Tuesday, July 20, 2010

Digital Aftersales Summit – It’s Time

Brian Crounse


The digital marketplace is the new next frontier that vehicle aftersales organizations will have to navigate through. Lacking a roadmap, the landscape will be characterized by significant economic waste, missed opportunities, wrong turns, bad guesses, and a separation of winners and losers. The best way to steer through this is collaboration. The ROI is enormous; the cost of failure from isolated decision-making is equally enormous.

To address this, Carlisle & Company is hosting a Digital Aftersales Summit this fall. This invitation-only event is free to automotive companies that are active participants in either our North American Service Parts Conference (NASPC), or our North American Service Operations Forum (NASOF), which is everybody that sold over 50,000 cars last year in the U.S. If you work for one of these companies, we’ve likely already invited someone from your team. If you want to know who exactly we invited, please contact me (email or call me at 978 318 0500 x182). This event is a follow-on to three sessions that we held at this year’s NASPC: David’s Crystal Ball, a roundtable discussion that surveyed current online capabilities, and an “experts only” panel discussion. The summit will build on the findings from these sessions.


I acquired my first email address about 25 years ago. In the intervening quarter-century, we’ve seen intrapersonal communication via computer, for business and pleasure, move from a curiosity to a pervasive part of our daily life. And most of that transition really just took place in the past decade. In 2000, for example, about 400 million people used the internet in some manner; in 2009, that number topped 1.8 billion. Here’s an example from a commercial context: in 1999, Amazon broke a billion dollars in sales for the first time, but managed to lose $800 million in the process. In 2009, Amazon had sales of $24.5 billion, and had nearly $1 billion in earnings. That’s some serious growth (and, after years of red ink, some serious profit).

Our industry has certainly been paying attention to the internet and the web, but mostly on the vehicle sales side. Manufacturers offer 3-D vehicle configurators, efficiently forward online leads to dealers, collaborate with 3rd party sites like Edmunds and KBB, and have social media strategies. But, quite frankly, vehicle manufacturers’ aftersales divisions are behind the times in terms of using digital communications to defend and grow their parts and service businesses. We’re not doing as well as we should be when it comes to capturing, connecting, and closing with our customers.

Proof of our digital aftersales difficulties is not hard to find. Let’s start with capture. Fire up Google and type in something like “Where can I get my oil changed,” “brake service”, or “auto body parts.” Next, count the number of manufacturer results you get, both in the main results, and in the paid ads. Your results will vary based on your location, what Google knows about you, and the phases of the moon, but I’ll bet you’ll see one manufacturer (OEM)-related link (GM Goodwrench), maybe a couple links for local dealers, and a slew of links for Jiffy Lube, Midas, Firestone, and other savvy aftermarket parts and service competitors.

Things look a little brighter if you search for something like “Ford oil change,” but here’s the problem: most searchers don’t mention their vehicle brand or model when they search for something. That’s a problem for us, and a boon for our aftermarket competitors.

Source: http://www.google.com/insights/search

Looking down the capture-connect-close funnel, let’s think about the next step, connecting with them (assuming that we captured a few, somehow). The main strategies are either to direct customers to an Owner Center, which provides a portal for a variety of aftersales product and services, or to send them directly to the right product or service provider, typically a local dealer.

Many OEMs have launched or re-launched Owner Centers in recent months. In our opinion, Ford’s site, which we’ve discussed previously, still ranks as Best-In-Class; it was clearly designed from a customer-centric viewpoint, and it’s just so easy to use. Users are never more than a couple clicks away from looking up service information, buying a part, or scheduling service. And I want to point out a feature of their service scheduler: you don’t have to enter your info with Ford, and then register with your dealer – Ford can pass this info along. If that sounds like a “duh” capability to you, you’re right. The fact that Ford is one of the few that has successfully implemented this feature says a bit about where we are as an industry.

The main challenge for Owner Centers is that customers need to be directed to them once, and then trained to return. Getting the initial visit is hard enough (here’s a hint: put the link to the Owner Center everywhere (web searches, dealer RO paperwork, signs, etc.); getting the return visit is even harder (another hint: merge online finance/lease payments into your Owner Center, even if that means collaborating across organizational silos).

The other strategy out there is to route traffic to service providers (i.e. dealers) directly. This strategy shoots for a quick connect rather than a deep connect. This sidesteps the need to build and market a killer Owner Center, but has its own challenges. The main one is managing change at the dealership. Dealers now generally understand what to do with online vehicle sales leads. Online leads for parts sales and service appointments (for those OEMs without robust service schedulers)? A different story. As we’ve discussed previously, it’s not good enough for our dealers to be as good as independent repairers. They have to be better, to overcome customers’ current perceptions of dealer service.

And one way we can help dealers do that, or at least provide the opportunity, is by offering a convenient front-end for close opportunies. These front-ends can be in an Owner Center, or be standalone tools that facilitate the quick connect. The main OEM-controlled close tools are parts e-commerce sites and service schedulers. Manufacturers struggle with e-commerce sites for a few reasons. One is that OEMs are learning how to be retailers of parts. While dealers are key players in most OEMs’ parts e-commerce strategies, it’s the OEM that’s in charge of the front-end. The other reason is that we’re not all sure what the purpose of these sites is. After all, the DIY market is relatively small in the U.S., and not many vehicle owners buy their own parts for DIFM (Do It For Me) repairs. But we think parts commerce sites have value as a shopping and research tool, and we’d sure like to wholesale parts to independent repairers via this sites, as a supplement to our wholesale strategies. But so far, no one’s shown us numbers that indicate that parts e-commerce sites are profit centers, yet. The question is, are these sites like Amazon, or like Webvan?

We face the same issue with service schedulers. On the one hand, many service providers offer online scheduling. Even many state DMVs have well-designed online scheduling tools. And if DMVs can offer customer service that’s superior to our own capabilities, then we’re in trouble. On the other hand, it’s not entirely clear, yet, that offering online scheduling pays its own bills. We’ve heard promising statistics from a couple OEMs that are scaling up this capability, but there’s not yet enough volume to declare victory. Yet.

So, where does this leave us? In talking with various aftersales organizations, we’ve heard about ideas, strategies, and initiatives that vary across the board, and in many cases conflict. There’s not much agreement beyond acknowledging that aftersales organizations’ online efforts are months to years behind those of our vehicle sales organizations.

That’s why we’re hosting our Digital Aftersales Summit. The rationale behind both NASPC and NASOF participant involvement is OEM aftersales organizations benefit from pooling their knowledge and learning from one another. The topic of digital aftersales is no different, except that the learning curve is steeper, change occurs more swiftly, and the gaps between OEM capabilities and those of the independent aftermarket are more apparent.

The Summit will be a day-long event. In the morning, partipants will update one another on their recent initiatives, what they achieved, and what they learned. This will be a roundtable discussion with vigorous Q&A. In the afternoon, Carlisle & Company will present results from four areas of research:

Customer Behaviors & Expectations
What are customers currently doing online, with respect to vehicle maintenance and repair, and what do they want to be able to do? We’ll present our analysis of an online panel survey that we’re conducting right now.

Online Aftersales KPIs
Who’s really moving the needle, in terms of driving traffic to our sites, connecting with them, and closing transactions? We’ve defined a set of capture-connect-close KPIs and we’re collecting data from participants this summer. We’ll share and interpret our results.

3rd Party Lead Aggregators
3rd party vehicle research sites like Edmunds.com and KBB.com are established parts of the vehicle sales ecosystem. There are similar players looking to define themselves in the aftersales area. One potentially killer feature of these sites—and their mobile applications—is that they allow consumers to comparison-shop for repair estimates. We’ll report on our findings about the capabilities of these sites, and what they will mean for our industry.

Collaborative Opportunities
As described, OEMs are getting clobbered on many high-volume search terms. If a searcher doesn’t mention a vehicle brand or model, most OEMs aren’t cracking the first page of results. One of the challenges is market share – the economics of AdWords mean that it’s not very smart for Chrysler to bid against Honda to pursue oil change customers. We at Carlisle & Company believe there’s a smarter way to approach this problem. We’ll update participants on our strategy at the Summit.
Bottom Line: If you want to get up to speed on this topic – and if you’re involved with parts or service marketing at an automotive OEM, you really need to be up to speed – then you (or at least your colleagues) need to attend our summit. Again, it’s free for NASPC / NASOF participants. To find out more, (email or call me at 978 318 0500 x182).

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