Service & PartsCommentary & Insights

Service & Parts
red car protected
Bubble Wrap: Follow the Logic Filled Road

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We have all ordered a product that was shipped to us most likely in a cardboard box. Inside that box, the product we ordered, was probably covered in bubble wrap. You’re familiar with it, right? The transparent, pliable plastic material with the regularly spaced, protruding air-filled hemispheres whose sole purpose is to protect the fragile contents of the box. Bubble wrap provides exactly the right level of cushioning protection needed to make sure your products arrive safely after being shipped. Most of us own a smartphone these days. It’s probably fair to assume, many of us purchased a protective case when we bought the phone. We can’t keep our phone in the box it came in wrapped in bubble wrap if we want to use it. So, we bought the case, which is the functional mobile version of bubble wrap for our phones. Did we buy the case because we thought the product was bad or would break? No! That’s why we shelled out the $1100 for the latest greatest gadget.  The phone was expensive and we know that at some point, we are bound to have a clumsy moment, where we drop the phone, or worse yet, it falls out of a backpack or pocket. The thought of the phone striking down on the ground and cracking the screen is horrifying. This is especially true if you don’t have AppleCare. Therefore, we spend a small amount of money to protect our investment and keep it safe. The bubble wrap and phone case are to the phone, what a service contract is to a vehicle today.  Costly repairs have skyrocketed due to onboard computers, high-tech electrical equipment, sensors, switches, diodes, radar, cameras, and touch screens – all of the non-maintainable components. Vehicle service contracts not only protect the vehicle, but they protect the consumer by creating AND forcing a budgeted monthly plan. It is because of this agreement to pay for the covered repairs that a consumer can have a fully managed payment option, thus increasing the probability of a pleasant ownership experience. The Necessity for a Vehicle Service Contract The more ways you can explain how consumers protect themselves and their investments, the more buy-in you will have because they will identify with these logical behaviors. You are simply leading them down the logic-filled road. The more things you can get them to agree with you on, in terms of protection, the more likely you will demonstrate the necessity for a vehicle service contract.  You wouldn’t ship valuable fragile items without packing peanuts or bubble wrap, would you? Is anyone walking around without a case on a cell phone? These are just two small, everyday examples most of us overlook as an avenue down the logic-filled road to commonality and “agreement in principle”. When we arrive at “common Grandville”, we connect, and the transference of enthusiasm and excitement happens. The next part is simply using logical mathematics to illustrate how much better the protected payment is, especially because of the increasing costs of breakdowns due to the replacement factor instead of just repair. There are many different ways you can try to convince a consumer that they need a vehicle service contract. There are so many closes, and honestly, they all have their own validity and effectiveness in their own way. The problem is getting comfortable with how you explain it. If you don’t understand the comparison, you are making or can’t effectively communicate it in a way where you break it down to something so basic and common, the consumer will feel like you are trying to mislead them or they will altogether not follow along and will likely decline because they are afraid of making a bad decision, not because they don’t see value in it.   By scanning the above QR code with your smartphone, or following this link you can watch THE BUBBLE WRAP CLOSE! Practice it and customize it to your liking. I think it is just one more tool in your belt when pushing to improve your effectiveness in the business office. Go forth and profit! #bing #morewinning
Car parts
Connected Car Opportunities in Parts and Service

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There has been a lot of attention paid to opportunities for Connected Car technologies in Sales and F&I, with ideas like personalized shopping, deliveries, and data-based F&I products. But there are also several opportunities for dealers to use Connected Car technologies to improve quality of service, performance, and efficiency in the delivery of both Parts and Service. Quick Background: This topic is relevant now because Connected Car technologies are finally reaching “critical mass.” Well over 90% of all new cars and trucks sold in the US in 2021 will come with built-in abilities to transmit and receive data, remote software, and vehicle commands. This means that key data about each vehicle’s mechanical condition, driving usage, and precise location can be collected and used to improve operations at the dealership. As always, it is critical to remember that customers must be fully informed and provide their consent for any Connected Car services to be utilized. How Connected Car Data and Commands Can Affect Parts and Service: Current Operations In the near term, there are several opportunities to improve the day-to-day operations of the Service and Parts departments, while also improving the customer experience.   The highest ROI current opportunity is to use data from the vehicle to determine when maintenance and service events need to be scheduled. The vehicle “knows” what its mileage is, when it needs an oil change, and when it has diagnostic codes that indicate different needs for service. Customer outreach using this vehicle data is much more timely and often more effective than outreach based on customer behavior modeling or “estimated” mileages.    A connected car can also facilitate advanced planning. By checking periodically on maintenance needs, dealers can anticipate approximately when a customer will need maintenance. The dealer can then plan ahead to schedule service at a time that is both convenient to the customer and efficient for the dealer, smoothing out service operations as well as monthly top and bottom lines.    Finally, an advanced review of a vehicle’s maintenance and service needs can facilitate advanced ordering and stocking of parts to ensure that they are available when the vehicle is scheduled for service. In short, dealers can more efficiently utilize their personnel and operations, while providing more reliable and convenient services for customers. Several OEMs now include automated maintenance reminders within their Mobile Owner Apps, and similar service reminder programs are offered as well. These types of programs have been shown to increase both customer service satisfaction and retention. The dealer plays a critical role in ensuring that all new vehicle purchasers have their Mobile Owner Apps activated during delivery, along with enrollment in automated maintenance reminders. If your OEM has not yet enabled these services, or for older vehicles, dealers should also look into third-party platforms, which not only offer service reminders, but also theft recovery, emergency assistance, and other services. Advanced Service and Parts Opportunities Connected Car technologies will allow more advanced capabilities, too. We have already seen extensive use of Over-the-Air software updates by Tesla, but Tesla is not alone in adding OTA capabilities. Every major OEM is working to expand their abilities to update major vehicle systems this way, as well as how to share these responsibilities with their dealers. Tesla and others have also shown the potential for additional revenue from software-based “accessories” and feature subscriptions. These are optional software enhancements that allow the vehicle to be customized versus a base factory configuration. OEM Service and Parts departments will soon be able to recommend and deliver these accessories to an increasing number of vehicle owners. OEMs are also increasingly developing more predictive service algorithms. These programs process data from large numbers of vehicles to develop models that can accurately predict service problems before they occur. As confidence in these programs increases, dealers will be encouraged to contact customers to schedule service well before a breakdown occurs. Finally, Connected Car technologies will enable many new remote services. It is easy to locate vehicles and to provide digital keys to give access to an authorized technician. This will facilitate both services at the customer’s location as well as easy pick-ups and exchanges with courtesy transportation vehicles.
analytics data
Using Data to Connect on-Line and in-Person Car Shopping

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Connected Car Opportunities in Parts and Service There has been a lot of attention paid to opportunities for Connected Car technologies in Sales and F&I, with ideas like personalized shopping, deliveries, and data-based F&I products. But there are also several opportunities for dealers to use Connected Car technologies to improve quality of service, performance, and efficiency in the delivery of both Parts and Service. Quick Background... This topic is relevant now because Connected Car technologies are finally reaching “critical mass.” Well over 90% of all new cars and trucks sold in the US in 2021 will come with built-in abilities to transmit and receive data, remote software, and vehicle commands. This means that key data about each vehicle’s mechanical condition, driving usage, and precise location can be collected and used to improve operations at the dealership. As always, it is critical to remember that customers must be fully informed and provide their consent for any Connected Car services to be utilized. How Connected Car Data and Commands Can Affect Parts and Service: 1. Current Operations In the near term, there are several opportunities to improve day-to-day operations of the Service and Parts departments, while also improving the customer experience.   The highest ROI current opportunity is to use data from the vehicle to determine when maintenance and service events need to be scheduled. The vehicle “knows” what its mileage is, when it needs an oil change, and when it has diagnostic codes that indicate different needs for service. Customer outreach using this vehicle data is much more timely and often more effective than outreach based on customer behavior modeling or “estimated” mileages.   A connected car can also facilitate advanced planning. By checking periodically on maintenance needs, dealers can anticipate approximately when a customer will need maintenance. The dealer can then plan ahead to schedule service at a time that is both convenient to the customer and efficient for the dealer, smoothing out service operations as well as monthly top and bottom lines.    Finally, an advanced review of a vehicle’s maintenance and service needs can facilitate advanced ordering and stocking of parts to ensure that they are available when the vehicle is scheduled for service. In short, dealers can more efficiently utilize their personnel and operations, while providing more reliable and convenient services for customers. Several OEMs now include automated maintenance reminders within their Mobile Owner Apps, and similar service reminder programs are offered as well. These types of programs have been shown to increase both customer service satisfaction and retention. The dealer plays a critical role in ensuring that all new vehicle purchasers have their Mobile Owner Apps activated during delivery, along with enrollment in automated maintenance reminders. If your OEM has not yet enabled these services, or for older vehicles, dealers should also look into third-party platforms, which not only offer service reminders, but also theft recovery, emergency assistance, and other services. 2. Advanced Service and Parts Opportunities Connected Car technologies will allow more advanced capabilities, too. We have already seen extensive use of Over-the-Air software updates by Tesla, but Tesla is not alone in adding OTA capabilities. Every major OEM is working to expand their abilities to update major vehicle systems this way, as well as how to share these responsibilities with their dealers. Tesla and others have also shown the potential for additional revenue from software-based “accessories” and feature subscriptions. These are optional software enhancements that allow the vehicle to be customized versus a base factory configuration. OEM Service and Parts departments will soon be able to recommend and deliver these accessories to an increasing number of vehicle owners. OEMs are also increasingly developing more predictive service algorithms. These programs process data from large numbers of vehicles to develop models that can accurately predict service problems before they occur. As confidence in these programs increases, dealers will be encouraged to contact customers to schedule service well before a breakdown occurs. Finally, Connected Car technologies will enable many new remote services. It is easy to locate vehicles and to provide digital keys to give access to an authorized technician. This will facilitate both services at the customer’s location as well as easy pick-ups and exchanges with courtesy transportation vehicles. The Connected Car will bring dramatic changes and opportunities to all parts of the modern dealership!
ev charging
The Coming Wave of the Electric Vehicles and the Impact on Auto Retail

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The State of EV “Oh we gonna rock down to ELECTRIC AVENUE!” We have all read and heard the recent headlines around the auto industry. Electric, electric, electric. It is coming fast and furious! Depending on the source, the forecast for future electric vehicle sales vary, but recently with all the activity the sources and forecasts are starting to align on the growth potential and likelihood as being significant and expansive. It will no longer be a splinter niche customer set, but rather a significant profile and proportion of sales and even trending towards the majority. According to a few sources, the likely truth will probably be somewhere in the following projections and forecasts: Sopheon notes that the additional product offerings coming could push global EV sales to between six million and 11 million by 2025, rising to between 11 million and 19 million units a year by 2030 The real interesting pieces come from IHS Markit's forecast for 2021 and beyond. This year, the firm believes we'll see electric cars take a market share of 3.5%, just about double from 2020's number. Fast forward to 2025 and the company forecasts EVs will make up 10% of all new cars sold. That would be a massive shift in buying trends . According to Edmunds, by the end of 2021 there will be 26 electric vehicles available for sale across the sedan, truck and SUV segments. That is expected to grow significantly over the next 5 years with as many as half the models for sale in 2025 having EV options. So EV is here and coming in an even more substantive way. What does it all mean? How will car buying, owning and servicing change? What does this shift do to retailers? In fact, what will the very retail footprint and experience need to look like to accommodate this market disruption? A few quick questions I have heard? Do I need to treat an EV customer different from my “normal” customers? Will I need a separate showroom or sales process? How will this affect my service business? What other considerations will I need to train my staff for in selling EV’s? The answer to each one of these is that there will be differences and nuances that need to be accounted for with EV customers and products. But the amount of change needed depends on your current dealership’s focus. If you are a retailer focused on customer experience and lifetime value as two key driving forces and metrics of success, then the change may not seem as drastic. If your store is more transactional based and price and profit are the only main drivers of operations, the EV customers and opportunities may be tougher to capitalize on. So What Really Changes for Retail? We Just Sell Cars, Right? Wrong. The bottom line is that the very retail model will have to adapt and shift. Retail will not be about moving product, or transactional based, but it must become first and foremost centered on experiences. Electric vehicles require a different value proposition as part of the sales process. The service experience will also be very unique for these products and owners. The focus needs to be on truly meeting the customer’s needs, value, and overall experience. Retail itself must become synonymous not just with the purchase, and not just the physical in-store engagement, but rather the entire customer engagement process along their entire journey. There was already major transformation coming in the industry due to technology and customer expectations, but the significant uptick in electric vehicle availability, sales and ownership will continue to disrupt retailers to become more of a mobility platform and mobility experience center. Rather than try and detail all the changes that will have to come and the capabilities that retailers will have to develop, consider the following graphic. This is just a high-level framework of some thoughts on how a future auto retailer will have to focus, operate and thrive. We can certainly debate the major function headings, or the specific services and functions themselves, but the fact remains that even if 80% accurate, this is quite a shift from the current operations and focus of today’s retailer. Why will this shift happen? Notice I said “will” not “if” or “might”. There are too many disruptive forces coming to play into the auto industry and the auto retail environment. Major Challenges and Disruptions Growing customer expectations (On Demand Economy / Instant Access) Mobility needs shifting Disruptive technologies (Connected, 5G, Autonomous, Electric, Digital) Electric vehicle growth (global view and movement) Autonomous vehicle technology On Demand services (including vehicle features themselves) Covid after-effects / Urban exiting / Virtual working (commute) Increasing mobility choices (mode, access) All of these factors and many more will demand a new retail model. One that engages customers to meet their mobility needs in any and every way possible. That will need to include micro-leasing, access on demand, fleet / rental options, subscription services, mobile services, downloadable software, pay-by-the-mile, features-on-demand, and much more. Imagine a customer virtually test driving a vehicle, and specific features and accessories via virtual reality from the comfort of their own home. Then having the electric vehicle for the weekend, dropped off at their house. They return the vehicle to the dealer, cash in their energy tokens, and then purchase a mobility monthly subscription pass for the dealer’s mobility platform options. Sound far-fetched? It is happening in pieces through various companies and channels now. It will be up to auto retailers to become the one platform to provide (or at least manage) these services in order to keep customers engaged and to be sustainable and meaningful into the future. Shift Happens So how do retailers get ahead of this rather than trying to chase the opportunity when it is too late? This must happen with adaptive strategy and operations. A few key action plans include: Assess what drives your operation and how can it become more customer experience focused (what you measure is what will matter) Continually develop customer data and insight to always be prepared to meet the customer where they are in their mobility needs Begin to view and structure your operations not as departments, not as inventory and assets, but as seamless and frictionless enablers to capabilities. Define your North Star. What will make your dealership different? What will truly separate your customer experience from the dealership down the street? Enable employees to do what is right, not what is standard and expected. Leverage technology to enable frictionless experiences, not become more cumbersome. Always be customer-focused, agile and adaptive to their shifting needs These capabilities will insure deeper customer connection and engagement. What you sell in the future may change, but it will not matter if the basic customer experience is not there now, tomorrow and along the way; because your customer will go to where they can receive the best experience. Customer experience is the bridge from the present to the future, from the known to the unknown. Our future monthly operating report and operational structure will look much different than today, but the core customer experience fundamentals must exist continuously to survive and thrive in that new world.
The Importance of Diversifying Your Revenue Streams at Your Dealership

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Recently, major shifts in the automotive industry have all been traced back to the COVID pandemic. While we could talk all day about the numbers and what it means for dealerships now, what we should be talking about is what dealers can learn from this entire dilemma.  While we’ve experienced multiple recessions, we have never experienced a pandemic in the automotive industry. For dealers coming out of 2020, it’s time to seriously consider diversifying your revenue streams and investing in digital tools across the board. What We’ve Learned from the Drop-in Car Sales It’s no surprise that in a recession, car sales falter. We’ve seen this plenty of times before, and we’ll most likely see it again. What was different this time around wasn’t just the fact that customers were wary about making large purchases like a new vehicle; those who wanted to buy were scared to go into the dealership in fear of the virus. Investing in digital tools  to sell your cars online quickly became the solution. So, now that shoppers know online car buying is a possibility, new behaviors and habits have been created. Car buyers are going to expect this new experience to be the norm from here on out. If your dealership doesn’t adapt to this new buyer behavior, you’ll lose out on car sales. A customer will more than likely go to the dealership that  does  offer them the opportunity to shop and purchase all online. However, this doesn’t mean it’s time to put all your eggs in one basket. Even when the pandemic has passed, consumers will still be concerned about buying cars. Unemployment is still high and job security will continue to be a huge issue for many people. While investing in online car selling is one option of investment, there are places in fixed ops you should be shifting towards as well. Why the Service Department Saw a Decline Historically speaking, the service department has always been recession-proof. Customers prefer to put extra care into the cars they have during a recession rather than buy a new one. But in March alone,  service requests fell a whopping 56% across the US . So, what happened? Social distancing happened. While dealerships and their service drives were labeled an “essential service”, car owners were still scared of the pandemic spreading. They not only stopped coming in for regular maintenance, but they were driving much less.  Many businesses have either made working-from-home mandatory well into 2021, or they’ve decided to go remote permanently. Half the nation is keeping schools, gyms, and bars shut down, and people still aren’t traveling as much as they used to. This has been leading to less mileage on cars and therefore, less maintenance required. Luckily, service requests have gone back up since. But, the fear is still there that this could happen again with a second wave.  While you shouldn’t give up on service, there is another department in fixed ops that has been coming out on top that you should consider investing in. How Many Dealers Found Solace in the Parts Department It’s not shocking that we saw part and accessory sales skyrocket since the rollout of stimulus checks in April. Online part and accessory sales have been a huge revenue stream that continues to grow, and 2020 has been the year where it all blew up (in a good way). With social distancing, shoppers weren’t going to come to your parts counter to order the parts and accessories they needed. For almost everything, consumers have turned to eCommerce to get the products they need, and parts were not left out of the equation. For dealerships using the RevolutionParts platform,  we saw online part sales increase an average of 50%  between June and July 2020 compared to the year before.  DIYers had a lot more time on their hands to work on their project cars, mechanics who work a side business or might have been laid off found a way to provide for themselves, and even your average Joe and Jane found that they could do a few minor maintenance repairs at home. It turns out your garage is a great place for social distancing! Dealers who had already begun diversifying their revenue streams and invested in online parts and accessories saw the reward and the proof they were looking for. Parts and accessories aren’t a revenue stream to be ignored. Where You Need to Diversify & Invest The best option for any dealership right now is to invest efficiently during this downtime. Reevaluate your business model and figure out where you can be diversifying your income and innovate new ways to generate revenue. No matter what department you look at, there has been an increase in online demand — and an increase in demand to do business in different ways. Your customers are online, and digital tools and business models are the keys to building a parts business and dealership of tomorrow. Invest in the proper tools now, and you will start generating more profitable revenue for your business. Sources: 1. https://www.autonews.com/retail/pandemic-accelerates-adoption-digital-tools 2. https://www.autonews.com/service/parts-and-service-pandemic 3. https://www.revolutionparts.com/auto-trends-due-to-covid/
Are You Fishing in a Crowd?

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Growing up in Wyoming, I learned many lessons about the value of being in a secluded place and not being surrounded by a crowd. One memory that standouts in my mind, was when I was in Yellowstone National Park. There is a really terrific tourist bridge on the north end of Yellowstone Lake that funnels countless cutthroat trout into the Yellowstone River. From the bridge, the river winds hundreds of miles before dumping into the Missouri River. Fishing Bridge as it is called, was made from old timber in 1937 and still remains standing open to passenger and vehicle traffic today.  If you have ever been to the bridge; you know how busy it can get. While you can no longer fish from the bridge due to the decline of the fish population, at one time you could place your pole in the water and without a doubt catch a fish. I remember being told that during the fall months finding a fish from the bridge could be much more difficult because the fish went to deeper waters of the lake. However, because Fishing Bridge had a reputation for being the best fishing hole in the West, anglers continued to fish from the bridge even though they knew that it was the wrong time of year. Most fishermen during the fall months left the bridge with looks of disappointment and little fish to show for their days' work.  In a lot of ways, that old fishing bridge reminds me of auction houses in today’s competitive car market. In general, when there are a lot of fisherman, usually the good fish are gone fast and at a premium price. However, few dealerships buyers will change what they have always done to get the bigger fish. Outside of the auction house, the used car market has many options for the dealership to acquire more units. Most dealers continue to believe that the only place to fish is the auction. Some dealers unfortunately look at other sourcing places for used cars as inefficient, taking too much time or money to make it worth their effort. When looking for places to source cars dealers need to be able to think outside the box.  Here are a few locations where dealers can source inventory outside of trades and the in-person auction houses. Online Auctions -  DealersLink , OVE, SmartAuction, ACV, BackloCars OEM Lease Returns Websites Craigslist, Facebook Marketplace, Local Classifieds Private Party - Drive by Units Dealership Database Mining - Email and Phone Campaigns Dealership Service Lane Automotive Classified Websites - Private Party Listings -  Cars.com ,  AutoTrader ,  CarGurus.com AutoTrader/ Kelly Blue Book Instant Trade-In-Offer eBay Listings Would you go fishing with everyone on one bridge or would you rather row out in a boat and get the best fish? Sourcing used cars is very similar. Don’t get me wrong, auction houses all have their place in today’s used car market. They do serve a valuable function to dealers as a way for them to buy and source vehicles. However, living off trades and auction purchase is not the only way to find great vehicles to stock for your lot. Start thinking outside the box and you will be surprised what you come across.