Information TechnologyCommentary & Insights

“In 1995, as web adoption was excelling and Internet browsers were engaging users I realized three key things. One, there was a clear opportunity for manufacturers and dealers to improve their profitability by focusing on the service side of the business. Two, the need was underserved by the existing software and three, technology trends were showing opportunities to enhance the entire process for all stakeholders throughout the service and warranty ecosystem.” The MAPconnected Vehicle Service and Warranty Lifecycle Summit 2022 is approaching. A collaborative conversation, led by some of the most brilliant minds in the industry, will be hosted at the Westin Southfield Detroit on the 25th - 26th of October. We had the opportunity to sit down with Ashok Kartham, Chief Product Officer at Syncron .  In the early 90s, Ashok was working at John Deere in the warranty and product support area when the future that he envisioned, one based on using technology to greatly improve the process and profitability of the warranty environment through enhancing communication, became a clear objective.  “Most existing software systems such as ERPs and CRMs were not addressing the needs: better communication and collaboration between the OEM and the dealer network,” mentioned Kartham. Parts, Service and Service Contracts could generate higher margins for the manufacturer and, the entrepreneurial streak in him, understood how. Ashok went on to build and launch 4CS in 1995 which was later acquired by PTC Inc in 2011. Just one year later, once the integration was complete, Ashok launched Mize. He said, “there was an unfinished opportunity, mobile was being adopted by consumers. Companies could leverage mobile technology to enhance customer experiences by improving service delivery to the end customer.” Mize allowed for the next part of Ashok’s vision to take hold, “by using mobile technology to deliver a connected customer experience, the Mize platform supported increased revenue for manufacturers and dealers.” Mize used both web and mobile technologies to enable field technicians and call centers. Often, field technicians are the interface between the dealer or OEM and the end customers. Mize focused on ensuring easy access to product knowledge, and by doing so, empowered technicians.  This approach was also adapted within the aftermarket parts space. Kartham went on to say, “the biggest problem was that the data was not connected. Services were processed manually and customer problems took days to resolve which led to frustration." When data is not connected, stakeholders are not connected and processes are not connected, the business becomes a collection of siloed systems, “we saw the need for connected experiences.” Syncron has a similar vision: Empower manufacturers to capitalize on the new service economy. Syncron merged with Mize in 2021, Kartham describes how this integration allowed his vision to be truly realized.  “Manufacturers are now focusing on offering their products as a service, whether it is equipment as a service or within automotive mobility. In order for that to be achieved, there are a lot of pieces that need to come together on the service side.”  Syncron serves many of the same customers as Mize did, automotive, heavy equipment and industries with high value, durable goods that are complex. “We had a common vision on the service side but also had complementary products”, Kartham noted. Syncron is the leader in parts inventory optimization and parts pricing. Mize had products in the warranty, service contract and field service space and together, the vision of a connected service could be realized at a much faster rate, accelerating the scope of offering and “serving hundreds of major manufacturers on a global scale in terms of our combined vision of connected services.” How is Syncron uniquely positioned to meet the needs of a developing service landscape? “We have a combined portfolio of solutions that offer a smart, connected customer experience, second to none, which improve the way that the dealer network, suppliers and customers come together and increase value,” explained Kartham.  Syncron products solutions allow for ultimate value to be realized through its common platform, the Connected Service Experience platform, which brings together all the data from historically siloed areas. This means that the data can be analyzed, insights can be derived and new technologies such as Artificial Intelligence can be leveraged whilst unifying the user experience.  In terms of the future, consumers have been impacted by subscription models. Recurring revenue streams, as a model, is prevalent and it is something consumers are accustomed to. It is a direction Ashok believes manufacturers are being impacted by.  Manufacturers are generating more revenue from an existing customer base, reiterating the link between customer retention or loyalty and profitability, and achieving this through efficiency and technology. “I am excited that we are enabling and empowering manufacturers through this transformation,” said Kartham.  Ashok goes on to explain, “as a technology provider, these are a nexus of technologies. Not only web and mobile but also connected products like IoT, as well as AR which provides remote assistance. There is a confluence or a nexus of technologies which enables this transformation.” Enabling the Dealer Network to optimize parts, service and warranty to drive service profitability. Ashok will be speaking about the important role that the dealer network plays in optimizing the parts, service and warranty to increase overall profitability. Manufacturers rely on the distribution network and channel partners to deliver the best possible service. This means that the dealer network needs to be empowered with the right knowledge and parts. “Warranty costs depend on what decisions are being made by the technicians and the diagnostic and repair process. We want to share how these elements are all interconnected.” Customers want to reduce warranty costs, the question is, how do we improve performance and enable technicians through empowering the dealer network? With the automotive space heavily influenced to go electric, or autonomous, how do we enable the dealer network and the OEMs to connect these pieces and deliver on, what is often, an impacted business model? Ashok stated, "A connected service technology plays an important part in the digital transformation journey, we are talking about enhancing the dealer network to optimize parts, price, service and warranty to drive service profitability.” Ashok is the epitome of a thought leader. He has the ability to see things before they happen in the general sphere. See him live as he discusses the importance of the dealer network and the role OEMs play in equipping, through technology, each component of the ecosystem. Driving the sustainability of dealers and the manufacturers that build for them, at MAPconnected 2022 .  www.mapconnected.com

Over the past two decades, retail has drastically changed with the rise in eCommerce. Compared to other sectors, the automotive industry has been slower to expand into online sales. Even slower has been the adoption of eCommerce strategies in the parts department. Traditionally, the parts department has relied on customers walking through the door and driving up to the service lane, or in some cases on local repair shops and collision centers ordering parts for their customers. In the past, consumers seeking out an OEM replacement part for their vehicle would have to physically come into the dealership, and parts were looked up in a physical or PC-based parts catalog. As an online presence became a vital component for businesses to flourish, dealerships created their own websites to better serve vehicle buyers and attract new ones, and later they even added new tools to allow customers to book service appointments online. However, the ability to browse parts and order online was rarely integrated into these sites. Even today, in 2022, the majority of dealerships do not provide an online option for consumers to browse or shop for parts, with only a quarter of new car dealerships selling parts online.  Instead, most parts departments continue to rely on old selling methods, including a parts form that online visitors can fill out to request information about a part. This form results in few conversions and is seen by consumers as inconvenient and impractical - even when they receive an actual response from the dealership.  Although only a fraction of dealers are selling online, it is becoming increasingly apparent that this is where the industry is heading, with more dealers adopting parts eCommerce strategies. COVID-19 Solidifies the Importance of Parts eCommerce If the shift in selling online wasn’t apparent before 2020, it quickly became a central strategy for many franchised new car dealerships as COVID-19 hit and the world began to shut down. In the U.S., businesses across the country closed their doors, and consumers went into lockdown. Even in states where stay-at-home orders were not adopted, and areas did not shut down, dealerships still saw a sharp decline in business.  In 2020, parts departments in the U.S.  lost $6 billion  in parts revenue, and new car sales  dropped by 15% .  Many dealerships found relief in their online parts business to combat this sharp decline in business. During the shutdown, many people use the time to repair their own vehicles or begin new projects. This led to a rise in the demand for car parts.  According to a 2020 eCommerce report from RevolutionParts, dealers selling parts online actually saw a  27% increase  in online parts sales, despite the economic challenges.  The pandemic accelerated the shift to online shopping by more and more people. As restrictions lifted and people began to return to normalcy, one habit that most people are holding onto is shopping online. In 2022, over 230 people in the U.S. made purchases online. In the automotive industry, the shift to online shopping has been drastic. Before 2020, only 32% of consumers felt open to purchasing a vehicle online, but this number has since  risen to 61% .  The impact of parts eCommerce doesn’t just impact parts being sold online, it also affects those being sold over the counter. According to Hedges & Company, regardless of whether a consumer purchases online or in-store,  74% of all parts purchases  begin with an online search. This means that people are not just shopping online for a part, but they are researching where they can get the best price, who has the part in stock, and how fast they can get it. If a dealership does not have a way for consumers to conduct this research, the probability of being passed over is high. New Opportunities for Franchised Automotive Dealers and Manufacturers The challenges dealers began facing in 2020 are far from over, as we are now dealing with the fallout of the pandemic and  worldwide supply chain issues  that have threatened the supply and production of new vehicles and auto parts. However, just as dealers were able to combat pandemic challenges in 2020, dealers who are selling parts online are now using these same strategies to mitigate the impact of the damaged supply chain. Creating an online parts business allows individual dealers to expand their customer base and reach parts buyers across the country and internationally. This means complete reliance on the local market has been eliminated, as new online revenue streams have been established, including selling parts through the dealership website, a separate parts web store, or through an online marketplace such as Amazon or eBay. Not only that, dealers can deal with obsolescence or aged inventory challenges by listing parts where they will be searchable by buyers who need them. Manufacturers have also understood the major opportunity eCommerce presents and often provide sponsored solutions to allow dealers to sell their OEM parts online through official parts eCommerce programs. Dealers and manufacturers know that they cannot compete with the aftermarket via traditional methods only. If they do not add their products to the online market, then consumers will no longer benefit from the opportunity to buy their higher quality products, and they will miss out on sales that go straight to aftermarket vendors and resellers. With the average vehicle age continuing to increase each year and the lack of availability of many new vehicle models, owners are looking to buy parts to maintain their vehicles longer and many even make upgrades to older vehicles Offering parts and accessories both online and over the counter gives dealers a multichannel strategy commonly used across industries to attract new customers and tap into this growing segment of second, third, or fourth owners of vehicles who would otherwise buy from the aftermarket.  The online parts market also grows larger every year, presenting new growth opportunities for franchised dealers and manufacturers. Most consumers today incorporate a hybrid form of online and offline shopping habits, meaning the method of selling products strictly over the counter is outdated and will prevent

When we think about disruption, we think loud, rowdy, and bumpy. But in reality, it’s the dealerships that can mitigate the noise who are making the biggest disruption of all.   Setting up sales and marketing infrastructures at dealerships often comes with manual legwork, long processes, and disjointed data sources from numerous vendors and technologies. But, it's when dealerships need to work through all that noise that it actually gets rowdy. Today’s modern dealership has shifted to reduce noise and increase transparency with the help of top-notch technology. And while there’s a handful of solutions that support noise reduction, the majority of these technologies pale in comparison to the Customer Data Platforms, or CDP for short. What is a CDP & CDXP? A Customer Data Platform provides you with a comprehensive window into customer behavior and insights by way of centralizing your data. CDPs fundamentally break data silos and bring data together in one coherent platform so you can see all your customers' information and behavior in one 360 view. When your dealership has a handle on its customer data through a CDP, it can then seamlessly layer in an experience platform which leverages the rich customer data and turns it into action. This is commonly referred to as a CDXP , customer data and experience platform.  Dealerships that invest in CDXPs can trust that their marketing infrastructure is running smoothly and focused on:  Providing a foundation for a 360-degree customer view Increasing customer loyalty  Storing precise targeting and higher-quality interactions with customers Allowing for meaningful analysis of marketing initiatives across different channels A CDXP will bring everything together for a dealership to consolidate and automate the heart of the dealership’s sales and marketing. So while other dealerships are actually making the noise trying to make sense of their data silos, the CDXP dealerships will be quieter and more confident in their approach.  Making history doesn’t always mean making noise. And just like the smoothest car engines run silent, so too should your marketing engines.  If your dealership needs more information on what CDXP means for automotive, feel free to also download the whitepaper CDXP for automotive here . 

How do you interview someone who is truly an industry heavyweight, a Massachusetts Dealer of the Year, the CEO of a Tech Company, and who has been interviewed so many times before? You prepare. And then you scrap your prep notes and questions and you allow magic to happen.  “I think the first-mover advantage is the first person to learn, right? Whoever learns first, has the advantage, and we've learned a lot.” Meet Joe Shaker , owner of the Shaker Auto Group and the CEO of TruVideo . Someone who is “trying not to be famous,” doesn’t exist on LinkedIn and openly shares his story with honest excitement, energy and a formidable presence that, honestly, left us invigorated.  Below is his story, in preparation for CXAUTO2022 . When I tell the story, I tell it from a point of: these are the real problems, this is what we've learned and this is what we did when we learned it. And then guess what? We learned something else. So when I say it's genuine, it's actually true. I wanted customers to see what they're paying for. What is being disrupted, what is changing? Communication is changing.  I think one of the key things that I like to remind people, and what I've learned myself, is that we forget about the big picture. Sometimes when we're talking about service or sales we get focussed on details that don’t matter. I tell Dealers: don’t change the way you do business, change the way you communicate.   Overall, 95% of customer experience is largely embedded in how well or how poorly you communicate. So we need to really focus on how we communicate and what it is that we are communicating. I like to joke around with the OEMs. I love it when I go to the meetings and people talk about trust and transparency or when the marketing team talks about meeting people on “their terms”: Yeah, just a quick question. How do you deliver on that? How would I execute that? Oh, you don't know. You're just saying that. Okay, great. Thanks for the punchline. So what we end up doing is going back to the theory without an execution model, but we can solve these problems! The stars have aligned for TruVideo and the reason I say that is because texting is the most used function on a phone and 10 billion videos are being watched daily on Facebook alone. Customer behavior has fallen inline for us, and with phones now taking high quality video, there has been an alignment between consumer behavior and technology. Asynchronous communication is how customers want to communicate. They love it, they click on it, they open it and, if you want to do business with a customer, it's the best way to maintain a relationship based on all the data and stats. Also, because of where we are in this journey, we can now also see how customers are interacting with the communication.  If we take it a step further, focussing on the customer experience, CX personalisation is probably the strongest underpinning right now. Video has provided this personalization which has allowed these communications to explode on the customer experience front as well as dealer revenue. Simultaneously, you get to take two bites out of the same apple. “TruVideo really took off within the sales department of forward thinking Dealers” We have a case study that analyzed 16 stores, within a large group, during December of 2020. The case study showed that when you sent the video to a customer that personalized their experience, the appointment set rate and show rate, both increased. We all know that when we are talking about leads and customers, we are looking at how many leads were generated, how many appointments were made, how many were confirmed and how many customers showed up to those appointments. The next layer, percentage wise, is how many vehicles were sold after this whole process. Any change on any level, with any of those factors, makes the number at the bottom go nuts because it’s a multiplier.  Well, with the case study group, they sent out just under 7000 videos and sold around 560 more cars during COVID than they did prior to the pandemic in December 2019. We started to realize that so many people were watching the videos over and over again and sharing them, we realized this data is actually more valuable than the website data. We can send videos, we can scrape words and phrases, we can really grab all this rich analytics and data and reach customers.  How are you able to manage your duties within Shaker Auto Group as well as deliver on your goals as CEO of TruVideo? One of my favorite quotes is: “Commit to the process, and surrender to the result.” Our Business, the car business, has been largely built around processes. When we hire, we share our process, our system, which we are willing to hire into. It is not a blank slate. We are willing to hire you to work within this ecosystem and we have spent a lot of time creating a systems and process driven environment. This means that hiring correctly and training people to thrive within our environment, really is our big picture.  We do behavioral profiling so that we get the right fit within the environment and we also have a different way of paying our people versus other Dealers. The reality is that someone like me is usually buying more stores to grow further. I have chosen to diversify what I do and how I do things through software and technology. I have a great management team that we have cultivated in order to run the process environment and this allows me to grow in different ways typical to the industry.  In an environment where everybody is focussed on training, how do you truly integrate training into your environment? Theory without execution is hallucination, and I don’t like to hallucinate. People do and say things, buzzwords, but don’t execute on them. When people say they do training, I want to know what that means. Usually, theoretically they are right but I want to understand how they execute on these things. And I think that's really the secret; we won't sign up with vendors if we don't believe we, as the dealership, can execute on it. There is a difference between those who flippantly use  training  as a component of their operations and ourselves. It’s part of our system, our process, it’s a religion with us. What can we expect at CXAUTO2022 TruVideo has really been an incredible experience for us and some of what I'll be talking about at the Event is  conversational commerce ; what it is and how we found ourselves there. We knew we were doing something different but found out that the concept existed, we were just executing it in a very unique way. When we started learning about the communication chain, we realized everyone was getting the same message. We had to fix that and, then, that’s when we really started learning. We spent the first few years really focussed on solving the customer problem. The word  engagement  slips in all the time but when we really think about it, has the message been delivered and not just the text lines? Maybe we know the open rate of an email, but do we really know anything else? “I want to talk to the Doctor, not to the Receptionist” In 2021 we released the ROVI Report; We wanted to share data from our first 7 million videos. One OEM partner that shared data with us showed us  a 1.1 million repair order sample. The ROs that had video were $55 more, and, simultaneously increased CX scores. Customer “Intent to Return”, went up 4 points on the Net Promoter Score and “Value for Service” went up 3 points on NPS. Some of our OEM partners have exploded on the JD Power Service Index; so we are truly seeing the impact on the customer.  Following the data has shown us that we can not only eradicate doubt, but fix the communication chain. We realised we had data when we saw 35% of videos being shared in service. The inspection from the technician was no longer diluted by going through various people. The same transparent message was now going to the advisor, customer and any friend or confidant.  What matters about data and analytics is: how do we make it actionable? How many times are people watching, sharing, what is the real time data? We can show that through our dashboard, allowing managers to know what they need and allowing the Dealer to control the communication.  Our high-energy conversation ended with us sharing our personal views on how the world needs  more . More communication, more technicians, more perspective, more creativity and more acceptance of differing skills. Especially when it comes to breaking negative cycles through inclusive thinking.  See Joe live at the CXAUTO2022 in Marina Del-Rey next month! We would highly recommend it!

It’s not easy to run an Airline Profitably Many of us have had the experience while booking a flight, of watching the price for a seat change as the plane fills up as the time for the flight approaches. What we have experienced as consumers is an example of "Revenue Management," or "Yield Management" by the airlines. A simple definition of the practice is as follows: Yield Management  is a variable pricing strategy, based on understanding, anticipating, and influencing consumer behavior with the goal of maximizing revenue and profit from a fixed, time-limited resource. According to Robert Crandall, the former CEO of American Airlines, Yield Management is, "the single most important technical development in transportation management since we entered deregulation." Yield Management is one of the tools that airlines have used to achieve more consistent profitability, where sales of a few extra seats can make an enormous difference. According to  Forbes , US airlines need their planes to be well over 70% full just to break even. To make these systems work, the airlines need extensive  data  about their customers and their intentions. Over time, the airlines have built ever more powerful sources of data from frequent flyer programs, reservation systems and web search data. The airlines have also developed increasingly sophisticated  models  to predict how individual consumers will respond to changes in pricing and other factors. And finally, airlines have invested in  systems  to actively manage their revenue through ongoing dialogue with their customers. Application to Dealer Service Operations A dealer's service operations have some similar revenue management challenges. They represent large, fixed investments in facilities, equipment, and skilled people. They are profitable when they are full and quickly become unprofitable when they are not. And, like the airlines going through deregulation, dealer service operations are facing some big disruptions. The transition to electric powertrains is driving significant investment in new equipment and training. Electric vehicles are also expected to need maintenance less frequently and at different intervals. In fact,  Consumer Reports  finds that EV owners today are spending half as much on maintenance and repairs. Dealers will also see increasing use of Over-the-Air diagnostics and repair, as Tesla has demonstrated so successfully. Finally, dealer service operations will see disruptions from the ongoing consolidation of automotive retailers, with growing pressure from the large public operators. The time might be right for leading operators to take a page from the airlines' playbook. Connected Cars Provide Much More Data With a built-in connection to every car sold by the dealership, dealers increasingly have access to a rich source of  data . It is possible to know when each vehicle needs service and what kind of service it needs. It is also increasingly possible to use data from the vehicle to predict when a breakdown will occur well before it happens. Predictive Diagnostic tools have been announced from both OEMs like  General Motors  and from startups like  Preteckt  or  Pitstop . The development of this data and these tools creates the potential for service events to be planned more proactively, rather than purely in reaction to customer calls and drop-ins.  Better Data Can Produce Better Pricing Models With better data about vehicles’ service needs, it is possible to start building  models  to predict what it will take to bring individual customers in for service at a time that is most profitable for the dealership. Which kinds of customers can be persuaded to come in sooner or wait until a less busy time? How much of a price incentive (or other kind of incentive) will it take? Pricing models are built by trying out offers with different types of customers with different service needs. Over time, models become increasingly accurate and pricing becomes increasingly targeted. Better Systems Can Produce Greater Profitability Many dealers already have scheduling  systems  in place, but the next step will be to use these systems to more proactively plan service visits in a way that maximizes utilization of service operations. Dealers will use customer data and dynamic pricing to anticipate when a customer will need service. Next-generation scheduling systems will be able to present precisely targeted offers, designed to bring vehicles in at the optimal time for profitable service delivery. It is a dynamic, exciting time in the auto business right now, with disruptive technology and business trends well underway.  motormindz ’ Connected Practice has the experience and insights to guide you through these challenges and find effective and profitable paths forward.    

76% of CEOs, in every industry, agree their business models will be unrecognizable in 5 years. Think your dealership is immune? Technology touches every part of our lives. From the Alexa alarm that wakes you up to the UberEats app that brings you lunch, technology has radically shifted the way we live our lives and conduct our businesses. Forrester Research surveyed the world’s top CEOs and found that more than three-quarters of CEOs across every industry expect their business model to change in the next five years. After a year of explosive growth for automotive e-commerce companies like Carvana and Vroom, it’s time for dealerships to make their move.  Age of the Giants Depending on where you or your dealership clients are located, it’s possible that you’ve already felt the presence of tech-first dealerships like CarMax, Carvana, and Vroom. These companies have entered the market nearly a decade ago and have seen their growth explode thanks to shifting consumer attitudes about online car buying, especially over the last year.  Digital dealerships have seen large success because they make it easy and transparent for shoppers to get the information they need to make a confident purchase decision online. Fortunately, it doesn’t take millions in raised capital or shareholder money to create the type of online shopping experience that converts. Instead, it takes a digital transformation. The Tech Takeover Technology has been traditionally considered its own industry, but Forrester analyst, Jay McBain, predicts that soon the “tech industry” will disappear as it becomes ingrained in overall business strategy. McBain had this to say on a recent episode of The Ultimate Guide to Partnering podcast,  “…you used to compete against the person across the street and in your industry, and do things 10% better. Well, there’s a set of startups somewhere in the world right now that are thinking about ending your industry. So, every company has had to become a technology company. And every day, you’re reading about car companies having to look more like Tesla, you’re reading about almost every industry, you’ve got these big changes underway. So this technology is no longer a part of a company. In many cases, it’s becoming the entire business model…” Some of the most notable companies are already leading the charge in this change. Tesla is a technology company at its core and just happens to produce automobiles. Uber is not a taxi service, but rather a tech company that allows consumers to leverage technology to solve transportation problems. As consumers insist on more personalized and on-demand service, dealerships will profit from reinvigorating their business models with the new IT strategy. Your New Most Valuable Real Estate A lot of dealership owners think that their physical car lot is their most valuable piece of real estate. Dealers put a lot of attention into their dealership’s physical location and designing their showroom experience with special thought and planning, but neglect their mobile digital customer experience.  But consider this: how many customers visit your dealership showroom every day? Now consider how many people visit your website on a mobile device every day. The first experience a consumer has with your dealership before they walk into your showroom is your website. Consumers are doing so much more research on their own, likely on a mobile device, going through the selection process and eliminating dealerships to visit. As a result, they are visiting fewer dealerships. Does your website give consumers the experience you would expect as a car shopper?  Digital transformation is not just a new digital retailing tool or a video and 360° walkaround tool. Instead, it’s an overall adoption of digital technology by a dealership to enhance the car shopping experience while improving business processes and profitability. Leading the Digital Transformation Has your dealership business model changed in the last 5 years? What changes are you planning to make in the next 5 years? Dealers can only be successful if vendors invest in partnerships, integrations, and guide dealers through mobile digital transformation. Software companies, software integrators, service providers, marketing agencies, trainers, and consultants have a massive opportunity to help dealers meet customers online by partnering and connecting the right tech solutions together.