Amazon and Zappos have emerged as the relevant benchmarks for buying experience and problem resolution. Why? They understand that the game is all about no-hassle simplicity. Again, the chains get this. But, there are huge roadblocks in front of the OEMs. First, service advisor pay-plans stand out as a kill shot. We recently hosted a focus group of top service managers and discussed this. Service advisor pay typically has a commission component; they are paid to load up repair orders with things like flushes, and to “manage” the customer feedback to make sure they get “all 5s.” There is nothing evil or sinister about this, the dealer just wants high service profits and the OEMs want high satisfaction scores. Thousands of dealer service advisors do this quite independently – make that the lion’s share of all service advisors. OK, good service managers spend a fair amount of time monitoring this feeding frenzy and try to keep it inside respectable boundaries. But, they are swimming against the tide in their own shops. The chains know this, and so do the service customers who admire Amazon and Zappos. The second set of roadblocks are the initiatives and programs that each OEM launches to fix the service experience. Each OEM’s grab bag of improvements is different. And, each grab bag contains dozens of separate programs, none of which fixes the service advisor pay plan “iceberg.” With dozens of things to do, all having competing high priorities, no single most important thing floats to the top. Worse yet, in a recovering automobile market, the dealer and OEM’s attention typically goes to the glamorous side of the business – the showroom, where they sell vehicles with totally acceptable paper-thin profits. In the short term, “MyGuy” (http://www.my-guy.com) service principles can maximize dealers’ current operations with minimal investment. However, the reality is that the tide will eventually push the survivors into chain-like systems with big investments and high technology; it’s already happening. The service advisor will simply be an order taker, selling from a menu. What’s the role of MyGuy in this world? It will be the difference between a 7-Eleven and Trader Joe’s – market share based on personal preference. The key is to lay the foundation now, so that you come out with superior performance and reputation. So, can dealer service operations become more chain-like? Yes. In fact, that’s all Blake Price does at SOS. Consider Dealer Tire – they have transformed dealer tire businesses during the past decade and proved that you can regain hopelessly lost share. And, that you can do this out of the current dealer footprint. It is all about people, leadership, and “feet on the street” – real human beings working with dealers to transform their tire business. OK, it’s also about lots of local warehouses and leveraged purchasing agreements with tire manufacturers to support these dealers. So, yes, it can be done and there is ample proof of this in the market. Dealers can evolve their business models to make them more compatible with service customer expectations and preferences, and, by doing so, become more competitive with the service chains. They can build it. The trick is getting the customers to come This should be the easy part, because it involves technology that favors the OEMs. Replacing the traditional service advisor is the de facto role of telematics. This is where companies like Agero and OnStar shine. The vehicle diagnoses what’s wrong, what to do, and where to go. OEMs pay for roadside assistance; Agero’s Cross Country is the market leader here. All the tows should go back to the dealer for maintenance and/or repair. The major limitation here is the handoff to the very human dealer service advisor. Appointment scheduling? Xtime is the market leader here, but there are others. Service customers can be funneled into web-based dealer service scheduling from a variety of sources – the most prevalent today are the scheduling call centers. Once customers have been funneled into the dealer service line, mobile tablet-based technology can help deliver a more desirable McDonald’s-like experience, stressing simplicity and repeatability versus accuracy. This helps control the adverse effects of avaricious SA pay plans. (Xtime's “ServiceTab” enhances the accuracy of check in and diagnosis by capturing information digitally and imposing discipline on the check-in process. It captures images with its built-in camera and can record strange sounds so the technicians can hear exactly what the customer hears. It's a pure win-win.) There’s more. Dealer wholesale programs, performance terms and conditions, and RIM. All these programs and technologies support having the service-parts in the market in time to meet demand. All of these must interact with the dealer’s dealer management system (DMS) technology. Historically, DMS providers have been notoriously difficult and expensive to deal with. Not so with Dealertrack’s cloud-based open platform. The dealer’s investment in computing power is now shared with other web-based customers, and integration is like hanging a hammer on a peg board. Dealertrack has ample market share to prove that this is a viable, and desirable, alternative solution to … the others. The trick here is integration. Nothing’s stopping this from happening. But, little is starting it. So, what can you do with all this? To survive in the jungle you have to understand prey and predator principles. Dealer service operations are the prey. The chains are the predators and they are getting stronger and faster. Understand that this is true and represents a call to action – the window of survivability is closing on us. Here’s what you must do:
- In the short term, you have to become more MyGuy-like to lay a foundation based on superior service quality and experience.
- Understand that the game will be over in a mere flash of time – you need to dream up strategies, develop them, launch them, and harvest them inside of five years.
- Make dealer service operations for maintenance and repair more chain-like. This spans from quick-lube to quick-light repair. Ford’s Quick Lane and Dealer Tire should be your examples of future success.
- Get onboard telematics technology and use it to actively diagnose what’s wrong, what to do, and where to go. Make it very Amazon-like.
- Make sure you funnel all your roadside assistance tows back to capable dealers.
- Get a technology provider to funnel service customers into dealer service shops with web-based scheduling and tablet-based service advisor inspection and concierge capabilities.
- Support these “build it and they will come” technologies with performance terms and conditions, RIM, and wholesale initiatives that tie into the dealer DMS technology. Use Dealertrack as your benchmark for how easy this should be.
- Ultimately, integrate all your technologies to support growth strategies – providers who “get it” are waiting for your calls.
- Measure your success by using share-of-wallet metrics, not just gamed service customer satisfaction.