Thursday, December 13, 2012

Seinfield At Your Local Dealer: My Dealer “Soup Nazi” Is Not MyGuy

by David P. Carlisle

Seinfeld provides useful metaphors for life and business. One of the TV show’s most interesting constructs was the “Soup Nazi.” It’s about this guy who sells the best soup in the world and treats his customers like dirt. Maybe less than dirt. The Soup Nazi is about accepting the worst to get the best. Based on the recent Dealer Technician Survey, GM (Chevrolet) is an industry leader in technician training, experience, and retention. These techs are the “soup.” Serving the soup at my local Chevy dealer is a cadre of Seinfeldian “Soup Nazis.”

If you aren’t with Chevrolet, don’t feel too smug – this story could be told about every brand and segment; cars, trucks, tractors, and bulldozers. This is a story about why your next generation of service customers is fleeing dealers/distributors and why service market share is so low. At the heart of the problem is the stone cold fact that most dealers treat service and parts as a source of business profit. Not as a profitable business … that should be nurtured, cherished, and grown.

My local Chevy dealer, who I love, is not “my guy.” I continue to return for more “soup” because they are service and maintenance quality zealots. And, I continue to have this nagging fear that, someday, I will screw something up and they will say, “no soup for you!” Then I will have to take my cars and trucks to a place like Sawyer Automotive.

Here’s a capsule summary of my last visit from two weeks ago. It’s typical. My pickup’s check engine light went on the previous week, I needed my annual state inspection, and OnStar told me that the pressure was low in one tire … it also told me I had a while to go before I needed an oil & filter change. It had been months between LOF’s and I felt queasy, so I called my dealer and talked to a service advisor (SA). He said to drop off the truck anytime. I gave him high marks for that. As I pulled into the service lane the next day, the SA greeted me and noted the mileage. I followed him to the write-up area and he asked me a bunch of questions. I told him again about the check engine light. He said that they charged $95 to “read the codes.” I knew that I could have read the codes on a mobile phone with a $24 Bluetooth connector. This was irrelevant to the dealer Soup Nazi. He suggested I rotate my tires. I agreed. No hesitation and no eye contact. I wanted the “soup.”

I left the pickup and waited for a call back. It came in about two hours and the SA said that they found a defective glow plug covered by the warranty – so, GM paid the $95. Yeah, right. He told me that the truck’s alloy wheels had rusted to the hubs and the tire rotation was a real bear. Oy vey, alloy wheels “rusting?” He said the air filter was dirty and asked if I wanted a new one for around $120 - $140 (my mind was numbed and I could not remember the exact number …what planet was this guy from?). I said “no.” He was a bit incredulous and asked me several times again. I gathered my courage and said “no” each time he asked. I was at my computer while we spoke and Googled ACDelco air filters for my 2008 2500 HD diesel Silverado. Found one for $38.59. Perfect match. Clicked and ordered it while the Soup Nazi asked one more time. It takes about 90 seconds to change that type of air filter. OK, I really could do two in 90 seconds.

My daughter picked up the truck, paid for the work, and gave me the RO. The truck failed the state inspection because the check engine light had been on and the truck needed to be driven for another 50 miles to make the electronics work. Sounded weird, but reasonable. I was not going to call out the Soup Nazi on this one.


The RO I received was a customer dissatisfaction work of art that should be acquired by MOMA. The first page summarizes the bill that came up to $144.27. I wasn’t shocked; I was amused. Most prominent is a statement that asks me to call back if I was not “COMPLETELY SATISFIED” with the repair work … he is asking for “all 5’s” on the Chevy survey I’m due to get.

Listen. You don’t tell the Soup Nazi nothing! You just take the soup, shut-up, and pay for it. Or, next time, maybe there’s “no soup for you.” Everybody knows this.

To the right of the Soup Nazi’s plea for love is a summary of the costs for a state inspection, tire rotation, and LOF. Labor, the cost component that every customer distrusts and uses to peg dealers as the high cost provider, comes to more than half of the RO. Hmm, this “labor” is for services that are typically menu priced. I’m scratching my head on this one. $20 of the $144.27 is for miscellaneous charges (that includes a second state inspection charge of $6.50) and GOG, whatever that is. 14% of the bill is for stuff I never asked for and can’t identify. Oil, filter, tire rotation came to $139.05 (including the GOG and hazardous waste fee). That seems ridiculous compared to what I see around – Jiffy Lube quoted me $74 for the job, including 10 quarts of oil. Oh, that Soup Nazi!

Yep, the Soup Nazi put a sticker on my windshield telling me to come back for another oil & filter service in 3,000 miles. OnStar, and my truck, do a pretty good job of telling me when to change the oil and filter based on engine conditions; for me, it is about every 7,500 miles.

Looking further on the RO is a vibrant pink star with another plea for “all fives.” On Friday (one day after the service), I got a call from the dealer asking for “all 5s” … and on Saturday I got an email asking for the same thing.

Sometimes I wonder if OEMs understand that this is going on with a significant portion of their dealers … and that it putrefies the statistical validity of their post-service customer satisfaction surveys. Why are they wasting all that money? Momentum and organizational stultification.

Well, it gets worse. As I said, I failed the inspection due to the “check engine light.” The dealer printed out the inspection report and on page 2 it contained a list of “local registered emissions repair shops.” My Soup Nazi dealer is not on the list. I called up the SA to ask him about this – I got garbage. So, I asked to be transferred to Frank who runs fixed operations. My entire family loves Frank – he is a great guy. He told me that they don’t want to be on the list because non-Chevy owners might bring in their vehicles for repair, and he does not have the proper diagnostic equipment. I asked how Sawyer Automotive, who is on the list, does it. Well, they are different … and Frank started in on Massachusetts Right to Repair. (Hmm, if right to repair benefits Sawyer, why can’t my Chevy dealer leverage it? I guess they are different.)


OK, there was a silver lining on the RO. Buried in the detailed accounting was an innocuous little line that said I got a $29 break on the costs. It was a “certified certified service special.” I had no idea of this until I discovered it in my forensic probing. Thank you. Er, ah, somebody???

Bottom Line: A younger digital service customer (DSC) would puke at this sort of stuff, tell all their friends via social media, and never come back. Instead of becoming “my guy”, my Chevy dealer would become “that guy.” That’s a big problem. It is a big problem because my local Chevy dealer is very very good at servicing and repairing vehicles. They simply do not have the faintest understanding of what goes on in a customer’s mind during (and after) a service experience at their shop. You might look at this and say to yourself, “hey, this is a one-off and not representative of most dealers – especially not ours. I know this because I talk to them and we have policies, training, and programs that would prevent this sort of stuff from happening. We’ve got this sort of stuff covered.” Probably not.

Let’s go back and ask the question, “what would ‘my guy’ not have done?"

  1. My guy does not charge $95 for 3 minutes of work checking the “check engine light” code. Heck, AutoZone jobbers do this sort of stuff for free and there are even iPhone apps that do this. $95 is ridiculous and evidence of greed which leads to distrust.
  2. My guy does not charge over $100 for an air filter that you can buy on-line for $38.59. The $120 - $140 sticker shock is the result of a dealer double-or-more-net pricing strategy that is just plain stupid. Assume that your service customers shop at Wal Mart and the internet and understand “fair” pricing for, at least, wipers and filters.
  3. My guy doesn’t tell me that alloy wheels “rust.”
  4. My guy doesn’t add on another 14% to my RO for stuff I have no idea what it is.
  5. My guy doesn’t let me leave the shop thinking that their labor rate is exorbitant. In fact, my guy does everything in his/her power to menu price and reduce the sticker shock of labor costs.
  6. My guy has menu prices that are competitive, like the Ford dealer a few miles away, and Jiffy Lube, on things like oil and filter changes and tire rotations.
  7. My guy doesn’t tell me to come back in 3,000 miles when the oil and filter service interval is more like 7,500 miles.
  8. My guy wouldn’t let me leave the shop with a list of other places that can fix my emissions “problem” without putting a sticker on the RO/inspection report saying that they, too, can fix my vehicle.
  9. My guy would never give me a $29 discount and not merchandise it.
  10. My guy does it right, the way I want it and doesn’t have to ask for “all 5s” four times before I get a factory survey.

Friday, December 7, 2012

How Much Would You Spend on Marketing to Acquire a Customer for Life?

Michael Sachs

My daughter, a junior in college, purchased her first car this summer. Actually, I purchased it and she is now more indebted than ever. Anyway, as she was packing her car to return to school I noticed one of her tires was very low on air.

Timeout: Hannah grew up in the iPod generation, where things just work until they don’t and then you simply throw them away and buy new ones. As such, she had no idea that she actually needed to look the car over every once in a while to see if everything was ok. How many others like her are out there? What’s the long-term business potential from earning their trust?

I filled up her tire and insisted that she take the car in for service as soon as possible. When she got to school, Hannah asked a friend for a recommendation and got one for a local tire store (part of the regional Kost Tire & Auto Care chain). She went to the shop, was greeted immediately and her car was in the service bay almost before she sat down in the waiting room. About a half-hour later the man who greeted her came out and showed her the nail that came out of her tire. He said the tire was all patched and she was good to go. When she asked how much she owed for the repair, the man said with a smile,”Don’t worry about it. I got you covered on this one.” Wow! My college-poor daughter was so happy – she got her car fixed and it didn’t cost her a cent (and almost no time either).

I look at this and think, “That’s one smart shop keeper.” What was he going to make on that repair - $20? Instead, he just acquired a customer for life. Actually, he probably acquired more than one customer, since she has already recommended this place to many others (just like her friend did for her).

The Bottom Line: How much do you and/or your dealers spend to acquire one new customer? It’s probably more than $20, and it’s probably not a life-long acquisition. I’d say this tire shop keeper made a brilliant marketing decision – he acquired a customer for life and it only cost him $20.

Thursday, November 29, 2012

My-Guy.com Is Coming

OEMs in our industry have largely fixed the most glaring issues associated with crummy supply chains. If you have found that your supply chain is not quite fixed, well, you should know what’s broken and how to repair it. If you are at the top of the heap, you know how to stay there. The operative word in all this is “you” … it’s your supply chain.

But, the customer service experience is largely out of your hands. It is in the dealer/distributor domain and all “you” can do is watch, influence, and reward.

Frustrating, isn’t it? You know exactly how to treat a service customer, you have incredible training resources, you have access to millions of dollars of reward funds. Yet, your guys still aren’t “my guys.”

Maybe you haven’t figured this one out yet. We are taking a stab at it. The first step is our launching of my-guy.com, which is targeted at dealer service managers and service advisors in North America. It has one purpose: education. It is a Swiss army knife for dealer service managers and service advisors. Like Consumer Reports, it has no brand affiliation.

My-guy.com will put research into the hands of the people who matter – your service department professionals. The top-down approach hasn’t worked; it’s time for us to try a bottom-up approach. Regular updates will spoon feed key messages to this group.

Here’s what’s planned: we’ll share dealer best practices as they relate to market share, clips from dozens of focus groups will highlight the voice of the customer, there will be tips from top-performing dealers across the country, and a weekly blog will take a deeper dive into our research to synthesize all of our findings. With an objective eye, we will regularly review technology and tools available to dealer service professionals. All of this will be supplemented by over seven years of research. This content will not only inform your dealers, but also recommend ways to implement change.

More importantly, my-guy.com will serve as a dynamic community for dealer service departments. This website's real strength will be the involvement of your guys. “Get Involved” – you’ll see that phrase plastered all over the site. Your service departments will be able to submit successes and failures to us, ask questions about the program, discuss with each other on a forum, take surveys, interact through social media, and even see the latest automotive news. We will then funnel that collective knowledge back to their peers. Their participation will influence and evolve the site. Your dealers have a wealth of knowledge out there. So do we. It’s time to share it.

The Bottom Line: There has never been a central knowledgebase and community for service professionals. Well, it’s coming. Look for my-guy.com to launch in mid-December.

Friday, November 16, 2012

Right to Repair Passes in Massachusetts … by 85%

The following comes from Massrighttorepair.com.
“When the final votes were tallied, 2,332,438 voters were in favor of Question 1, with only 393,625 in opposition, for an astounding 86% to 14% victory. “Voters sent a clear message to automakers– it’s my car, I paid for it, I’ll get it fixed where I want, not where some big corporation tells me to,” said Art Kinsman of the Massachusetts Right to Repair Committee. “Right to Repair is about true ownership. When you buy a car from a manufacturer’s dealer, you ought to have the information necessary to fix that vehicle. Technology should never leave the rights of car owner behind.” It is now illegal in Massachusetts for automakers to withhold repair and diagnostic information, not just for passenger cars, but for motorcycles, RV’s and bigger trucks and construction vehicles. By supporting Question 1, voters told big car manufacturer’s they are tired of paying significantly more for their out-of-warranty repairs at a franchised dealership. “We have now achieved complete victory in Massachusetts on Right to Repair. Until there is a national Right to Repair law or agreement, we hope this emboldens other states to strike a blow for car owners and pass their own Right to Repair statutes,” said Kinsman. Kinsman promised that members of the Massachusetts Right to Repair Coalition will be vigilant following today’s vote to ensure there is complete compliance with the law and that independent repairers and car owners will have the resources they need to ensure they receive the full benefit of this landmark consumer protection law.” http://massrighttorepair.com/2012/10/ma-righttorepair-committee-urges-voters-to-vote-yes

Hmmm. Looks pretty bleak. 85% of Massachusetts was represented by Art Kinsman of the Mass RTR Committee (sounds so official), who is a small town lobbyist lawyer representing AAIA. This was the David that slew Goliath. I wonder who represented the interests of the auto industry? Probably a big firm with big excuses for failure. But, wait, didn’t we get a compromise bill signed by Deval Patrick before the vote? Yes we did! Here’s the status of this compromise from the Sentinel and Enterprise:

After years of commercials, a last-minute legislative compromise and an overwhelmingly approved ballot referendum, the battle over "Right to Repair" in Massachusetts is still not over. Automakers are urging state lawmakers to prevent the ballot question from becoming law. They favor a compromise signed by Gov. Deval Patrick in late July, when it was too late to pull the Right to Repair question off the ballot. … We think the Legislature should move to insure the provisions on this compromise law are the real law, the final law, as soon as possible," said Daniel Gage, a spokesman for the Alliance of Automobile Manufacturers, an industry group that has opposed Right to Repair legislation. "The Legislature should move right away to give us the clarity automakers and dealers and auto repairers need." It remains unclear how lawmakers will address the issue, said state Rep. Theodore Speliotis, a Democrat from Danvers who chairs the legislative committee that worked on this summer's compromise. Under the ballot legislation, automakers are required to make repair information available to independent shops and dealers by 2015. The compromise legislation gives automakers until 2018. "I don't think it's that big a deal, to be honest with you," said Speliotis. "The message is more important than the actual implementation date." Automakers see it differently. With auto manufacturers already designing 2015 model vehicles, Gage said it will be virtually impossible for them to comply with the regulations in such a short time span. "It means Massachusetts car purchasers will have to go to Rhode Island or New Hampshire or Vermont or Connecticut to buy a car if it's not available in state," said Gage. … Proponents of Right to Repair, meanwhile, say they are willing to negotiate a deal with the Legislature that includes elements of the ballot legislation and the compromise law. "I think everyone has to take a breath and say, 'Let's look at these election results,'" said Arthur Kinsman, a spokesman for the Right to Repair Committee, which was a leader in getting the issue on the ballot. "We can't just go in and snap our fingers and dismiss what was done by the people. It would be unseemly and disrespectful to the vote." (http://www.sentinelandenterprise.com/local/ci_21993258/debate-over-right-repair-is-far-from-over#ixzz2CCx7zH5K)

Bottom Line: Local small town lobbyists got RTR passed by 85% in Massachusetts. It will spread from here.

Friday, November 9, 2012

Who’s Guy Are You?

“We already know that and we have programs and strategies in place that accommodate this…., so, we’ve got that one covered.” I hear this all the time. Wiley E. Coyote always has a plan, too.

The second most important thing that customers value from their service provider is that they “charge a reasonable labor rate” and by a whopping margin service customers think this is a dealer weakness. You already know this and you’ve got this one covered.

We received a daylight savings time service mailer this week from a pretty spectacular local car dealer, who thinks “it’s time to turn back your clocks.” The pitch is all about showing labor rates that span from $80 and hour to $110 and hour.

Hmmm.

Bottom line: Maybe you haven’t got this one covered.

Thursday, November 1, 2012

Are Those Reliability Surveys Reliable?

David P. Carlisle

Consumer Reports (CR) blasted Ford’s reliability recently. They said Ford continues to fall … even though they were “Detroit’s poster child for reliability” a few years ago. CR certainly does not have a problem with sample sizes – tens of thousands of zealous subscribers fill out those reliability survey forms with a lot of care and attention. J.D. Power pays you a dollar for their version – but, they do not employ zealots for their dollar-an-hour pay grade work.

Let’s assume that CR’s sample size was fine, and that their sample population was OK, too. Does this mean that Ford’s aren’t “reliable?Maybe not.

The problem might lie with the survey instrument and the binary summation of the survey’s “gestalt.” Let me make a point.

Ford is not the only one pushing the limits of infotainment systems in their products. In the 1960s, seatbelts were revolutionary and, yes, there were early and late adopters. Same with air bags. It’s all about technology that takes your vehicle to a new level of safety and security. Chrysler used air bags to differentiate itself and separate itself from the pack. It worked. Same goes for infotainment.

Same, but very different. I went to Google and typed in “ford my touch.” The top hit was for SYNC, the next was for a GPS software update for SYNC, and the third was for a lemon law firm that headlined “Does Your Sync Stink?” Hmm.

The difference comes from the sheer complexity of the infotainment systems, and the change (and complexity) of human interaction with these systems. Seat belt? Easy, snap it on until it clicks. No buttons to push or voice commands to master. Airbags? Hey, they’re invisible! No problem.

Windshield is fogging up fast and you want to clear it quickly? Well …… you have to depress a button on your steering wheel to get the robot lady to ask what you want. You have to prompt the system with the correct initial command. You have to remember what to say. You have to remember how to say it. You must pray to your god(s) and hope you got the sequence right before you lose all visibility. Actually, it is worse than this. In the old days you bought a car from a car dealer and the salesman pointed to a knob labeled “defroster.” If you’ve bought more than one car in your life, you ask the salesman to skip this step because you want to drive, and smell, your brand new car. Hey, the button says “defrost” on it. Dealer salesmen got lazy, asked you for “all 5s” on the survey (or filled it out for you) and life was good.

Not any more. You might need hours of education, coaching, and counseling (“ECC”). If you are a woman, you might need even more of this – many cars are “tone deaf” to women (I find this strange since women constitute a significant customer segment … like more than 50%). Who gives you this ECC? The dealer salesman who has been conditioned for about a half century to take their money and run. So, what ECC you do get is icky.

Well, this is a problem. It will certainly get worse when the vehicle enters the used car market, where there are no ECC resources to be found. Who cares much about that – it is 5.5 years away.

You get a survey in the mail on IQS, or vehicle reliability, on your brand new car. You might hate the infotainment system … especially if you are a woman and it can’t understand you. So, you nail them by black balling everything in your cockpit … it’s all connected and it is frustrating to use. The car is a brilliant execution of machine and technology, but you can’t figure out how to turn on the defroster when the windshield fogs up.

CR processes all this survey data and might not segregate the cockpit data. Their gestalt is that the model, the brand, the company is unreliable. They say you continue to fall … even though you were “Detroit’s poster child for reliability” a few years ago.

The simple chart to the right was posted on the Internet by a lemon law legal firm. It represents another way of looking at reliability. Of the top 20 cars listed, Ford only has one model. Hmm. Well this certainly doesn’t foot to CR. (The chart represents vehicle complaints on file with the National Highway Traffic Safety Administration (NHTSA). Each year, thousands of customers call to register complaints about their vehicles. The complaint index is based on a ratio of the number of complaints for each vehicle to the sales of that vehicle. The numbers represent relative index scores, not the number of complaints received. The complaint index score considers sales volume and years on the road.)

Bottom line: Ford doesn’t have a problem with “reliability.” It has a problem with customer education, coaching, and counseling – ECC – of its infotainment technology. CR and J.D. Power do have a problem with reliability. Customers think reliability means that things don’t work – it sputters and stops and needs thousands of dollars of repair before its time. It certainly does not mean that they can’t figure out how turn on the defroster or turn off the radio. And, if Ford is infected with this “reliability” plague virus, everybody else is not very far behind.

Wednesday, October 24, 2012

Pick/Pack/Ship - In Search of a Standard Approach

Michael Sachs

Warehouse operations are fundamental to the service-parts business. So, you’d think that when you bring 21 companies together, all in the business of distributing motor-vehicle service-parts, that there would be a lot of commonality in the way they operate their distribution centers. Well, nothing could be further from the truth.

Earlier this month, we closed out our 2012 North America Parts Benchmark (NAPB) cycle in Chicago with a Focus Day devoted to the subject of outbound warehouse operations (actually, it lasted 1.5 days – lots to talk about). Once we got through the basics of high level facility and performance comparisons, we broke the session down into the following modules:
  • Slotting/Storage
  • Picking Strategies
  • Scanning/Technology/Equipment
  • Dock/Loading
  • Safety and Environmental

For every module we started by comparing the basics; for example, do you use temporary employees or do you have a WMS? In no case, did we find a significant bias toward one solution vs. another, even among top performers. Here are some examples:

Slotting/Storage – This is fundamental to efficient warehouse operations. If you don’t get this right, then it is very unlikely that you are running anywhere near peak efficiency. There is little debate about this. So, one would assume that there are some great off-the-shelf tools out there for managing the slotting/storage optimization process. Yet, only half the companies have a WMS that they rely on for this activity. Some of the best performers are in the “don’t have” category. The following charts provide a couple of other examples of how diverse the approaches are to warehouse storage:

Note: All charts are based on one data point per OEM. OEM names have been removed to protect anonymity.

Picking Strategies – One of the many ongoing debates in this field is whether or not a single person should be responsible for a given order line from pick through sort. The argument for doing this is that by having a single point of ownership, there is also a single point of accountability – no finger pointing when quality issues arise. This allows for both the identification of and training for people who need help with the quality of their work.

What’s interesting here is that those with the highest productivity within their respective industry segment tend to have a single point of line item ownership, yet some of the best quality comes from those with multiple points of ownership. Go figure.

Even for some of the most basic things there is no consensus; like how one traverses the warehouse or whether an operator picks and sorts each line (vs. picking all lines first, and then sorting).

Scanning/Technology/Equipment – Scanning is one of my favorite topics, because it seems that for every company that claims to have seen improvement by adding scanning there is another one that has seen improvement by reducing or eliminating scanning. Having said that, scanning is one of the few areas where the majority of industry players are in; about three-quarters of them. Again, whether a company scans or not is not a predictor of performance level. As the chart below illustrates, even among the majority of companies that scan, there is clearly some debate about how much scanning to do and where in the process it should occur.

Okay, by now I think you get the picture. Here are the Bottom Lines:
  1. There is no single way to achieve high levels of warehouse operations performance.
  2. While it is difficult to determine the key drivers of performance for any given OEM, the fact that each OEM does so many things differently from the next, even among top performers, suggests that everyone still has room for improvement.
  3. All of the above commentary, and accompanying charts, are interesting, but what really makes the 1.5 day investment valuable is the conversation about what companies actually do inside the four walls to achieve their performance levels.
  4. Bring together a large group of subject matter experts who all have a passion for warehouse excellence and over the course of 1.5 days everyone will learn many interesting things (as indicated by the 94% top-box overall satisfaction with the event), regardless of their performance level, and leave with their own customized list of ideas and action items.

Thursday, October 18, 2012

YourMechanic Wants to Kill Your Service Business

(And Other Observations from the 5th Digital Summit)
by Brian Crounse

Go check out YourMechanic. Here’s their offer: to repair your car in your driveway or at work, at your convenience. We may scoff at the range of repairs that they can offer, but we shouldn’t – for basic work, you can’t ask for a more convenient service. YourMechanic has an angle on trust and value as well (Convenience, Trust and Value are our three pillars of service). For Value, YourMechanic will give you a price quote for many types of work during the appointment scheduling process, with a low hourly rate (we’ve discussed the optics of labor rates many times in the past). YourMechanic also has a notable take at Trust; since they own the whole transaction, from appointment to billing, they can also own the review. The (few) repairers currently listed on YourMechanic have dozens of reviews, and they’re among the best we’ve seen in terms of timeliness, relevance, and details (see graphic).
YourMechanic is small (~10 employees; service available in pockets of the S.F. Bay Area only), and I have no idea if it will succeed (remember, I was worried about RepairPal, too). But, even ignoring the oil-change-in-your-driveway thing, we can learn from their approaches to Trust, Value and Convenience.

YourMechanic was just one topic of discussion at our 5th Digital Summit, held earlier this month in Detroit. We’ve written a few times about these semi-annual events. We started looking closely at the digital aftersales space in 2010, when we realized that vehicle owners were (finally) starting to make their parts and service decisions—and conduct transactions like buying parts and making service appointments—online. In this respect, motor vehicle aftersales is 5-10 years behind the vehicle sales side of the house, and online e-commerce in general (it’s worth remembering that Amazon’s revenues have grown 12x in the past decade).

The main focus of the day was on Owner Centers and Online Appointments—two areas where we’ve made a ton of progress in the past two years. GM has a great new Owner Center, as do Hyundai and Mopar. Several others have refreshes or updates in the works. The good news is that we’ve collectively come a long way since our first look in 2010. We’ve figured out what content users are looking for (vehicle information, special offers, service appointments, and dealer locators), and are improving on offering up this information quickly and clearly. We’ve figured out that most of this information should be easily accessible, and not stuck behind a registration wall. Of course, we’d like our owners to register so that we can connect with them more effectively. But, it’s well known that people usually don’t bother to register at websites.

I wondered at the Summit why more companies don’t use social logins (logging in via Facebook, Twitter, Google, etc., accounts) to make registering owners as painless as possible. Some, like VW, let you login via Facebook, but most Owner Centers don’t offer this. The main reasons cited for not pursuing social logins were security and privacy. Believe me, I really don’t like the idea of Facebook knowing every time I log into a website—they know enough about me already— but, the reality is, when they are offered, I use social logins more often than not. And I’m not alone!

The reason I think a frictionless login is important is that most of our users simply don’t visit our website often, if at all. We know from our annual End-Consumer Sentiment Survey that most owners who use Owner Centers only use them 1-4 times a year. That’s not a lot. If we want to do any connecting beyond pointing our users to maintenance schedules or the nearest dealer, we have to make registration easy.

Or, make it automatic. Hyundai is the leader here; they’ve instituted Owner Center registration as part of the vehicle sales process, and it works. Hyundai’s Owner Center traffic is off the charts compared to other OEMs. They also have done a lot of other things right: they have a rich dealer locator (minimal clicks/pages to get from start to finish), and seamless integration between Owner Center login and their online service appointment scheduler (this seems like a no-brainer, but it’s yet another non-trivial systems integration challenge).

Speaking of online appointment schedulers, most auto OEMs have implemented them, or are in the process of doing so. While the percent of appointments made online vs. the phone is still relatively modest (less than 10%), the trend is steep (we saw a doubling in the past year). The time to figure out this capability is now. It’s one area where we clearly have a better offering than the independent aftermarket, and we can grow that gap. And here’s an unpaid endorsement – if you want online appointments and don’t know where to start, try Xtime.

Some existing chain players also have online appointment schedulers, but they’re pretty weak (the PepBoys scheduler is pretty slick, up to the point where it mentions – five steps into the process – that you can’t actually make an appointment, after all).

In addition to YourMechanic, ClearMechanic aims to be the “OpenTable of car repair”. While they have a slick user interface, and offer Convenience, it’s less clear how they’re going to nail Value and Trust. Getting your car fixed isn’t quite like going to a restaurant, where the prices are well-defined and customer reviews are (somewhat) relevant and trustworthy. ClearMechanic relies on Yelp reviews, which is better than trying to capture and host their own, but has its limitations (among other things, car dealer reviews on Yelp reflect a mix of sales and service experiences). ClearMechanic does some things right regarding their repairer directory: All dealers are eligible (they even note that “dealerships possess certain technical advantages due to their manufacturer affiliations”), but only “high-quality” independent repair shops are— they’ll only list those with “outstanding Yelp reviews” (4.5 or 5.0 stars) or “prestigious third-party certifications (AAA, Diamond and ASE Blue Seal)”. It’s a start.

So, the good news is that our Owner Centers have collectively improved, dramatically in several cases, compared to what we saw in 2010. Similarly, our online appointment capabilities are gearing up well, just in time. And, we’re leading the aftermarket in both categories. For now. The bad news is that we still have a challenge getting owners to know about and use all these great offerings. Hooking them up at the vehicle sale is one leading practice. Another would be to register them during service events. However, doing so requires a) a compelling reason for both owners and service writers to make the effort, and b) an insanely painless registration process. And the worst news is that players like YourMechanic are looking to disrupt our whole business. Will they?

We’ll hold our next Digital Summit in 2013, date and location TBD. Our focus is TBD, as well, though we’re leaning toward a deep dive on parts e-commerce, plus, possibly, another look at the topic of online reviews. We hope to see you there!

Wednesday, October 10, 2012

What Are Parts Manager Best Practices?

What tangible, observable parts manager best practices are consistent with higher levels of wholesale sales?

Does anybody know? I wonder.

What about best practices that result in higher stocking fill? Best practices that result in higher counter sales?

What, exactly, do the best of the best do to have the highest level of fleet sales? Are there any best practices consistent with higher service loyalty?

Many of us think we know these. And we do. We can list dozens of good things that a parts manager should do. Nobody can list the top three.


We must prove they work.

Parts managers are smart; if we can’t prove it, they will head for the Danish and talk about how crappy your stock order discount is. You have to show them the money.

If I do this one thing, how much is it worth?
We just did this with service manager/advisor best practices and had a workshop with an elite group in Chicago – Hyundai, Volvo, VW, and Acura service mangers attended. Based on a survey of over 600 dealers, we were able to correlate market share differentials with tangible, observable best practices. The service managers spent the day in a workshop concerning these best practices. This approach “showed them the money.” 100% of the session satisfaction survey scores were checked as “very satisfied” – satisfaction with the MyGuy Workshop, the session content, the facilitation and the organization.

The NAPB Steering Committee met last week and decided that a similar approach might work for parts managers. So, we will be launching a best practices survey to participating companies in the next few months – this will be completely different than the current parts manager survey that focuses on parts manager satisfaction with OEM programs and performance. We will have a report-out at the spring conference in Chicago.

Bottom line: What am I hoping for? A compelling short list of things a parts manager should do to drive increased performance that he/she feels in his/her pocketbook. This is a cross-sector effort. Interested? Talk to your Steering Committee member or call Mike Sachs.

Wednesday, October 3, 2012

Are Our Strategy Gurus Missing Something? Why Can’t A DRP Strategy Work For Customer Pay?

Staples is changing its tune. The top chart in the cluster below is from a 1997 strategy assessment we did of the US automotive industry. Fifteen years ago it was clear and “easy” to see what was happening. There was a giant sucking sound dragging us from local stores to price-driven large stores to technology-enabled convenience. The chart below the sucking sound slide shows the evolution of Staples. They recently announced the closing of a bunch of stores and eating a charge of more than $1 billion. Easy. They got caught with bloated assets in an Amazon-designed shopping world. Well, if you are Staples, maybe this is just getting back on track. Staples is the 2nd largest online retailer in the U.S. and Canada. Why do they need bricks and mortar?

This was inevitable.

Dinner with DRP (Direct Repair Program). I had dinner last weekend with a friend who works at a local collision DRP. Huge facility. He told me that they specify aftermarket parts for all vehicles over one year old. The OEM dealer is allowed to match the price of the aftermarket; if they don’t, the DRP orders the aftermarket parts. The DRP gets between $35 and $40 a labor hour, flat rate, to work on the wrecks. Obviously, the technicians get a lot less than this. They are instructed to “fit” all the parts, and if an aftermarket part does not fit, they return it and go with genuine. He said that the biggest targets for aftermarket parts are the domestics and Honda. LKQ’s nirvana … Oh, ah, heavy truck folks, they are targeting you, too. Knew they would. My DRP friend said that that they actually do pretty good work, but he’d never put aftermarket parts on his car. But, he does what he’s told. Easy. Again, no surprises here.

Of course, this was inevitable.

But, surely, this can’t happen to us. Are we immune to that giant sucking sound? Staples sure wasn’t. Fifteen years ago, like us, they must have seen the signs that their big boxes were destined to be phased out. The 2000/2001
Internet collapse made them strategically numb to the inevitable, and they are now taking a charge of one billion dollars to make the switch. Amazon saw the same stuff and suffered mightily, but they started at where the giant sucking sound was taking everybody. Now, all they have to be worried about are like-competitors, which is a lot better than worrying about everybody. Plus, in addition to selling you everything under the sun on Amazon.com, they will also sell you shoes on Zappos.com, baby items on Diapers.com, pet supplies on Wag.com, toys on Yoyo.com, and even replacement auto parts through AmazonSupply.com. The list goes on and on. Mitt, Staples really needs you now.

Where’s the giant sucking sound taking us? So, how does the giant sucking sound drag our aftersales customers from local stores to price-driven large stores to technology-enabled convenience? I think the answer can be seen in the collision DRPs. Look at our dealers as being the high cost local stores … because, that’s what they are. A disruptive innovator might come along and develop a DRP-like model for customer pay maintenance and repair. They’d need to focus on all aspects of customer pay work for which dealers charge $95 an hour. They would have to do better than dealers on the stuff that customers value most (see chart on Tier-1 customer values – thumbs down are values where independents are seen as being “better” than dealers). This should be a lay-up for them. Number one on that list is having the vehicle ready when promised, and number two is charging a reasonable labor rate. Hmmm. $40 an hour vs. $95 an hour? Heck, that’s a lot of money.

Why can’t a Trader Joe’s-like entity (lets’ call it Trader Dave’s) come into the market and clean up? If there were a MyGuy concept operating in the grocery industry, it would be at Trader Joes. Nail the Tier-1 values, do spectacular work, quickly build a positive social network reputation (which drives word of mouth), control variable costs, leverage right-to-repair to gain access to everything the OEMs have, and be nice at the checkout. I’m sure we can find an offshore source of organic brake rotors to keep customers happy.

Time Out: Do you know who owns Trader Joe’s? Organic farmers in Oregon? Surfers in SoCal? Nope, it’s owned by Aldi, a German discount store chain at which 95% of the products are Aldi branded (that’s why almost everything at Trader Joe’s has their name on it). According to The Wall Street Journal in January 2009,”Aldi is so cheap that Wal-Mart Stores Inc. closed its discount outlets in Germany [in 2006] partly because shoppers found the U.S. giant too expensive in comparison.” Just think about that for a minute, your favorite neighborhood Trader Joe’s is owned by a company that makes even Wal-Mart seem too expensive.

Bottom Line: Fifteen years ago we mapped out a very simple business migration path that has been validated with countless restructurings and bankruptcies. Think Circuit City or Borders. These companies saw this just as clearly as we did. But, they could not escape the giant sucking sound. They couldn’t escape because they had invested too much in their status quo –billions of dollars on all of those big boxes. Don’t get caught in a sunk-cost fallacy. Staples is reducing their big box exposure while they still can. The OEMs loosely franchise dealers who’ve invested billions, too. All in all, the OE dealer networks are a perfect fit for our migration model. What’s to stop a “Trader Dave’s” from figuring this out and offering a product/process that makes customers happy and instills trust? Not much.

Of course, this is inevitable.

Wednesday, September 26, 2012

Got Those Infotainment Blues

You are driving down the road and your windshield fogs up. Easy. In the old days, you reached over and pushed a button for your defroster. How could we improve on that?

Infotainment.

Now, we press on a new steering wheel button that does not control cruise control, radio volume, FM/AM/Satellite radio, change channels, tell us the instantaneous mpg, or whatever. This new button activates the robot. Push and speak. Meanwhile, the fog's getting thicker and visibility is diminishing.

The robot asks us what we want to do. Can't see much anymore. We say, "Defrost the windshield." Oops. We said it wrong.

Getting desperate. We scream "DEFROSTER!" The robot does not care that we are starting to freak out. It's focused on elocution and correct phrasing.

You blindly (literally) pull over to the side of the road and find the tiny knob or touch screen sequence that engages the defroster and allows you to see again.

Next, you visit your dealer and ask what's going wrong. The service advisor examines your car and takes you by the hand out to your car and explains how the robot works, how to sequence your requests, and how to articulate the commands. The advisor tells you that the vehicle is fine. Implicit in this is that your command of the technology is not so fine.

You leave the dealership and try to use the robot to call your sister, but end up dialing your mother-in-law. The connection was so fast and complex that it could not be stopped. Your mother-in-law hates you for not coming to Thanksgiving last year. (OK, she hates you for a lot more than that.) You act nice, but when the call is over, you scream at your car.

At home, you call the customer service line and scream at a young man who’s in a call center somewhere overseas. This person did not design the robot.

You hate your new car. You hate your dealer. You hate that damn robot in your car.

In the world of aftersales, we are used to customer emotions coming out when something is broken and/or the repair is long and/or expensive. We have more than 100 years of experience with these sorts of situations.

However, we do not have a lot of experience with situations where our customers are freaked out and everything is working just fine with their car - exactly as designed. There is nothing to be repaired or fixed ... except latent anger and a resolve never to buy the brand again.

This narrative is loosely based on a true story. Lest you blame this all on user error, it turns out that one of our more tech-savvy employees rented a car from the same brand this week. He was excited to see if his rental car’s robot was better than his own car’s limited, but reliable, voice capabilities. He had to break out the manual before leaving the rental lot.

Bottom line:
Apple has the highest market capitalization in the history of the world. They have two sorts of customers: (1) those attracted to their products, and (2) those pissed off with other's products. Apple products do not really need instruction manuals - a fact they delight in. Why can't the OEMs design their infotainment systems with a similar law of design? In my iPhone's settings, I can turn Siri off.

But, this is all beside the point. The folks who are in charge of customer care-and-feeding for 5.5 years of original ownership have little to say to the folks who design the product's attraction for the 55 minutes it takes to sell the car. The problem is that we've changed the game. It's no longer about fixing broken cars and trucks. It's about fixing broken customers.

Wednesday, September 19, 2012

Second North American Technician Survey - Day 2 of Launch

We’re off to a great start on the survey. Just two full days into it and we already have 3,800 completed responses, plus about another 250 nearly-complete responses. That’s a phenomenal start and will greatly enhance the validity of the results we get from this survey.

Below are some of the comments I’m seeing. For the most part, we are seeing two primary comments – “thanks for the survey” and “please give us some feedback/do something with the results”. We clearly have tremendous support for this survey, but it is going to be incumbent upon all the OEMs to make sure we get back to our technicians after this survey with some feedback.

Note the comments below are just a sample of the over 600 we’ve already received to the one question that specifically asks them about their thoughts on the survey….

“Good Survey” Comments:
  • This is the first time in 15 years I think I have ever taken a survey about my satisfaction of [OEM] and my work environment. I would like to see this more often and hopefully see some changes come from it. Thanks!
  • The survey was perfect. I'm glad that [OEM] takes the time to read comments from their technicians.
  • The survey is great and the ability to provide additional comments is very good.
  • Very thorough survey!
  • Survey was excellent Very pleased to have been a part of it.
  • Survey was good. Thank you for taking the time to ask.
  • Excellent I liked it. This is a way for you to hear what I have to say about my job, I already like my job but it can get better.
  • Very good survey, hope it makes a difference
  • Wow! - a long survey, but all questions seem relevant to issues that we face day to day and seem to qualify responses.
  • IT GOOD TO DO THESE THINGS IT SHOWS SOMEBODY CARES WHERE THEIR BUSINESS IS GOING!
  • Good questions, long survey, but not too much fluff.
  • Thanks for your interest in what I have to say.
  • Great survey. Hope it makes a difference.
  • In order for this survey to be effective every technician MUST take it! I have been with [OEM] for 6 years and this is the first technician survey I have taken!
  • This is a very in depth survey
  • Survey was conducted well and length was not too long. Questions presented well with job specific categories.
“Provide Feedback/Use Results” Comments
  • If this doesn’t get read and taken seriously I will be upset i even took the time to take it.
  • Survey was good. Would like to physically see the results of all surveys gathered be heard and see what results come from them. You can take a million surveys and just wonder if anything was taken from them or if it was just a waste of your time.
  • I hope the time spent on this survey will result in some benefit to the dealership network and [OEM].
  • Survey is fine, would actually love to see something come out from doing these surveys.
  • Nice approach, now let’s see if they actually alter any policies.
  • Confirmation that this was read and not promptly filed in the garbage because nobody really wants my opinion which is based on fact.
  • I'd like to see positive change and hope this helps.
  • Please let us know when something from this survey is implemented-doubt it does.
  • Where can I see the results of the survey? I'd like to see the data collected. Thanks!
  • I hope someone reads this survey and makes some changes. I know I'm not the only one that feels like this
  • The survey is ok. But I want to see something actually change.
Bottom line: They care and want to count. Making a difference starts with digesting the implications of the survey, for your company, and then acting.

Thursday, September 13, 2012

MyGuy Customer Retention Practices – Hey, I Know That Stuff Already And I Am Not The Stereotypical OEM! I Can Prove It

David P. Carlisle

As I get older I find myself focusing on the simpler things in life. Understanding a customer’s experience is ultimately very simple. (1) You buy, (2) you maintain & fix, and (3) you buy again. It is a useful exercise to depict all this using common stereotypes. I call it “The Stereotype.” Don’t get defensive; stay with me on this.

You buy it … Stereotypically. In the old days, you researched what vehicle you wanted and did most of the shopping on the internet. You chose and negotiated on the Internet and by phone. You came in with lots of data and, after a lot of waiting, found out from the salesman that all this effort and collected data was irrelevant. You found out about additional dealer preparation costs and processing fees that were mandated by the state. The used car person assessed the scrap value of your current ride, and F&I browbeated you into ordering undercoating, extended warranties, and a security system for your new vehicle. Finally, your salesman said he needs you to give him “all 5s” on the survey the factory will send you … because his family depends on him as a breadwinner and he will get burned if he does not get the very top scores. Besides, he reinforced that you were the most important customer in his life. You emerged, feeling a little dopey after an hour or so, with a new ride and a monthly payment exponentially higher than you planned. OK, a lot has changed here. Now, you get coffee cups in the mail after you close the deal.

That takes care of the “buy.” On to service, repair and maintenance.

Next, you own that vehicle for about 5.5 years and take it in for warranty service, maintenance, and miscellaneous repairs. Your point of contact is the dealer’s service advisor. You really don’t want to deal with the technician who’s fixing/maintaining your vehicle because the tattoos are way too distracting. The service advisor used to work on the dealer’s lawn crew and he impressed the man with his entrepreneurial talent. Mow lawns, sell service??? Easy transition. By the way, one of my people’s sons recently started as a service advisor after finishing his undergraduate history degree and working as a bellman at a hotel. Now, this young man is a good kid; but, he has no mechanical knowledge and has never picked up a wrench in his life. The training was watching Ed for a day; then, go get ’em Tiger. … sell lots of flushes to make that $/RO bogie. This is typical, not stereotypical. Dealer Service Advisors are the real implementers of multimillion-dollar OEM customer retention strategies. Pretty cool. Reminds me of a 1994 Jeff Daniels movie. So, the Service Advisor closes out your RO and says he needs you to give him “all 5s” on the survey the factory will send you … because his family depends on him as a breadwinner and he will get burned if he does not get the top scores. Besides, he reinforced that you were the most important customer in his life. You finally emerged after a lot of up-selling, waiting, and unexpected charges. But, he’s not your guy.

OK, a lot has changed here. Now, the dealership surveys you before the factory does to really make sure you give “all 5’s” on the factory survey.

* * * * *

Of course, the latter maintenance and repair stereotype is not operative in your dealer network. You can prove it yourself just by looking at your defection rates. Hmm. Maybe that won’t work. There are five other tests you can use to show that you are different and not the stereotype.

#1. You have recently updated and documented service advisor best practices – and you train, certify, and measure compliance. This is the foundation. Here’s what I mean, by example; we worked with the top service advisors from four brands and recently did this. Our teams documented service advisor best practices and tied them to service market share. The bar chart shows the difference in market share for dealers spanning the range from always to never utilizing a pre-write-up (the advisor has reviewed each appointment and made notations regarding: this is a repeat customer; what was completed, declined, delayed last time; is there an open campaign or bulletin; what are their preferences for wash, alternative transportation, payment; how I can recognize and call them by name as they arrive – time, vehicle color, names) in advance of customer arrival. The numbers are huge. This best practice is good for dealers and good for service customers. OK, if you are not the stereotype, you’ve got something similar.

#2. You used these best practices to develop a training program for your Service Advisors. A book of best practices will not effectuate change – you need to go out there and make them into believers. You might be thinking that your training organization does this, so you’ve got this one covered. Sorry. Your purchasing organization has negotiated your trainers into a box where there’s no room for innovation, improvement, or excellence. The margins for investment have been squeezed to nothing and what you are buying is a decades-old curriculum brushed off and spruced up to look like whatever you want. Ask the trainers to show you their service advisor best practices and, if they show you them, look for antiquated ideas and concepts. If you pass this test (along with #1) with flying colors, you are not the stereotype.

#3. You’ve nuked your old customer service satisfaction surveys and rolled out a game-proof alternative. This is important. You need to measure true customer satisfaction, not how well your dealers beg for high scores. This is easy; all you need to do is have the first survey question ask, “Did anybody from the dealership tell you that you would be surveyed after the service visit?” If they say “yes,” then throw out that survey response – it has been tampered with. You will have to tell your dealers about this. This is pretty important in engineering a better customer experience at your dealers/distributors. A quality service satisfaction survey is your windshield for driving down the road. Oh, by the way, the survey needs to check and see if service advisor best practices were deployed. So, you really do need those best practices. Do all this (along with #1 & #2) and you are not the stereotype.

#4. It is as easy as 1,2,3 if you can now make sure that your service customers can make an appointment at your dealers. Most of your customers are now “Digital Service Customers (DSCs)” who use the internet in some manner to research and book service. In many cases, OEMs have brilliant web-based service strategies that digitally “walk” the DSC right up to the door of the dealer for service. New millennium technology meets 19th century prison protocols at this point. You need to take control and have a uniform, world-class,
appointment scheduling system. Best-in-class is Xtime. They pretty much own this space as it is defined by cost and quality. The choice is easy; you want a new cell phone? OK, do you go out and get a Blackberry (yuk!) or a new iPhone (of course!)? Same holds true for “i” Xtime. OK, if you’ve got Xtime, along with #1, #2, and #3, then you are not the stereotype.

Most probably, you are the stereotype.

#5. You, the factory, need to coddle and catch customers before they defect or spread bad word of mouth. This takes a world-class CRM/call-center strategy. GM is king of the mountain here. They have a room full of Volt advisors who are uniquely assigned to Volt customers to guide them along the ownership experience. GM delivers a Saturn-like customer experience from Saginaw Michigan. They have another group that I call “Santa’s Workshop” that proactively contacts and gifts customers who have recently had high-risk repairs (repairs that, even when done well, can tick off customers). So, you’ve nailed it and have #1, #2, #3, #4, and #5 – you are in nirvana and will pass purgatory and go straight to heaven. However, count yourself lucky if you’ve just got #5 nailed.

Bottom Line. You can carp on and defend what you are and what you are doing. Spend your precious time picking apart why The Stereotype does not pertain to you and your company. But, ultimately, you really are The Stereotype. It is time to do something about it.

Friday, September 7, 2012

Got the Grey Market and Counterfeits Blues? Don’t Give Up Hope

At this year’s NAPB, the topic of grey market and counterfeits commanded a lot of attention and discussion. As OEMs grow and expand their global operations they become ripe targets for grey/black market perpetrators. What’s bad about these sorts of parts? Lots. They are not “genuine”, but parade themselves as such and deceive customers. This destroys brand reputation and brand equity. Counterfeit parts are like phony $100 bills – counterfeit bills don’t work at ATMs and counterfeit parts don’t work on your car/truck/tractor. Grey Market parts might look okay, but they are likely to be superseded or meant for vehicles in other markets. We hosted a recent roundtable on this. Roundtable participants included domestic and import OEMs in both the auto and heavy equipment sectors, and the discussion focused on some of the countermeasures OEMs were putting to use.

For example:

  • OEMs revealed that dealers have become key partners in detecting grey/black market operations. OEMs educate dealers on how to identify black market parts and some OEMs even have a reward system for dealers that report grey/black market activities.
  • OEMs have also found success by partnering with customs officials and foreign governments. The more educated the officials are, the more likely they are to spot abnormal shipments, a win-win situation for both the officials and the OEMs. One domestic heavy equipment OEM has also started a government lobbying group to educate foreign governments about the importance of IP protection.
  • Another interesting method employed by one import OEM involves using a third-party webcrawler to search for violations online. This process has proven to be extremely successful for the OEM thus far, removing over $150M in grey/black market parts from the marketplace.
  • As a countermeasure on the dealer side, several OEMs reported tracking sales per UIO and/or utilizing RIM to spot unusual inventory movements (or lack thereof). Though determining if an inventory discrepancy is actually caused by grey/black market activity can prove to be difficult, these methods are a good starting point and may indicate a need for additional digging.
Though each OEM faces its own level of grey/black market activity, participants all agreed that the grey/black market was a growing problem and that industry collaboration on a global scale would be a critical step in reducing the market’s size and scope.

Bottom Line: If your company is worried about the proliferation of a grey/black market for your parts, here are five steps you can take:

  1. Educate your customers. Stop grey market and counterfeit at the point of purchase and installation.
  2. Partner with your dealers. Both your company’s and your dealer’s incentives should be aligned; dealers can be a powerful force out in the field.
  3. Educate customs officials. Catching the “bad guys” is their goal as much as yours.
  4. Do internet research. A huge chunk of illicit trade is done online. If your company doesn’t have the resources to do the research in-house, then invest in a third-party tool.
  5. Use your data. There is a reason your company tracks inventory. If something appears out of place, then do some digging.

Friday, August 31, 2012

USA Today Speaks Out: Serious Shortage of Skilled Auto Mechanics Looming

It is interesting that USA Today thinks that this is important … even before Automotive News. Read it at http://www.usatoday.com/money/autos/story/2012-08-28/shortage-of-auto-mechanics-looms/57414464/1#.UECxh2F0t7g.email

Here’s the gist of what they wrote: LOS ANGELES – Jonathan Hernandez figures if he is going to drive, he had better know how to fix cars. And he's well on his way to earning his degree in auto repair from Los Angeles Trade Technical College. “But the 23-year-old does not intend to put his community college credential to use as a career. He plans instead to become a tattoo artist. "I can do a tattoo in three hours and make $300," explains Hernandez, who says he isn't tattooed himself. "Tattoo money is a little easier." Such are the challenges for auto dealers and repair shops looking to recruit the repair technicians of tomorrow. A generation who grew up playing Xbox games instead of rebuilding carburetors doesn't seem to have the fascination with auto repair as earlier generations who grew up as shade-tree mechanics. … Many auto technicians are embracing how the job is evolving toward high-tech. A survey of 5,000 auto technicians conducted by consultant Carlisle & Co. on behalf of six automakers found that the second-biggest reason the technicians chose the profession was that they like working with technology — named by four out of 10. The only bigger reason, at six out of 10, remains having grown up working on cars. (Participants could give multiple answers.) But the same survey also pointed up the challenge: Top mechanics are getting older. Mechanics at the dealerships of General Motors, Ford Motor and Chrysler Group had an average age in the low 40s. "They are going to have to replace them more quickly," says Carlisle partner Harry Hollenberg. … Some students end up talking about a car as if it were a robot from another planet that they can understand. "It can talk to you and tell you what ails it," says Felipe Morataya, 32, of Los Angeles. "You can reason with it to tell you the problem."

Bottom line: Contrast this reality with the silliness of Right to Repair. It seems to say, “nobody really wants to get trained on how to fix a car, but, irrespective of this, they have the god-given right to repair all that stuff they have no desire to spend their time on.” Hmm. Maybe RTR isn’t really for the folks doing the repairs?

Friday, August 24, 2012

MyGuy – The Next Generation Service Advisor

By Charlotte Williamson

I was recently looking for a locksmith, so I turned to my usual online review site, Yelp, for advice. I typed “locksmith” near “Boston, MA” into the search, and the 2nd result had five stars based on 83 results (78 five-star reviews, five four-star reviews).

Hmm, this looks like it could be a good choice.

I clicked on the link for this locksmith, Star Locksmith in Brighton, and began to read through the reviews when the review below caught my eye. After spending the last 3 months researching “MyGuy” and what providers can do to create a “MyGuy” experience, I was surprised to find a review for a locksmith from 2010 that could sum it up so succinctly.

“He’s quick, courteous, professional, and inexpensive…add this to the list of people I will forever call ‘my guy’…’Hey you need a locksmith? You should call my guy.’”

In our last MyGuy Update blog on July 12th, we told you about the top 26 aspects that automotive service customers value the most. We took to Yelp and other online review websites to see how well the 25 participating dealership service departments are rated on these aspects by their customers. Nine of the dealer service departments did not “exceed expectations” in any of the top six aspects. Only four dealers “exceeded expectations” in three or more of the aspects that matter most to consumers.

Of the top six aspects we ranked the service departments on, this locksmith would “exceed expectations” on all of them (or the equivalent, as it applies to a locksmith’s services), based on online reviews alone. He lets you know when he will be arriving later than scheduled (and many customers report that he arrived early, after calling to make sure it was okay), charges reasonable rates compared to other local providers (especially for simple/quick repairs), and accurately informs customers of the total cost before beginning work (often charging less than his estimate in the end). No one complained about the work being done incorrectly, he clearly has a great reputation based on 78 five-star reviews (and no reviews less than four stars), and offered same day appointments to most customers, even when it wasn’t an emergency and required a night or weekend visit.

And after doing all these things, this locksmith is enjoying the reinforcing cycle of potential customers reading his great reviews, using his service, and posting their own glowing reviews about how they found him on Yelp. He is being called “My Guy” and the person they would recommend to any friends who need the service of a locksmith. He has more reviews on Yelp than all but one of the dealerships we researched (the median number of reviews for dealerships is just seven reviews and the dealership reviews include the sales department). Only one dealer has a higher score than this locksmith, but they have a single five-star review. That’s it.

“Has a Great Reputation with Other Customers” is the 5th most important aspect to consumers as they choose a service provider. “Has Positive Reviews on the Internet” is only number 23. But if it’s your online review writers who are telling their friends, “Hey you need a locksmith? You should call my guy.” then we should be devoting more time to our online reputations while taking care of the customers the way they want to be treated.

We have just completed a full deep dive into MyGuy behaviors, practices, and processes and are holding dealer and OEM workshops in next few months to share the findings and insights. Following that we will be embarking on MyGuy certification, auditing, and training programs.

Stay tuned for more information on MyGuy - the next generation service advisor.

Wednesday, August 15, 2012

View From the Inside: Summer Interns and No Exit

What is consulting? It is the intense observation of seemingly reasonable processes to detect unreasonable, inconsistent, or obsolete components. The secret is now
out. Every year we recruit newly minted juniors from undergraduate programs (“interns”) to see if they can do this. This year’s interns came from U of M, Boston College, Harvard, and Bowdoin. Each year’s program consists of non-profit work combined with relevant basic research. The summer is a 10-week stress test, where we and the interns find out if there is a good fit. Harry Hollenberg and Lucy Pullen run the program, and they allow me some interaction with these folks – too much interaction and I become an uncontrolled disruptive influence.

During one session with the interns I was shocked that none had ever heard of Fred Astaire, never read Shogun, and never watched Casablanca or The Godfather. Some had read Sartre’s No Exit, but left that play with no lessons learned. I was concerned about balance – if they were in an elevator and sick to death of the business meeting, could they chat about something relevant and not superficial? So, I put them on a summer reading program. The text box is a lift from an email I sent them (but did not copy Lucy or Harry).

The summer went by, they worked on their non-profit assignments and MyGuy. Hmm, did they remember my assignment? They were released from work last Friday and reported out on their assignments. I got emails from each of them by the end of the day. Following are some excerpts.

“As you might have gathered, we struggled to find time to complete your suggested reading assignments. However, we were all appreciative of the recommendations …. As a math major, I continually seek to find other ways to balance the quantitative orientation of most of my classes. So, some quality literature suggestions are much appreciated. In response to your fifth question, the application of classic literature in my life is in furthering my written and oral communication skills. Classic literature is often a window into a style of speaking and writing that has been abandoned in this text-heavy era. Moreover, as much as society has changed in the past few decades, people truly have not changed that much. Emotions and connections are relatable across generations and it’s important to read literature to help further your understanding of people and the human intuition. I know that’s a lofty statement, but I truly believe that understanding how people think and what motivates them is a key to success in almost every aspect of life, business or otherwise. Even though “smart people don’t read”, perhaps the ambitious ones do. “

“I was honest when I said you would get a response, but I was also honest when I told you the quality of that response was up to interpretation. I am sure that while you are disappointed to hear that we haven’t all made a considerable dent in your reading list, you are aware that our time was limited this summer. I apologize for that failure, but I would also like to utilize the excuse that our hotels didn’t have copies of Casablanca or the Godfather. I did ask. With enough sparknoting/googling we could have cheated our way through your questions, but I’d rather read these books than the one-page online summary. NO EXIT: L’enfer, c’est les autres. As you know, I have already read this book (Huis Clos, as it was meant to be read!), but in relation to work, this book teaches us that certain places or people can be your hell. I have my own environments and personality types that give me that no exit feeling. Working somewhere where everyone is constantly in competition, where people are pretentious. We are taught to want to work in those 30 story NYC buildings where you can’t approach your CEO and have to wear a suit every single day, but is that really fulfilling? Long term, I think that that is a secret no exit. Regardless, my definition is constantly evolving. Part of this project was dealing with your no exit moments, and part of life is about knowing what no exit is for you and how to avoid it. “

“I have three very large books sprawled out on the back seat of my car and I just received three library letters asking me to renew those books…again. In terms of the extra credit, you set a high bar for us interns. It was so high that it became unreachable and when it became unreachable it vanished. I could sift through the internet in order to piece together bits and fragments of the answers you’re looking for. I could concoct a story and hand you a “bar.” Perhaps, I could learn to wave this bar as gracefully as Astaire would have. He’s quite the performer isn’t he? Then again, Erving Goffman would suggest that we all are. Yet, Fred is not just a mere performer. He’ll put on quite the show and then he’ll step back and let his partner shine as well because the show is only exceptional when all the players are moving harmoniously. Some would suggest that true brilliance is not born out of agency but out of well integrated community. Even if you’re trapped in a room with two others and conflicts are arising, you’ll break free if you transform the dynamic. You have to understand your peers’ strengths, weaknesses, aggravations, and delights. Only then you’ll realize that this room has resources that can be tapped into and your peers can see things you may not be able to see.”

Hmm. Even if you’re trapped in a room with two others and conflicts are arising, you’ll break free if you transform the dynamic. You have to understand your peers’ strengths, weaknesses, aggravations, and delights. Only then you’ll realize that this room has resources that can be tapped into and your peers can see things you may not be able to see. I never thought of No Exit in that way. I suspect Sartre was hoping we all would.

Bottom Line: I should not have been concerned. At the end of the day, the interns wowed me. For MyGuy, they developed comprehensive dealer report cards based on internet reviews and mystery shops. They went on the road and visited 20-30 dealers and observed seemingly reasonable processes. And, they were able to detect inconsistencies that we had not seen before. They thought, and thought well.

Thursday, August 9, 2012

Dear AARP, I Don’t Get Your Mentioning of RepairPal As a ‘Great Way to Save'

AARP lists using RepairPal as a great way to save and find out what the “job should cost.” So, I thought I would give it a try on my iPhone.

It was easy to download the app and plug in the information for my Ford Escape. Acton Ford is a few miles down the road and has a reputation for best-in-class service; some people in my office take their Hondas there.

I plugged in a repair for front brake pads and rotor replacement and got back a wide range of prices that indicates what this might cost, but gives me no clue on how to save. The price ranges for both parts and labor are huge and I’m stuck scratching my head.

I asked RepairPal for recommendations on where to go. They want to send me to places that have lots of stars … but, almost no reviews. The top recommendation was 18 miles away (30-40 minutes), and if I wanted a “specialist” they wanted to send me to a car dealer 11.6 miles away … one that does not sell Ford products. Hmmm.

Ron Bouchard had only one RepairPal review, but six Google reviews. Six was not enough for Google to make a qualified recommendation on Ron, so I had to read the reviews. (RepairPal is not burdened by the messy laws of statistics.) Three of Ron Bouchard’s six reviews were pretty awful – a tad old, but still, 50% of the reviews were thumbs down.

My local Ford dealer was three pages down the list in digital “Siberia”, unrated, and only 2.6 miles away. And, he is pretty wonderful.

Bottom Line: So, AARP, did RepairPal give me even a tiny clue how to save money? No. They wanted to send me to repair locations that were miles away, had irrelevant or just plain bad customer reviews, and gave me no real help determining what the repair might actually cost. Sure, they gave me a mighty range of costs, but so could my Grandmother. Shame on you AARP. I wish I was less than 50 years old so I wouldn’t get so much of your junk mail and junk ideas.

Best regards,

David P. Carlisle