Friday, January 31, 2014

Let’s Talk About Service - The Heavy Equipment Edition

How well do you know your dealers’ service drive?
  • How many units in operation are retained by each dealer?
  • What are customer pay sales for parts and labor per repair order or UIO?
  • How satisfied are your customers?
  • How productive is your service drive?
  • How effective is your service drive marketing?
Based on a recent Heavy Equipment Service Focus Day, it seems that the answer to many of these questions is “I don’t know, but I sure would love to” – at least for five Heavy Equipment OEMs who took the first step toward a North America Heavy Equipment Service Benchmark.

We looked at which key service drive metrics would have the greatest impact, and how hard the data would be to collect. As you’ll see below, a key challenge is the lack of accurate Unit-in-Operation data and UIO-to-owner linkage. And that’s only one piece of the puzzle. Here’s a quick overview of the metrics discussed:

Let’s take a step back. For the last five years, Carlisle’s North America Service Benchmark (NASB) has been an extraordinary forum for automobile OEMs to:
  • Promote continuous improvement in Service Operations. By benchmarking leading industry practices, the participants develop unique insights, and they also create action-oriented benchmark metrics to measure and improve company performance. When industry peers get together this way, they can solve tough day-to-day problems.
  • Increase the effectiveness of their retail service channel to better compete against the independent aftermarket.
  • Identify opportunities to improve and grow the business;, which will make dealers and OEMs more profitable.
This year’s session identified 925 unique metrics across categories such as customer retention, sales, satisfaction, capacity, marketing, quality, and productivity. We focused on the threat chains pose, and how to utilize maintenance plans and package pricing as a competitive advantage.

Apart from the NASB, Carlisle has conducted surveys (in both the automotive and heavy truck segments) to learn more about service technicians and service advisors. We launched MyGuy, a website that puts our research into the hands of service advisors and OEMs, and showcases how best practices at the dealership relate to market share. The website contains tips from top-performing dealers, focus group clips to highlight the customer’s voice, as well as a weekly blog to synthesize our findings.

Speaking of which, how well do you know your technicians and service advisors/writers – you know, those people who are your customers’ main point of contact?
  • What’s their average age?
  • What percentage is male vs. female?
  • What’s their educational and professional background?
  • Are they certified and if so, to what level?
  • How long have they been with your dealers?
  • Do you provide role profiles and/or recruiting support to help your dealers get and retain the right people?

The picture we got in Chicago when five OEMs from both the agriculture and construction industries met was pretty bleak – only a couple of these OEMs tracked any attributes of their service advisors/writers or technicians. If we don’t know them, can we be confident that our customers experience the service we want them to have?

I doubt it.

Our participants doubted it too.

So, what can we do as an industry? For one thing, we can get smart about our service drive: What do we measure to assess success? How can we get the data? What can we discover from the work that’s already been done in the automotive and heavy truck industries? What topics move our industry? Which topics should we discuss in a collaborative forum? How can we give our customers the service drive they expect and deserve? Here’s what we learned in Chicago:
  1. The participants have an appetite to learn more about the Heavy Equipment-specific data and challenges in the service drive.
  2. Getting this data might not be easy or quick or perfect, for that matter, the first time around.
  3. This is why we should start now – as a group that will grow and learn and benefit from this effort together.
Bottom Line: Let’s get serious about our service drive for Heavy Equipment OEMs – what to measure, how to measure it, how to improve it. Let’s start now. Give Gene Metheny a call at 314.324.4395 if you’d like to learn more.

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