When Close Isn’t Good Enough

By December 9, 2015 December 21st, 2016 Service Drive, Think Tank

Multipoint Inspection Process Provides Crucial Data In Today’s Fixed Ops World

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As featured in Fixed Ops magazine Nov/Dec 2015 edition

Data is not a terribly exciting conversation for most people, but without accurate and precise data, most business professionals are hard-pressed to make decisions based on a high degree of certainty. Data is the foundation of a complex and highly intricate model that takes base data and through transformative actions changes it into information, which in some cases morphs into knowledge and, on rare occasions, reaches the pinnacle of value — wisdom. If the core underpinning (data) of this iterative process is flawed, the results upstream can send a business in a direction that has no chance of achieving the desired results.

During my 30-year career in providing IT-based solutions for use with automotive dealerships and their corresponding OEM counterparts, I’ve learned one important lesson — when it comes to Fixed Ops data, close is not good enough.

If You Can’t Measure It, You Can’t Improve It

A dealership Fixed Ops Manager is looking for ways to increase the revenue generation of his repair facility. Growth is important to every business, and there are many possible investments that could be made to stimulate growth. When the Manager looks at his business metrics, he believes that every customer interaction is already being maximized and that the key to growth is to drive more customers to the shop.

Unfortunately, the Manager has no way to truly evaluate what is occurring with each customer interaction, but only a best guess when it comes to which clients’ vehicles are being inspected for additional repair opportunities. The Manager has even less visibility of what is being presented to which clients and who is or is not purchasing. Every good Manager has a sense for what is or is not working in their business, but with no true performance data to back up these senses, for many it’s just guesswork.

Inspection-based Selling That’s Measurable

When a dealership has no precise way of measuring and monitoring inspection results and is asked, “What percentage of your customers’ vehicles receive a multipoint inspection (MPI) and how often are the results shared with the client?” it’s likely to get a stock response. That would be something like, “Every vehicle that rolls through my shop receives an inspection and I am confident the results are always delivered to the customer for consideration.”

Yet data shows us that the best-performing dealers operate at a level of approximately 50 to 60 percent inspection rates, and yes, nearly all of those are presented to a customer. But the normal range for many dealerships is 13 to 24 percent receiving an inspection and less than 50 percent of the results ever being shared with the customer. In these cases, before the Fixed Operations Director embarks on a costly advertising campaign to drive more business into the Service lane, wouldn’t it be prudent to increase vehicle inspections and sharing those inspection reports with customers who have already opted to have their vehicle serviced at the dealership?

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Understanding the Full Picture

In another scenario, a dealership staff does a very good job of performing vehicle inspections, and presenting inspection results to the customer. The dealership’s topselling Service Advisor (in terms of dollars per RO) runs at a 50 percent increase rate over his nearest peer. The Fixed Ops Manager is thrilled with this employee’s result.

However, a separate problem that the manager is dealing with is low Customer Satisfaction Index (CSI) scores. As the Manager starts to dig deeper, an unusual trend emerges. The top-selling Service Advisor consistently has the lowest CSI and many customers have stated they will not return to the dealership for further work. As the Manager assembles different data elements, it starts to paint a picture that provides the information that becomes an “a-ha” moment. The top-selling Service Advisor is so overly aggressive in securing customers’ commitments that, although they buy on the day of Service, they feel pressured and oversold and vow to never return to the dealership for Service again. The lifetime value of a Service customer can easily runs into the thousands of dollars. Driving a customer away to secure a single sale to the detriment of this lifetime value is a horrible business decision. Accurate data is the basis for this Manager to coach the team member into selling less — so that the store’s trust factor can be elevated and customers can commit to having all their Service needs handled at the dealership.

Precision Quoting Creates Certainty and Trust

For a dealership to be competitive in today’s vehicle Service market, it must be able to quickly quote a repair (via phone, email or in person) that is precise. The repair needs to encompass all the OErecommended components along with dealership shop supplies, taxes, labor and dealer-based pricing. This means that repair operations need to be a joining of OEdefined, dealer-defined and market-defined data. When a dealership utilizes just one or two of these elements, they may be close on price.

when-close-isnt-good-enough-inspectionIn today’s ultra-price-conscious world with Internet speed transparency, close doesn’t win. Missing a quote by just a few dollars can mean either the customer will not do business with you, or may mean the difference between a solid margin repair and a poor deal. It also can mean the difference between a repeat customer or not. How confident are you that what was quoted from the time of initial communication to the point where the consumer is standing in front of your cashier and paying the bill will match to the penny?

“When it comes to using a data-driven MPI process, customers like it. Customers are actually asking for their MPI results and know what is going on with their car,” said Jim Gruman, Service Manager of Patrick Hyundai Palatine in Palatine, Ill. “Before we implemented this digital solution, I don’t think our customers held as much value for the MPI because the information was not concise, specific and detailed.’’

Redefining Terminology

The term “data” is thrown around very loosely in our industry. I am proposing that we enact two new terminologies: True Data and False Data.

Having the True Data seal of approval would be analogous to a UL Listed Seal or the Good Housekeeping Seal of Approval. Dealers and OEs relying on True Data would know with certainty that the basis of their decision-making was founded in fact, not fiction.

The next time you’re working with a thirdparty provider or market entity that touts the value of their data to supporting your business operations and decisions, dig deep. Uncovering True Data is like finding gold. It doesn’t exist everywhere and there are items that try to look like it (fool’s gold), but when True Data is found, it has high intrinsic value to you and your business.