Tuesday, February 24, 2015

Is Driving Becoming “Passengering”?
by Ilia Gorelov

In-vehicle infotainment systems, autonomous vehicles, and Uber: What do these all have in common? They’re technologies and trends that are converging, slowly turning driving into “passengering”. What’s “passengering”? Well, it’s being a passenger: going from point A to point B, but not piloting yourself. We’re all slowly becoming passengers.


There are three elements contributing to this trend:
  1. The human need to remain “connected”, now being facilitated by our vehicles and making driving an inconvenience
  2. Our vehicles’ increasing ability to take over basic driver inputs like braking and steering, diminishing the role of the driver
  3. The rapid growth of on-demand taxi and ride-sharing services from providers like Uber which are providing increasingly cost-effective substitutes for driving
Let’s explore #1. People, with the help of technology, are slowly overcoming a challenge that has existed since the dawn of civilization: boredom (Link Here). We increasingly feel the need to remain connected and consume information. Waiting for a ride? Check your Facebook. On a boring conference call? Read your email. On a bad date? Tweet about it while he/she is in the bathroom. Multi-tasking has taken on a whole new meaning. Why not multi-task in the car?


Vehicles are becoming cogs in an ever-connected world, linking drivers to their cellphones. In many vehicles, we can now use voice commands to read and respond to emails/text messages, make calls, pull up directions, manage and play music, and get other information like news, weather, or traffic conditions. These features are useful and conveniently accessed through our vehicles – and they’re a safer alternative to using a phone while driving. But what’s the impact on the actual act of driving? Well, it’s almost becoming a secondary function. It’s an inconvenience. Why drive, or be bored, when you can spend this time doing other productive things? What if we didn’t have to drive?


This brings us to point #2. Autonomous cars are slowly becoming a reality. Many new vehicles now come equipped with features that can manage basic driving inputs: adaptive cruise control, radar-based brake assist, and intelligent parking systems, to name a few. Autonomous test cars have already been “piloted” on public roads in the U.S. and Europe. Further, in 2014 the U.S. Department of Transportation announced that it will begin taking steps to enable vehicle-to-vehicle (V2V) communication technology for light vehicles. V2V communication can help take today’s autonomous vehicle technology to the next level. Though we’re still years, if not decades, away from a world in which autonomous vehicles rule the road, we’re seeing that slowly but surely, the role of the driver is being diminished. Just take one look at the airline industry to see where we might be heading.


Finally, let’s look at point #3. There’s this new thing called the “sharing economy” in which “regular” people provide services or rent property to other “regular” people. If you’re going on vacation, you no longer have to stay in a hotel – you can rent someone’s apartment on Airbnb. If you don’t have time to run some errands, hire a TaskRabbit to do them for you. Need a ride? Call an Uber. Ride/car sharing is the fastest growing segment of this new economy. There are just so many vehicles on the road and they spend most of their lives parked somewhere.


So what the heck does Uber have to do with driving becoming passengering? Well, for one, services like Uber (UberX, specifically) provide a real, cost-effective alternative to car ownership, especially in urban areas. I own a car in Boston, but frequently use UberX to avoid the inconvenience of getting stuck behind the wheel in traffic, looking for parking, etc. When I look at the blue Uber coverage map of Boston, I begin to question whether utilizing UberX could actually be financially advantageous to owning my own car (after all, coverage extends well beyond Carlisle’s Concord offices). In fact, imagine that blue area expanding out from Uber’s 250+ cities across the world. How far can we really go in an Uber? Could I visit family in New Jersey by simply hopping in various Ubers across the eastern seaboard? Could I go cross-country? Sounds like an interesting idea for a documentary.


So how do these 3 trends tie together? Well, imagine a world in which a fleet of connected, autonomous “Ubers”, immediately available upon request, take you anywhere you want to go. As soon as you get in, your phone and personal preferences are synced with the connected vehicle and you’re alerted to the weather, traffic conditions, breaking news, incoming emails, schedule for the day, etc. You only pay for the time/distance travelled, or maybe you buy a “family travel plan”. Even as a self-proclaimed car guy, this sounds pretty convenient, efficient, and appealing. Maybe passengering isn’t so bad. Maybe I don’t even need to own a car. Well, maybe a Z06 for some weekend fun…


Bottom Line: As vehicles become more connected and autonomous, driving is taking a back-seat (literally) and the role of the driver is diminishing. Further, readily available and cost-effective ride sharing services are providing real substitutes to driving. Combine all of these trends and one day we’ll all be passengers.

Thursday, February 19, 2015

Managing Customer Service Satisfaction Is Easy: Make Them an Offer They Can’t Refuse
by David P. Carlisle

Customer service satisfaction is a subject with which we are all very familiar. So familiar, in fact, that we tend not to pay any attention to it, because we’ve seen it all. There’s nothing new.


Well, maybe we are wrong.


I, too, was a jaded been-there-done-that kind of guy until a few weeks ago, when I received a letter from my pickup truck dealer.


I had previously dinged this dealer in a survey when they tried to sell me an air filter double-netted to around $135 retail. The service manager called me up at 7:00 in the morning with hurt in his voice. He apologized, and we remained friends. That was over a year ago.


About a month ago, my daughter took the pickup in for routine service. The service advisor sold her a radiator flush – she accepted, because she trusts this dealership. Then, a few days after the service, I got a barrage of service satisfaction emails. I gave my dealer perfect scores and checked the box that it was OK to share with my dealer, but I commented on my dissatisfaction with the radiator flush. I was honest in saying that I was not satisfied, but knew that the imperfect scores I should have given would have proven overly traumatic to my dealer.


I never heard anything back from the OEM or dealer about my dissatisfaction. Hey, I gave it a shot.


Then, a few weeks ago, I received an offer that I could not refuse: my dealer paid for compliance. They sent me a $25 gift card as a token of appreciation for my “complete” satisfaction.


Let’s Take a Step Back:


I am used to:
  • “Stamps” on my repair order asking me for perfect scores.
  • My service advisor begging for perfect scores and telling me that his income would significantly suffer if they were to get anything but perfect scores.
  • An elderly woman calling me after my service appointment, reading from a script, and asking me if I was less than completely satisfied.
  • The letter from my service manager asking me to call him if I was not completely satisfied.
  • Filling out the dealers’ separate satisfaction survey that seemed designed to encourage score perfection.
  • Finally, getting a manufacturers survey at the end of all this.
  • And, of course, being positive that all this interference simply spoils the soup, rendering the satisfaction survey stupid.
However, I am not used to getting a gift card for $25 in appreciation of my deceit.
To me, the gift card was spot on. I do not have to be bribed to come back to my servicing dealer, but the $25 tells me that he is trying—really hard—to make the factory happy. My dealer’s service manager also wants me to be happy with his operation – he takes great pride in it, but he knows that he really cannot sustain perfection. The $25 is his way of “winking,” and thanking me for “perfect scores.” And, it has nothing at all to do with actual perfect satisfaction.


Bottom Line: The lesson here is that the millions of dollars OEMs spend on what seems to be completely bogus satisfaction surveys actually can make a difference. It is not about the scores themselves — we all know these are useless; it is about things like my dealer’s incredible act of creativity. My dealer chose to thank me for playing the game, rather than simply urging me to lie. Through this interaction, we winked back at one another. As a result of this, our relationship has been humanized, and I am still loyal. Well done.


Wednesday, February 11, 2015

Luxury Owners; No, They Just Seem To Be Difficult
by David P. Carlisle

We conduct a lot of owner survey research where people tell us about themselves by checking certain boxes. “How satisfied are you with Brand-X’s dealer experience?” They check one of five boxes, ranging from “Very Dissatisfied” to “Very Satisfied.” “Why are you dissatisfied?” They check one to three things off a list. We tabulate the results and profile cluster of dealers. But, still we wonder. Toyota teaches the “Five Why’s” as part of their Lean training. Ask “why” five times and you will usually get at what’s really going on. You can’t do that in a static survey. That’s why we have a focus group facility in our offices.


I recently moderated two very different customer groups. One was a group of typical Volvo owners. The other group was from BMW, Mercedes-Benz, Lexus, and Audi. Day and night. The Volvo group was composed of people who had made fairly clear lifestyle choices with safety as their core value.
  1. Why do you own a Volvo? I like it.
  2. Why do you like it? It drives well.
  3. What about it “drives well"? You know, it is the whole experience.
  4. Is there any part of the experience that sets Volvo apart? Sure.
  5. What is it? It is the safest car on the road and I value myself and my family.
Ok, it doesn’t come out exactly like that. But, you always will get to “safety” within the Five Why’s.


With “safety” as a unique core value, Volvo owners are pretty much OK with what’s offered up in the ownership experience. Do they mind waiting for service in the waiting room? No problem. Do they expect a loaner car or alternative transportation? Well, that stuff would be nice (and they do receive it), but they don’t sit and stew over it if it isn’t perfect. They chose Volvo. They get pretty much everything other luxury vehicle owners get, but they do not have the same feeling of entitlement or value dissonance.


That was “day.”


Time Out

Well, the Volvo Focus Group looked pretty good, … but it did not foot to the numbers. We expected higher-than-normal levels of customer retention from Volvo, based on what we heard in the Focus Groups. So, we decided to listen to a different “luxury” owner group that just consisted of BMW, Mercedes, and Audi owners.


Now to “night.”


I sat down with the other “luxury” owner group and frankly expected more from them. Each had spent a lot of money for their brand choice, and brand statement. They were entitled, and nobody’s fools. The following isn’t a direct transcription, but it captures the essence of this group.
  1. What are your expectations for alternative transportation? Just get me out of there as fast as possible. I am too busy to hang around the waiting room of my dealer.
  2. What are your expectations for the waiting room at the dealer? I don’t care about it; I never want to be stuck there.
  3. What do you think about going to your dealer for service outside warranty? You think I’m nuts? I never go back because their charges are exorbitant. I take my car to “my guy” in my town and I trust him.
  4. Why do you think the costs are exorbitant? Just look all around you at one of those ‘palaces.’ You know who’s paying for it? Me! Well, not “me” because I would never consider using them outside warranty.
  5. But, what if you were treated differently? What if the service advisor was also the technician and there was no handoff? I don’t care about that. Hmm. OK, it would be better. But, I’m not going to pay for those palaces!
Time Out

What’s the logic that connects happy Volvo owners with lower service retention to unhappy upper-luxury owners with higher service retention? I suspect that the logic tether that connects all this together is affordability. Volvo owners might stretch more to purchase their vehicles, justifying the stretch not as a brand statement, but as a precious investment in safety. Money is precious to this group and they tend to shop more outside the dealer to stretch their service dollar. Upper-luxury owners, especially those where the volume is at the bottom of the brand chain, love to talk about how much they pay for service, how it is simply outrageous, and how they won’t stand for it after warranty. Those at the top of the brand-chain simply don’t talk much about this sort of stuff … and are not likely candidates for a focus group. But, for all of them, time is more valuable than money. So, they tend to go back more often to their dealer for service simply because it is easiest and quickest.


Bottom Line


If one had struggled to create a beautiful architectural service solution, struggled to hire professional staff, struggled to have a perfect waiting area, and struggled to offer brilliant alternative transportation, … maybe even struggled to go beyond what you expect is expected … and all you heard was this whining … what would you conclude? You might conclude that these customers were difficult. Brats. And, you would be wrong. They just don’t value much the stuff you think they value, and are offering. For them, increasing service retention takes a different kind of currency. For Volvo customers, the “currency” for this barter arrangement seems to be perceived “affordability.” For the upper-luxury customer the realm’s coin seems to be “time.” It might just be that simple.


One Last Thought


I do not think it is uncommon to build a world that customers don’t want to live in. Ex-K-Mart shoppers don’t think much about all the work that went into their K-Mart shopping experience. They just don’t value it or like it. So, they go to Wal-Mart or Target where they get what they value. Lesson? Understand what your customers value and give it to them. Don’t dress up what you value and think it represents a fundamental truth.