Tuesday, January 27, 2009

Why J.D. Power CSI Is Stupid, or It Hurts to Be In Love – The Formula

Many consumers fell in love with the power of customer satisfaction in response to one of the many 1980’s apocryphal stories of how service sells. A favorite story concerns an irate woman at Nordstrom who wanted to return a set of tires her husband bought her for Christmas. The salesperson was understanding and processed a store credit on the spot. But, Nordstrom does not sell tires. Wow. One set of 1980’s phenoms were David Power and David Halberstam. The Power David launched the first Consumer Satisfaction Index (CSI) in 1981, and The Reckoning David published The Reckoning in 1986. Book and index coupled to make another message on the power of quality and satisfaction. Nissan was coroneted, Ford debauched, and quality was king. We were in love.

Satisfaction = Success. That’s The Formula.

Due to all the press the Power CSI gets, consumers are significantly influenced by their scorecards and awards. OK, so just using data published for free on the internet, let’s take on the role of customer advocate and check J.D. Power CSI against the critical “is it stupid” test … and see if we are still in love. Remember, from the internet (Dictionary.com), Stupid means: lacking ordinary quickness and keenness of mind; characterized by or proceeding from mental dullness; foolish; tediously dull, esp. due to lack of meaning or sense; inane; pointless: a stupid party; annoying or irritating; troublesome. JD Power releases their CSI scores to the public on their web site, and you can get motor vehicle sales from a bunch of places – Automotive News is the best site for this . To check out The Formula, last year’s car wreck of an industry would be a good proving ground. Theoretically, OEMs with higher levels of satisfaction should have been the least hurt.

Well, that certainly didn’t happen. When we charted the CSI numbers versus volume change we couldn’t see anything. Looks like the CSI indexes are all in the same band

and there is little differentiation between the OEMs. Hmm. Maybe we need some arcane transcendental statistical technique to sort the goodies from the baddies here? Certainly, that explains why Joe and Joanne the Plumber can use this sort of data to help them pick a car or truck. For example, we could have collapsed the scale on the CSI index and showed the trend in the 750 – 1,000 point band. (This is what we call the Alaskan “Joe 6-Pack Chart”, you know, where Joe/Josephine charts decibel-ized TV-room responses during the Super bowl and concludes that beer and TV correlate with inner feelings, sensitivity, care, and tenderness – it’s the little chart sitting in the lower right corner of the big chart above.) Nah, nothing there.

Here’s another way of looking at these numbers. This chart below plots the change in OEM volume from 2007 to 2008 versus the change in JD Power CSI. The theory here is that change in satisfaction is the real explanation behind The Formula. Nah! The OEM who did the best, volume-wise, actually went down in CSI. There is no visual pattern here that supports The Formula.

OK, we need to keep looking.
In the chart above we plotted CSI changes versus market share changes from 2007 to 2008. The OEM logos on the circumference of the scatter plot are sitting near or behind their data points. OK, there’s no visual correlation between satisfaction changes and share changes, but the plot does confirm Bob Lutz’s first three laws of automotive success: (1) PRODUCT, (2) PRODUCT, (3) PRODUCT. Happy Happy OEMs had great small car product; Happy Shrinkers had too much truck and SUVs in their product lineup; Unhappy Prosperity OEMs had product that the recessionary market really wanted; and, Sad Sacks were truck makers and yesterday’s The Formula poster children. Hmm. Looking back a decade ago, Toyota was above average in CSI, the highest score was not over 200, and the range of high to low was more than 2 to 1. Now, Toyota is below average in CSI, there is a 1000 point scale, and the spreads of the scores is much narrower. Does this infer that the secret to Toyota’s success is something they learned from interrogation techniques practiced by 24’s Jack Bauer?

Does this mean that The Formula is kaput? No. We need to use our commonsense on this one. It is human nature to spend more time with people and services that make us satisfied than with those people and services that make us unsatisfied. This works for restaurants, hardware stores, and motor vehicle companies. So we know that The Formulas is real. So, why can’t we prove this with all this brand name data? It probably means that the brand name measurement of customer satisfaction measures something else. But it is no longer a helpful tool in achieving success though real, tangible, and relevant customer satisfaction. My guess is that there are loads of senior executives at the OEMs who don’t know this. Otherwise, they’d be taking out their cost cutting hatchet and lopping off some dead limbs. Many missed the ball over the past decade and started to compete in J.D. Power’s backyard of abstract CSI scoring rather than, quite brilliantly, like Toyota in the showroom.

So, what can you do with all this?
We need to be stronger advocates for change when we see something stupid that costs us a lot of money and makes us behave irrationally. In terms of CSI, we need something different - something that works. We need something that measures “satisfaction” attributes explaining why customers do not buy stuff from dealers and why they defect.
  • We need satisfaction data from a valid sample of customers who aren’t paid a dollar to fill impossibly long surveys.

  • We need to have a balanced sample of customers that does not overly represent folks who are angry and have an axe to grind.

  • We need to ask the fewest possible questions on the survey that accurately represents their satisfaction and gets to why they are not satisfied.

  • We need to ask customers if they are going to continue to come back to dealers for service and, if they say no, we need to understand why in actionable terms.

  • We need a process that is responsible to the “whys” of the scores. For example, why is Toyota so successful while losing competitive ground in CSI over the past 10 years?

OK, so if you have the internet, love data, and don’t mind questioning “common knowledge”, it really doesn’t hurt to be in love. It allows you to fess out those Jezebel concepts out there. Hey, it’s a recession and now’s the time to clean up shop and not merely follow the crowd to the slaughterhouse.

Question for Blog Readers from David Carlisle: It takes us about 40 man-hours each week to publish these blogs, and we need to know if it is worth it. Do they make a difference? Are they helpful? What should we be doing with new topics? What should we be doing differently? I have very thick skin, so I can handle tough feedback. Please take a few minutes to tell me how we are doing. Click here to email me feedback. david.carlisle@carlisle-co.com

Note: All of the CSI data used in the analyses in this blog were published by J.D. Power and Associates on their web site, which has free public access, and/or downloaded from internet newspaper sites.

Tuesday, January 20, 2009

The Do & Don’t List: Recessionary Swiss Steak for Service Retention

Many Baby Boomers have eaten Depression-era food made by parents who tasted tough times. Swiss Steak was one such item on the menu. Basically, it is the absolute cheapest cut of beef (very close to shoe leather) hammered to tenderness, served in a rich cream-like sauce, and cooked forever in a pressure cooker. Cheap & delicious. It worked.

Last week Jay Cremins wrote about service retention from a dealer’s perspective. This week we’re going to talk about what to do in this crummy economy. We need a little Swiss Steak thinking in service retention. What’s cheap, delicious, and works? Here’s our short list.
  1. Change the satisfaction surveys – You can’t manage what you do not measure, and gamed satisfaction surveys mostly measure how good dealers are at out-foxing satisfaction scores and factory incentive plans (and factory disincentive plans).

    • Start with what you really want to measure. Does the customer intend to return to the dealer for service? Why or why not? Does the customer recommend the dealer for service? Why or why not? If we want to influence loyalty, shouldn’t we be investigating loyalty rather than satisfaction?

    • Correct for dealer gaming. This is simple. The survey (or surveyor) should state that the survey results will remain private and not be shared with the dealer. The first question on the survey should ask if anybody at the dealership mentioned how important the survey was to them. If more than 20% of the surveys for a dealer come back with the first question checked “yes”, then drop all CSI support to the dealer in question. We call this a truth quarantine – if you want the truth about what John Q. Customer thinks, you need to quarantine him from the dealer.

    • Reconsider whether your considerable investments in splashy concocted CSI surveys are worth it. They are very expensive and support a phony foundation for satisfaction measurement, management, and improvement. This is completely logical. If Toyota can consistently be mid-pack in CSI performance and still be the richest car company in the market, with enviable service retention rates, then it calls into question the validity of the big name-brand surveys.

  2. Bust the price myth – Jay said to do this at every opportunity. The idea here is mostly to buy some extra ink and electrons to get the right message out.

    • Customer education. Provide a downloadable PDF file on your internet site that makes a compelling case for this with facts and figures.

    • More customer education. Have a separate “button” on your web site that takes customers on a facts and figures educational tour … its OK if the media goes here too.

    • Even more customer education. Include Barbasol-billboard type service retention customer communications on all customer service communications.

    • Dealer education. Provide “How to Bust the Price Myth” dealer education videos on your dealer website and incorporate in all factory-dealer assemblies (ubiquitous, like the safety-first videos and slides).

    • Did we say “education?” Include educational marketing materials about pre-paid maintenance plans, with price comparisons of local competition for new and used vehicles.

    • Got Milk? Conduct national cross-OE, OE-sponsored campaign to promote the dealer channel: times are tough; have your vehicle serviced by the people who built it … and save some money! (Why should only the PepBoys of this world have the economic advantage of marketing to all brands?)

  3. Call in the cavalry – Jay also mentioned to call in the cavalry to work with your best dealers on improving service retention.

    • Forget symmetry! Consider asymmetrical dealer-to-field staff assignments, and asymmetrical curriculum-to-dealer assignments (for example, put more reps on the metro and high volume dealers to get the most bang for the buck). This also means assigning your best reps to your best dealers – put good money after good rather than good after bad.

    • Laser-beamed training. This means re-focusing outside dealer trainers to spend more hours with high-potential dealers.

    • Give them the right weapons. Arm the field force with data about dealer service retention performance (annual customer pay “CP” sales per UIO, at the minimum CP sales per visit) compared to relevant regional benchmarks. Use cheap IT to do this rather than line the pockets of your integration firms (by the way, why do they call them “integrators?” – mostly they seem to be experts at integrating bank accounts – yours flowing to theirs).

    • Identify your warriors. Identify and focus on the dealers that are willing to change and fight the battle.

    • Showcase your heroes. Use dealers that have changed successfully to convey the message to others.

    • Commitment is key. This means showing dealers that the programs are here to stay, with great factory field support, and benefits to the dealership bottom line. Based on our field experience, we’ve found that dealers generally think that factory programs are temporary. Dealers see factory “change agents” once or twice, hear nothing about it from the field, and think the program is over. You need a strong focus on continuous contact to mitigate that aspect of their enrolling in the program.

  4. Show me the money! – Somebody needs to run the numbers and show dealers what a lost customer means to their profitability and cash flow. Develop a model that shows dealers the revenue and profit implications of moving back-end service from great-to-good satisfaction.

    • Show and tell. Put the interactive model on your dealer web site; equip your field organization with this tool; put it on each dealer’s performance review.

    • Push cheap eats. Focus dealers on the cheapest top things that customers think dealers should do for them. Have them understand that they should step up to the plate on their own, and that it is a good financial investment.

    • Show them the money! Send dealers monthly e-mails on what one more point of service retention would mean to their bottom line.

    • Show them the waste! Statistically analyze service reminder effectiveness and focus spending on what works best. Stop doing things that don’t make quick money for your dealers.

  5. Just say NO! – Stop spending money on things that have the smallest paybacks.

    • Put a shiv into the slick. Defer the slick appointment scheduling systems and processes to a boom time economy. Just say no to slick web-IT that better connects you to customers who are still the victim of service advisor high 5’s.

    • Tell ‘em to see you later. Send Holiday cards to trainers and consultants who advise you to re-organize dealer service departments and personalize customer contact with service advisors who are Guinness Book of Record job-hoppers. The cards should say to stop by in 2012.

    • Leave loaners for later. Don’t cave on dealer demands for loaner car subsidies. Wait until your PE ratios become the envy of Wall Street for this.

    • Swim with the crowd. Stick with industry standard parts & labor warranties.

    • Postpone premium. Remember that “premium” as a label is now out – customers interpret this to mean extra cost.

    • Say so long to service brand costs. Don’t spend money trying to build a service brand – the vehicle itself carries the quality message.

    • Satellites are for TV, not service. Satellite service locations? Just say NO!

  6. OK, now count up what you saved and invest it in Telematics – Telematics connects the car to the equivalent of a fetal heart monitor.

    • Safety first! Remember safety sells the concept.

    • Show me the problem. Email the diagnostics report on a regular basis to owners.

    • Cheap is good; free is better. Make it free or very cheap.

    • Make it work for used. Keep the telematics transmitter on, or turn it back on at minimal (or no) cost for buyers of used vehicles.

    • Put owners in team-control with their dealers. Design telematics features that enable the vehicle owner to reduce operating costs (fuel, oil, maintenance) in concert with their dealer.

    • Increase resale values. Start to work with auctions and secondary markets to qualify and grade used vehicles based on OEM telematics-driven reports of usage and maintenance.

    • Be there for collision. Air bag deployments could trigger an OE-controlled collision value chain that could benefit owners, dealers, insurance companies, and OEMs.

  7. One last thing – OK, if you have any money left, use it to support dealer Service Advisor retention. It is critical that dealers retain and attract the best people for the pointy end of the spear.

    • Invest in Advisor training. Eddie Lee, the VW dealer mentioned in last week’s blog, says “a lot of our high service loyalty rate has to do with the writer ... people who know how to be nice and how to sell without being pushy.”

    • Redirect rewards and recognition programs from dealer boondoggles to Advisor’s pockets. This will allow the best current Advisors to make a living during the downturn and, as importantly, attract the best athletes to the service drive. Larry Peranski, a former dealer and current 20 Group consultant at ConSept Corporation (lperanski@conseptllc.com), says “having the best athletes out in the service drive is a common thread to service loyalty success stories. The best salespeople need to be out in the drive generating the big money rather than up in the showroom generating ‘mini-deals’.”

Tuesday, January 13, 2009

Service Retention from a Dealer Perspective – Jay Cremins

(With half of his 28-year automotive career in retail, Jay Cremins has been with Carlisle & Company for the past seven years. He focuses on dealer issues – in fact, he spends 100 days each year directly with dealers in training and teaching forums. Last year, Jay facilitated the Terms and Conditions session at our Parts Conference and the Dealer Employee Retention session at our Service Forum.)

In last week’s Crystal Ball, we wrote: “We need to use this recession for adding clarity and critical examination.” To a dealer (Oldsmobile is in my distant past), nothing clarifies more than a Friday morning when the cash in bank is less than the total of the payroll checks waiting for your signature. Welcome to our world.

Who will survive? I don’t know. How to survive is the real question. There’s an old joke that goes: “How do you avoid being eaten by lions? Run faster than everyone else.” In your world, this means running faster than your aftermarket and aftersales competitors. It means that we, a partnership between THE FACTORY and the dealer, must stanch the Service Retention hemorrhaging. In the short term (and the long term for that matter) The Answer (apologies to Allen Iverson) is Service Retention.

What?! We’re talking about Service Retention … Service Retention … not the game … not the game … Service Retention … What are we talking about?????? Service Retention? (apologies again to Mr. Iverson – and for those unfamiliar with this reference: http://www.youtube.com/watch?v=frsId3goYYE).Most dealers have no idea that Parts & Service are as important to you as it is to them. I didn’t. At a 1998 dinner with other dealers, I was stunned to hear this exchange.

Dealer: “Well, another record year selling Hondas. I bet Honda made a ton.”
Koichi Amemiya (President, American Honda): “Yes, part sales were very good.”
Talk about clarity. In the middle of a two decade run of consecutive record annual new vehicle sales, Mr. Amemiya was talking about the core, the money maker – Parts (and Service).

While I knew we dealer folks survived on Parts & Service (according to NADA, it has been two decades since dealers made money in New Vehicle Sales without F&I), I didn’t know it was important to THE FACTORY. Well, I have an excuse. Like Mr. Iverson, I was younger.

Recall, from paragraph one, the “critical examination” comment. People in pain make bad decisions. The trick in a cash flow crunch is not deciding where to cut budget; it is deciding where to invest your thimble-sized remnants. According to several dealer friends of mine, the best investment for THE FACTORY is a Service Retention partnership with your dealers. Why?

Help me … help you. If dealers capture more sales customers for service, we both win. When I was preparing to write this blog from a “dealer perspective,” I chatted with several current dealer friends to confirm my thinking. They all agreed, just like you would, that Service Retention is critical to success – now and later – so we won’t spend time on that point. Instead, let’s talk about how. Below you will find two ways, from a dealer perspective, that you can help me … help you. They are “Bust the Price Myth” and “Send the Cavalry”.

Bust the Price Myth

Ask a dealer at random how THE FACTORY tries to influence Service Retention and, generally, the answer is “advertising convenience – hours, etc.” Great start … but not enough; the 800 pound gorilla in the room is named Price.

We discussed the “Dealer’s Price is Higher” myth last week. Mission 1 is to bust this myth. Dealers can do this at the micro, dealership, level. THE FACTORY has to do it at the macro level.

Del Mugford (Dealer Principal, Royal Chevrolet; Richmond, Virginia) agreed when I talked to him today.

“The perception is that we are overpriced. So, we now show a flat fee rather than just a formula (.X hours at $Y per hour + $Z for parts). Our service customer sees $37 on the invoice and they think our quick service is competitive.”Eddie Lee (Dealer Principal, Lewisville Volkswagen; Lewisville, Texas) also agreed.

“We continually fight price perception.” Eddie, like Del, strategically places service price boards in the service drive, waiting lounge, and showroom. While Eddie does not include competitor prices in comparison, Del does.

On a macro level, dealers do not have the reach to convey the Price Myth-busting message and local dealer ad associations do not have the depth to figure this out; however, you do. Navigating the legal shoals will require a lot of coordination, but it can, must, be done.

Del and Eddie suggested, independently, that every service communication you send our mutual customers (all service reminders, payment due alerts, satisfaction surveys, etc.) include a Price Myth-busting message. The dealer provides the numbers. You provide the forum. Could this be the seed of one workable idea?

Whatever the range of potential solutions, we have to do something quickly – remember that we (dealers) also want to avoid being eaten by the lions. You have to help me … help you.

Send the Cavalry

Dealers, like pioneers in the old west, like the feeling that they are out on the prairie by themselves. No pioneer, though, minds seeing the dust from a company of Cavalry coming down the trail when trouble is a’brewing. In the current environment, it sure would be nice to see THE FACTORY pull into the drive. But, where are they? Well, the Cavalry is back at the Fort due to travel restrictions. We understand the need for saving money – especially when there isn’t any – but can we compromise?

Pick the dealers you really want to survive (you know the ones) and send in the Cavalry. Keep all the “box checkers” (you know the ones) at the Fort and send out those really top drawer people (you know the ones) who can help me … help you.

Acura is sending out Zone Managers (two levels higher than “the rep”) to conduct Dealer Business Plan sessions with select dealers. The objective is to identify the couple of things we (the dealer) need to concentrate on – now.

These are not your couple of things. They are the dealer’s couple of things. Usually, though, they align with your objectives anyway. The biggest Acura dealer in the country sent a note to THE FACTORY this week to say (I paraphrase):

“Hey Tony, thanks. I only really tolerated this EXCELL stuff in the past; but, this Business Planning meeting really helped. We now have a few immediate, critical objectives and plans for achieving them. Great timing.” What if one of the couple of things is a strategy to increase Service Retention? Interested? Hey, what if they surprised you by showing interest in accessories, quick service, or wholesale mechanical parts? It could happen. Would that make you happy?

Send the Cavalry. Help me … help you.

The Future

Since the blog title is “Crystal Ball,” I should venture a prediction before I conclude. Here it is … the business is cyclical (That’s right. You heard it here first.) and those who weather the bust will enjoy the boom.

Survivors will be those who created, in addition to a thousand other things like cash flow, a firm partnership with their dealers to successfully stanch the Service Retention hemorrhaging ... those who ran faster than our aftermarket and aftersales competitors.

After the chase, when a field clear of excess competition generates profit like “the old days,” we can get lazy and do this all again. In the meantime, like David said last week, “We need to use this recession for adding clarity and critical examination.”

Tuesday, January 6, 2009

What About Service Retention? - First, the Facts

Automotive dealer service market share is in the high-20% range, with Asians well above this level. Construction and agricultural companies generally have much higher service retention. Heavy truck’s retention is difficult to gauge because it has such a different business model. If you want to know all possible retention pitfalls, study the automotive industry, because there are so many moving parts to its business enterprise. Before talking about fixing the problem (next week), let’s first define it.

You start your ownership experience with buying a car or truck, and most of your dealings are with a car salesman, … who works with the used car manager to disappoint you with your trade-in value, the F&I manger to arrange financing and scare the bejezus out of you about the need for a security system, and the general manager to disapprove the deal and squeeze more money out of you. Happy times. You wait or come back to take delivery and are asked if you want to see the service department manager way out back. The salesman is checking-the-box and, more often than not, you pass on this opportunity to meet another smiling dealer manager. More progressive dealers arrange a delivery festival for you, where all those folks are waving and smiling as you drive away. Pretty much all the time they ask for “all 5’s” in satisfaction and tell you if there is any reason why they can’t get these top scores you should fess up now. When they ask this pictures of Norman Bates typically come to mind asking how you enjoyed your stay at the Bates Motel. Dealers are checking-the-box. The Psycho shower scene replays in your mind and you give them all those 5’s, because you are sure
Norman will pay you a visit for anything less. The OEMs rack up these numbers and feel good about how well customers are treated when they buy their brand new cars and trucks. JD Power works for many of the OEMs providing their Bates Motel customer satisfaction surveys, and independently rolls out their own CSI survey. They pay you a dollar to fill out a couple of hundred questions that should take about 45 minutes to figure out and check the boxes. So, they get American car buyers making $100,000 a year to whistle while they work for a buck and a quarter an hour (yeah, right … they probably pocket the dollar and zoom through the survey in 10 minutes). OEM CSI standings move up and down each year based on well, err, ah, what must be plate tectonics. Maybe that explains Porsche’s movement from 2007 to 2008. Well, that’s it in a nutshell. The automotive customer now moves into the ownership, “aftersales”, phase well prepared for battle.

It is very different for HE. Nearly everything is different. Let’s just focus on agricultural products. Traditionally, the Ag customer is either a cost buyer, a brand buyer, or a dealer buyer. Cost buyers are motivated by cost of ownership issues and make a balanced buying decision. They are like automotive-fleet customers, so let’s take them off the table for discussion. A brand buyer resembles a 1960’s vintage Chevy, Ford, or Chrysler buyer. They have a brand affinity and will stick with it. Dealer buyers are usually brand buyers and they buy from a specific dealer who takes care of them and gives them personalized treatment. Again, this buyer resembles a 1960’s relationship between rural folks and their local car dealer. Corporate agriculture and corporate construction are the big strategic issues here and are rendering traditional relationships as obsolete. Our lean production economy (thank you Toyota) and the current recession are making small corporate customers act more like the big ones. Heavy Truck is already where the other HE segments are heading.

It is important to think of customer “retention” from the perspective of failures. Why do customers fail to use their dealer for servicing their vehicles? It is mostly due to a mix of three things: (1) common knowledge, (2) residual perceptions from their vehicle buying experience (3) a multitude of choices. It is common knowledge that dealers are more expensive than independent repair facilities - untrue, but common knowledge. The buying experience is corrosive to relationship- building, trust, and a perception of value. Finally, automotive customers have a wide array of choices due to the sheer volume of vehicles on the road requiring service – approximately 200 million vehicles in operation in the US alone. With that volume, parts suppliers can make the investments to justify competing with genuine OE parts. Parts franchises like NAPA, Pep Boys, and LKQ can be formed, bought, and sold. There is plenty of volume for service specialists like Jiffy Lube, Midas, Goodyear, Firestone, and others. Furthermore, there is ample opportunity for gear-heads to grow up and own their own business where they grew up and feed off the swarm of vehicles needing repair, care, and attention. All this fattens off the same market that the 15,000 or so franchised US motor vehicle dealers feed from. Choices abound, and this (along with relationship corrosion and “common knowledge” of dealers being the high cost spread) explains most of the ~70% lost service market share for the automotive OEMs.

Let’s contrast this to agriculture. When you go buy a tractor from a dealer, you typically enter the facility through the parts counter and display area. Your dealer contact is typically your advocate for the whole goods, the accessories and implements, and what ever service you need during the lifetime of the product. Volumes are not high enough to attract the same sort of aftermarket competition as automotive, and labor prices are in-line with IRFs due to less warranty pay squabbling between dealers and OEMs. Lack of product mobility dictates that repairs are done by the dealer or at the equipment’s domicile by yourself, the dealer, or a travelling specialist. Overall, the choices are an order of magnitude smaller, the “corrosion” is actually a bond, and the common knowledge not nearly as crippling.

In thinking about how to improve customer service retention it is important to think of David and Goliath. Remember, David was with the army of Saul and the Israelites when Goliath, the Philistine, came out with supreme confidence and challenged the Israelites to send their champion to settle the battle in single combat. To Goliath it was a sure thing. This tale has lasted several millennia because we just love the underdog, David, coming out and knocking out Goliath with a slingshot, then killing him with his own sword. Vegas would have given him a million-to-one on that. Bad odds.

In fixing service retention, OEMs seem to go for the slingshots, willingly do battle with the Goliaths out there, and hope for the lucky shots.

  • The Goliaths are also all those non-dealer choices that customers have in buying parts and getting service. Jiffy Lube is a Goliath. NAPA and Carquest are Goliaths. LKQ is a Goliath. These “Goliaths” are seen to represent “convenience”, and so OEMs take their slingshots and load them with dealer “convenience” bullets like extended hours, loaner cars, satellite service outlets, weekend hours, nice waiting rooms, and on-line appointment scheduling. Stuff like that that costs a lot of money and are not sustainable.
  • The Goliaths out there include those folks poisoning the water selling cars and trucks like hair treatment at a carney sideshow. F&I is a Goliath. Used car is a Goliath. Look above at Saturn’s CSI numbers and understand that the new car salesman is still a Goliath. So, OEMs measure CSI with vigor and turn a blind eye to the gaming. They pay for performance in a change environment that resembles how Monopoly is played in Sing Sing. There’s a lot of money being wasted here.
  • The Goliaths out there are dealership pay plans, service labor rates, naive dealer management systems, and service advisors (who nobody seems to organizationally own). But, nobody seems to throw any stones at these … they are seen as second order influences and battle here has none of the romance that the other Goliaths embrace.

Deep REM sleep dreams are curious phenomena. We can imagine things very differently and it makes complete sense. We wake up, shake our heads, and return to the real world that sometimes makes no sense at all. In the awakening mist separating dreams and reality we are sometimes given the gift of critical examination. Who knows, but tomorrow morning for a short spell we might:

  • Be confused why dealers would ever willingly spend their own money on a part of the business that has the least respect, for a goal that nobody believes in. Techs working on Saturday? Satellite service outlet? Yeah.

  • Be astounded that OEMs pay homage (and a lot of cash!) to CSI numbers that reflect how much Monopoly money you can steal … and not be very clever in doing so.

  • Be dazed and confused why OEM executives don’t understand that proudly charging a dealer customer $80 - $120 an hour to turn a wrench ticks people off. Especially in a recession.

We need to use this recession for achieving clarity and critical examination. We need to stop wasting money on slaying Goliaths who simply won’t go down, and we need to aim our slingshots at some Goliaths who are vulnerable to change.