials are asked what they desire, owning a car is fairly low down the list; topping the list is social media-enabling technology. Customers are no longer passionate about what they drive. Zipcar gets it – convenient, affordable, shared transportation. Firestone and Goodyear get it too.

 There are several roadblocks in front of the OEMs that might make service maintenance extinction a foregone conclusion.

 Amazon and Zappos have emerged as the relevant benchmarks for buying experience and problem resolution. Why? They understand that the game is all about no-hassle simplicity. Again, the chains get this. But, there are huge roadblocks in front of the OEMs. First, service advisor pay-plans stand out as a kill shot. We recently hosted a focus group of top service managers and discussed this. Service advisor pay typically has a commission component; they are paid to load up repair orders with things like flushes, and to “manage” the customer feedback to make sure they get “all 5s.” There is nothing evil or sinister about this, the dealer just wants high service profits and the OEMs want high satisfaction scores. Thousands of dealer service advisors do this quite independently – make that the lion’s share of all service advisors. OK, good service managers spend a fair amount of time monitoring this feeding frenzy and try to keep it inside respectable boundaries. But, they are swimming against the tide in their own shops. The chains know this, and so do the service customers who admire Amazon and Zappos.

The second set of roadblocks are the initiatives and programs that each OEM launches to fix the service experience. Each OEM’s grab bag of improvements is different. And, each grab bag contains dozens of separate programs, none of which fixes the service advisor pay plan “iceberg.” With dozens of things to do, all having competing high priorities, no single most important thing floats to the top. Worse yet, in a recovering automobile market, the dealer and OEM’s attention typically goes to the glamorous side of the business – the showroom, where they sell vehicles with totally acceptable paper-thin profits.

 In the short term, “MyGuy” (http://www.my-guy.com) service principles can maximize dealers’ current operations with minimal investment. However, the reality is that the tide will eventually push the survivors into chain-like systems with big investments and high technology; it’s already happening. The service advisor will simply be an order taker, selling from a menu. What’s the role of MyGuy in this world? It will be the difference between a 7-Eleven and Trader Joe’s – market share based on personal preference. The key is to lay the foundation now, so that you come out with superior performance and reputation.

So, can dealer service operations become more chain-like?

Yes. In fact, that’s all Blake Price does at SOS. Consider Dealer Tire – they have transformed dealer tire businesses during the past decade and proved that you can regain hopelessly lost share. And, that you can do this out of the current dealer footprint. It is all about people, leadership, and “feet on the street” – real human beings working with dealers to transform their tire business. OK, it’s also about lots of local warehouses and leveraged purchasing agreements with tire manufacturers to support these dealers.

So, yes, it can be done and there is ample proof of this in the market. Dealers can evolve their business models to make them more compatible with service customer expectations and preferences, and, by doing so, become more competitive with the service chains. They can build it.

The trick is getting the customers to come

This should be the easy part, because it involves technology that favors the OEMs. Replacing the traditional service advisor is the de facto role of telematics. This is where companies like Agero and OnStar shine. The vehicle diagnoses what’s wrong, what to do, and where to go. OEMs pay for roadside assistance; Agero’s Cross Country is the market leader here. All the tows should go back to the dealer for maintenance and/or repair. The major limitation here is the handoff to the very human dealer service advisor.

Appointment scheduling? Xtime is the market leader here, but there are others. Service customers can be funneled into web-based dealer service scheduling from a variety of sources – the most prevalent today are the scheduling call centers. Once customers have been funneled into the dealer service line, mobile tablet-based technology can help deliver a more desirable McDonald’s-like experience, stressing simplicity and repeatability versus accuracy. This helps control the adverse effects of avaricious SA pay plans. (Xtime's “ServiceTab” enhances the accuracy of check in and diagnosis by capturing information digitally and imposing discipline on the check-in process. It captures images with its built-in camera and can record strange sounds so the technicians can hear exactly what the customer hears. It's a pure win-win.)

There’s more. Dealer wholesale programs, performance terms and conditions, and RIM. All these programs and technologies support having the service-parts in the market in time to meet demand. All of these must interact with the dealer’s dealer management system (DMS) technology. Historically, DMS providers have been notoriously difficult and expensive to deal with. Not so with Dealertrack’s cloud-based open platform. The dealer’s investment in computing power is now shared with other web-based customers, and integration is like hanging a hammer on a peg board. Dealertrack has ample market share to prove that this is a viable, and desirable, alternative solution to … the others.

The trick here is integration. Nothing’s stopping this from happening. But, little is starting it.

So, what can you do with all this?

To survive in the jungle you have to understand prey and predator principles. Dealer service operations are the prey. The chains are the predators and they are getting stronger and faster. Understand that this is true and represents a call to action – the window of survivability is closing on us. Here’s what you must do:

1. In the short term, you have to become more MyGuy-like to lay a foundation based on superior service quality and experience.
2. Understand that the game will be over in a mere flash of time – you need to dream up strategies, develop them, launch them, and harvest them inside of five years.
3. Make dealer service operations for maintenance and repair more chain-like. This spans from quick-lube to quick-light repair. Ford’s Quick Lane and Dealer Tire should be your examples of future success.
4. Get onboard telematics technology and use it to actively diagnose what’s wrong, what to do, and where to go. Make it very Amazon-like.
5. Make sure you funnel all your roadside assistance tows back to capable dealers.
6. Get a technology provider to funnel service customers into dealer service shops with web-based scheduling and tablet-based service advisor inspection and concierge capabilities.
7. Support these “build it and they will come” technologies with performance terms and conditions, RIM, and wholesale initiatives that tie into the dealer DMS technology. Use Dealertrack as your benchmark for how easy this should be.
8. Ultimately, integrate all your technologies to support growth strategies – providers who “get it” are waiting for your calls.
9. Measure your success by using share-of-wallet metrics, not just gamed service customer satisfaction.