Friday, March 8, 2013

Moving from Inside-Out to Outside-In

Service departments are dominated by one central principle: “you have to sell to make money”. Employee compensation is often based on commissions or quotas to encourage up-selling. However, leading businesses are now shifting from traditional approaches to new ways of thinking – they’re changing from an “inside-out” approach to an “outside-in” approach. Inside-out thinking is the traditional method: “You take what we make.” The latest shift has been towards an outside-in mindset: “We want to understand your problems and solve them.”

No one does retail and service better than Apple. Walking into one of their stores is an experience in itself; they provide a fun atmosphere with interesting gadgets and friendly staff. Even customers waiting at the Genius Bar with shattered Macbooks and broken iPhones seem thrilled to be there. Computer repairs are no more enjoyable than car repairs. Yet, Genius Bar customers seem delighted, while auto service customers seem miserable.

Apple accomplishes this by using an outside-in approach. In 2011, internet bloggers got their hands on Apple training materials for new employees. Employee turnover is often high at Apple stores, yet Apple still invests heavily in hiring and training the right talent, because they understand that this drives their bottom line. The training manual revealed Apple’s attention to every single detail and its focus on the customer experience. Employees are trained not only on technical product knowledge, but also on customer psychology and even on how to avoid negatively toned vocabulary. However, the most revealing lesson is this: Apple trains employees to solve customer problems, not to sell them products. Selling products and servicing them are byproducts of the company’s true business: delighting the customer. In fact, Apple Stores don’t even have cash registers. They’ve removed all of the traditional retail and service reminders. As a result, customers love doing business with them.

I’m not going to waste keystrokes highlighting the need for the dealer service business to shift from an inside-out approach (customers buy what we make) to an outside-in approach, and the need to revamp training programs accordingly. Just consider this – your business is no longer just about making the upsell. Service customers no longer have to “take what you make”; there are too many other options. Instead, service departments must focus on delighting the customer by understanding and solving their individual problems. Don’t focus on the cabin filter upsell when your customer doesn’t need it and doesn’t want it. Focus on working with your customer to identify real needs and figure out how to meet them.

Bottom Line: Your dealers’ first priority should be to delight the customer – this will ultimately drive the bottom line.

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