Friday, January 4, 2013

We Have Launched … Why In The World Did We Do This?

David P. Carlisle
MyGuy is all about the service experience and dealer service retention; it is why supply chain folks exist.

OK, this is the Part II of our 12/13/2012 blog ( that helps explain the “why” … why we, Carlisle & Company, need to focus on the transaction itself, and not just the processes supporting it (i.e., supply chain, sales, marketing, T&Cs, etc. … all that stuff we do).

As expected, just before Christmas I received a notification from GM asking me to rate my Soup Nazi dealer experience. I told the truth and said that it was OK to send the survey to my dealer – I had already made up my mind not to go there anymore. I said that I had not received a trusting experience and would not recommend anybody go there.

Well, a week later at 7 a.m., Steve, my very sensible Chevy dealer service manager, called me at home. He said he woke up at 5 a.m., went online, and was devastated to find my service survey … he knew me to be a long-time faithful customer. He was genuinely distressed and contrite as he asked me what had happened. I told him the story I related in the Soup Nazi blog.

Our conversation reminded me of a time when my 70-year-old mother asked me what I did for a living. I told her I was a consultant. She replied, “No, really, I mean, really, what do you do?” We never connected that day. I never connected with my Chevy service manager either.
The service advisor told me he was charging $95 to check the “check engine light” code. I told this to Steve and said I could buy a device for $24 to do this with my cell phone. He explained the rationale behind the $95 charge. It made no sense to me. We did not connect.

I told Steve that the service advisor called me and said my air filter was dirty and that he could replace it for $140. I told him that I bought an ACDelco replacement filter on the web for $38.59. Steve said his price for the filter was $75. I told Steve that his parts department was double netting the price and selling them to service for $75, and that service was nearly double-netting. We simply did not connect on this.

In my Soup Nazi blog I listed 10 things that went wrong during this service experience. I mentioned a few more to Steve, but we just never “connected.” I really appreciated our talk. Steve is a good guy, but he was just doing business as usual. That’s not enough in today’s market.

Immediately after my Soup Nazi service experience I was pretty ticked off. No longer. I am merely sad. I’m probably going to look for someone else to do my Chevy non-warranty work.

How do you fix this?

After all of these years, I think we all agree that this is an extraordinarily complicated problem to solve within the OEM-Dealer relationship.
Everybody thinks dealers are the high-priced spread. This comes out very strongly in our surveys and is a major issue with service customers. Dealers are typically set up as multiple profit centers: sales, (used car), (F&I), service, and parts. Armed with free Internet facts, customers negotiate aggressively, resulting in gutted new car margins. So, dealers make little on the actual sale of the vehicle, but more than make up for it in F&I and used car. Sales, used car, and F&I work together to net reasonable and competitive margins.

Why can’t parts and service figure out how to work together? Dealer parts departments can double-net price fast-moving filters when they “sell” them to service located 35 feet away. Then service has to make a profit. At the end of this profit daisy chain, we have pissed-off customers who feel that the dealer is ripping them off. Look at the chart. This is very important to them.

The fix is actually very simple. Dealer service departments need to understand that they will be successful only if they are competitive in the eyes of the customer – the same lesson learned by the front-of-the-store decades ago. They must come to this awareness completely and must own it. The factories can’t help. They are too prescriptive and focused on mass conversions, not patient self revelations.

So, here’s the plan:
  • The MyGuy website is up, running, and completely free.
  • It speaks directly to Service Managers and Service Advisors, not down to them.
  • It will leverage everything we have researched and what we know in this space – this is considerable.
  • Although it targets only service operations, it is a shotgun blast that anybody in the service arena can use. Chains and IRFs, too. I’m OK with this.
  • It explains what customers want, what to do, what the expected outcomes will be, and couples all this with quantitative research and best practices.
  • It will use a lot of short videos – of customers, of non-dealer operators, and of best-practice dealers.
  • It will be updated weekly.
  • The only thing for sale on the MyGuy website will be MyGuy certification … and we aren’t pushing this very hard. Certification is like a church – you have to believe in God before you buy a cathedral.
I will be spending most of my time on MyGuy – it will be fun for me and it will enable me to make a difference. I have the patience of Job on this.

Visit now to learn more.

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