Interviewed by David Zatz, February 2015, at the Chicago Auto Show
I understand that you’re rolling out new dealership software.
I would say it’s not completely new because we started about a year ago with wiAdvisor, a tablet-based reception tool. Essentially, it moves a reception of a vehicle in the service lane from minutes to seconds.
First, it establishes a connection with the car, it’s able to retrieve all the information from the car. The normal info that you would either ask the customers, the VIN number, mileage, or you have to look into the car. So it allows the service advisor to spend more time with the customer talking about the needs of the customer.
On top of that, as soon as you get the information, you can link immediately, real-time, with all the history of the car: the services, if there are open recalls, including opportunities such as “Oh, by the way, we have a particular offer for the week for winter tires that fit your car,” or “Oh, by the way, I see that your battery is low so let me go and check the battery although you didn’t come for that.”
Everything can be done while you are around the car, so you don’t need to go to the desk, etc. You can do the walkaround to the car to check if there is something different. You can transform the experience to totally paperless, so the customer can sign your tablet, receiving the bill or receiving the quotation or whatever is involved around his or her email. So it’s really ... shortening the time, and allowing more interaction with the customer.
There are two effects. First of all is faster, more effective reception of the car and interaction with the customer. Secondly, more opportunity for the dealers to do other things — offering a maintenance contract, accessories, and so on. It’s a more rounded experience.
I think that is the most recent tool that we gave. We have more than about half of our dealers that have enrolled for the system, and about 700 that already are actively using the system. I expect almost everyone will come.
Do you have to plug something into . . .
There is what we call a port. There’s a little port that you plug into the car when the car is coming to the service man. [OBD port]
Okay. So it’s like a lot of the aftermarket systems, except that it’s . . .
The aftermarket systems that there are, there are two main differences. First of all, they can read only part of the information because they don’t have our backbone of data, right? And secondly, they don’t offer the 360° experience of connecting with the DMS [dealership management system], working with our service counters, working with our [?] program. So all of our systems are naturally connected. This is the reason why more than half of the dealers are on-board, because the tablet systems that are in the market are a very narrow version of our system. And I’m not saying that because I’m trying to sell it to you, it’s because of what we have seen with the dealers.
This is why we didn’t say, “You have to take it.” I rather prefer the dealers coming onboard because they like the system. I would say the only commitment of the dealer is to work with integration with the DMS, because you need to have a connection. We connect with the major DMS systems.
... What is keeping me awake at night, aside from making every customer happy — every customer that we have today happy — how do I make happy the customer that we will have in ten years? Five or ten years. How do I develop processes, systems, and tools that are going to make happy my son, my daughter, that are toddlers? Because they will be different, totally different customers from you and me. They will approach the service experience in a completely different way.
Let me ask you about Express Lane [the 20-minute oil change system], then.
Express Lane is doing very well. We are at 854 dealers, more than one-third of our dealer network. Every dealer with an Express Lane, in the first year, the business is at least 20% more than before, so there is a clear correlation between having an express service and growing the business and getting more customers. So we’d say everything is going exactly where we were planning to go. We started the program in 2009 and we went to one-third of our network in five years. The next phase is keeping on expanding, but also we’ve started developing a format for some standalone express service.
We’re working on a few projects where the dealer will open a facility that is dedicated to Express Lane service. That will give two advantages to the dealer. First of all, additional coverage within their territory, maybe five or ten miles away. Secondly, it will allow an expansion of the service capacity of the dealer, with limited investment because it’s not as expensive as opening up a full service.
Every time someone has to wait around for an hour for their car’s oil to get changed, it means they’ll be out there . . .
For some dealers, it’s one of the potential problems. So you have two choices.
You have many ways of expanding capacity. You can expand your hours of work and hours of operation; you can become more efficient; you can do 24/7. I come from the truck business, where 24/7 is the norm, because during the day they need to travel, deliver material, deliver goods, etc. So when they need service, they need servicing during the night, not during the day. So I come from that background. This is why for me 24/7 Saturday/Sunday is the norm.
Speaking of which, is customer satisfaction with dealership repairs increasing or staying about the same?
It is [increasing]. It is. When we look, we have a number of different indicators. We see an increase. Are we happy? No.
I don’t need to tell you, it has been obviously also affected by all the recalls. So there is a lot more traffic going to the dealership. Traffic sometimes means also potential confusion, right? I mean a long line of people in front of the dealership in the morning. You need more efficiency and effectiveness. But it’s going in the right direction, so we’ll keep on working with the dealers.
I think the dealers are understanding every day more that it is important. That’s true for every manufacturer, I would say, and ours too. They have committed – I don’t know if you had the chance to talk recently with Pete Grady, but they committed to many investments. I mean you can talk to Fields, one of our big dealers here in Illinois, the guy who is showcasing many Jeeps he made for some charity. He made a full renovation, I don’t remember how many million dollars he invested in the renovation.
He was already a very good dealer from a customer perspective, but he made us the [forefront?] in every building and facility. Many of our dealers are the same. Dave Kelleher, the chairman of the National Dealer Council, just sent me a video of the new facility that will be opened. So there are a lot of commitments.
So, a lot of initiatives going. Are we done? No. Nobody can say they are done in the automobile industry.
It’s interesting, the more we grow, even the more we increase satisfaction, a good customer experience for us will not be a good customer experience for the next generation. Like I said, they will look for something different. You see it already in many different things, right? The new generation changing the priorities. They will. Spending time in a dealership is not going to be priority number one. The priority list in ten years for a kid, it will be very low.
I don’t know how high it is for me, either.
But I think you grew up with the idea that that was part of owning a car, right? Sometimes you need to go into a dealership for maintenance, for a repair, or a touch-up or something like that. It was part, right? Part of your DNA. Sometimes I have to go to a dealer. If I talk to my father, right, that spent 35 years at Fiat and now he is almost 80 but still I think when he bought the last car a couple years ago, it was “Okay, I go – I need to go there. I need to go to sign, to do all the routine.” So you take the morning to go to the dealership to buy the car.
Today, the deal would be I may understand that I need to go to the dealership to order, to take the dealer of the car, but 80% of the experience I can do online, right? So they will look at the quality of your configurator; they will look at the quality of . . . I mean the pricing. It may be the transaction will still happen at the dealership, but many things are changing. Without going into self-driven cars, etc., but even really basic things.
Every service or parts transaction . . . 70% of the service transactions start online. 70. Seven zero. Whether it is – whether I need service or I need parts, the first action is to look up what is the nearest service location? Hours of operation? Can I book online? Can I check the price of that part online? Can I buy the part online? Can I write . . . I mean 70%. 70. Today. Tomorrow, 100. And then of those 100, the level of demand of requirements online will become higher. And everything will try to reduce my time at the dealership.
Have you found that dealers are fixing it right the first time more often than they were when you first came in?
Yes, significantly. That is one of the major drivers of what we see as an increased satisfaction. We spent, really, a lot of time to improve that item. At the beginning we even said okay, let’s not look at the customer satisfaction holistically; let’s look at fixing the car the first time. Two levels: training and requirements, to the point where some of the dealers told us that we were even too reaching. Because when you say, “For that repair we need to have that level of training,” etc., you put the number of requirements there and sometime [pushback?] from the dealers, right?
It’s not a secret that one of the challenges of the industry is to keep on finding new technicians and training technicians. We did a number of things to help the dealers, recruiting and retaining technicians. But we went really on the availability of tools, two years ago. It made the dealers initially not very happy, but it paid a lot of dividends and eventually they decided it was a good thing.
We went dealer-by-dealer to check the presence of all the required tools, one-by-one. It was a long and painful experience, one-by-one, 2,400 or 2,500 dealers, one-by-one, checking a list. Then we said “Okay, you missed these five tools. You need to buy again, because we knew that you had them. You lost them or broke them.”
So we went to every one of the dealers to check if they had the tools, and that was the foundation, and then we started with the training. Now we try to make the requirements — we build the requirements together with the dealers, so just to grow in understanding, we need to give them the space, we made the requirements easier for new technicians. For instance, if you come from a technical school we recognize some basic skills without going through training, etc. So we make it easier for the dealers to hire a new technician because it’s pre-certified.
Something else we did is to expand – we have a program that is called CAP, and that is College Automotive Program. That is a partnership between FCA and technical schools where we participate in the definition of the curriculum of the schools, so when a student qualifies or graduates, we can hire [them] immediately with skills to be ready to be productive in a dealership.
I like the because I told you three things: hire, so for instance the CAP program is related to hiring technicians. We have another program with Career Builder that is a program of recruitement of technicians, so we offer the service to all our dealers. Then we train, so all the training of our training requirements we will be sure that they have. And then we retain, among other things, with the recognition of the best technicians. That is a sign of our commitment to the technicians that is sometimes a job, you know, that is at the end of the chain.
Have you been getting fewer requests for help at the corporate level? Calls on the hotline and mail in.
Well, it is . . . well first of all it would be impossible because with 58 consecutive months of growth our vehicles and operations are growing significantly. So by definition, even maintaining the same percentage, the number goes up.
Recalls are all important. Particularly when you recall very old vehicles, it becomes tough to find the owners. But we have a commitment to do well. We were the leader in the industry in terms of completion of recalls, because a few years ago, we had already introduced a system where we actually called the customers up to six months. This was a year before the recent – let me say before GM.
There you go.
So we keep on working diligently, adopting to the new requirements that there are. So there is a lot of traffic related to the recall, people asking and calling. We deal with them our best.
Are you getting more calls from people who have tried to go through their dealers to get things done?
I wouldn’t say we get more calls in absolute terms because we . . . to be fair, I don’t measure – I mean it’s difficult to measure. First of all, you shouldn’t – I don’t measure mine, the levels that I receive, because every time I give an interview, [the contacts go up.] At least the ones that are coming directly to me.
A couple of years ago, I gave my email address during a live interview. So now I think my mail is owned by everyone who wants to call. It was funny because it was an interview with AutoLine, with John McElroy. At the end of the interview, there were live questions from listeners. One came up with a question about a particular problem he had with a car, and I was not familiar with that problem at the moment. So I said “Well, I don’t . . .” Because he was saying “I have this problem. Is it true that every car has this problem?” “Obviously not, but I’m not familiar particularly with the problem. So if you want to send me your specific problem, I’m more than happy to take care of it. It’s relatively easy. I gave my email.
He wrote to me with the problem and we took care of the customer, but he posted the email into a blog with a positive comment. “I sent the mail and he actually answered, so they fixed the problem.” So now every blogger, because you know how they are, right? They move from one to the other. So I got quite a number of [contacts] . . . so I don’t measure that. So an increase of popularity.
But I make a point of answering to everyone that is writing to me as well as we take care of also those that are writing to the CEO or others, because they are our customers.
I’ve sent a few people over to you, and you’ve gotten a few repeat customers out of that, which I always find interesting. I always thought if you have a problem with a company, you write to the company, but most people seem to believe that Chrysler stops at the dealership level. They complain to the manager and they complain to the owner of the dealer, but they don’t call Chrysler.
Yes, that’s tricky, and I’m not saying that we are perfect. Although we don’t – that’s not our philosophy. Over some time you get complaints ... “I bought a car from a dealer and they told me the car was perfect, a used car, then it turned out the car was not perfect.” As a company, obviously I have a vested interest to try to fix the problem because it’s one of my customers. But I cannot really take on every single problem that there is in terms of the relations.
We try to do our best. Normally we try to move the customer to another dealer, because sometimes there is a problem with the relationship, if there is a problem with the relationship, you can’t really [do much].
I personally still prefer a customer to complain rather than a customer being silent. If they complain, we have a chance. It’s like oh, from a customer that wrote two mails. A customer that wrote to me a couple of months ago and said “Listen, you fixed everything, but now I have a new problem. So can you look into it?” And another that wrote to me last week and said “Oh, you guys have been wonderful. You took care of everything.”
We sell more than two million cars every year. It means that you have millions of interactions at dealer-level to buy a car and millions and millions of interactions at dealer-level for service. Millions, right?
In the US we have a total of about 30 million cars on the road. Even if you take only the zero to ten years old, because I would say these are merely the cars that are coming to the dealer, we have 20 million cars, and they come to our dealerships, say, once a year. It means you have millions and millions, in the neighborhood of 20 million visits, so the chances that there is something going wrong is huge and we need to take care of every one of them our best.
So this is a Lavazza coffee maker. By any chance, it’s from Italy, it’s from Turin, the city I come from. So 25 years ago I sent a coupon that I got to the company and I was supposed to receive some coffee with a little coffee maker. And I didn’t. So at that time I had still probably a bit of time to take care of these things, so I wrote a letter to Lavazza saying “Sorry, did you receive my coupon? Or for some reason you lost it?” And I didn’t get any answer.
I got pissed off, so I went online, and I found the name and address of the office of one of the officers who was one of the owners of the company, and I wrote a letter saying, “Dear Mr . . .” Actually, I think he had more or less my current position, for Lavazza. “I understand that you may not have received my original, but the chances that you haven’t received also my second letter are very, very low. So what should I think? You send out these coupons because I guess you want to create loyalty, right? And now you don’t care?”
The guy, or someone for him, answered after a week, saying “Dear Mr. Pietro, sorry something went wrong. Obviously we don’t want these things. This is your machine, your Mocha. Feel free to call me if you have other issues.” So since then I remained loyal to Lavazza. Not because I did not have problems, but because they showed me that particularly in that particular case the owners at the top of the company, they were caring about the customers.
By the way, we are talking about coffee.
But much fewer service requirements.
Well, that was true actually at that time. Today with all these machines? Lavazza, espresso, at that time it was probably true. Around that time it was just simply coffee and some mochas. Now that they sell this stuff and they are in most of the offices, particularly in Europe... in the past Levata would have screwed up with a family. Now if you screw up the relationship with one of these machines that is in the office, you probably touched 20 or 30 people working in that office. So quickly you – and you have alternatives, because you buy espresso.
I always found, because at the end of the day, I always try to relate what I do with the experience that I have as a customer. If you don’t mind, I’ll tell you another story. I was giving interviews funny, because the guy was Eric Mayne. Four years ago. You know Eric?
Yes, he just solved a problem for me.
So the first interview, actually, that I was giving to Eric . . . we were at a restaurant. We met at the restaurant and sat down waiting for service. We were talking and I was introducing myself. So the lady comes, the waiter. Zero interest about the fact that we were talking. “Hi, I’m the server for the day. Blah, blah. This is the menu. Can I bring you water? Blah, blah, blah.” Okay, so we took the menu and so forth.
Two minutes later, we were talking. We were already in the interview. “Sorry, sorry, sorry. Because I didn’t say that my name is Julia.” Actually, when she came, she didn’t say the name. So she came back and said “Oh, I didn’t tell you that my name is Julia by the way.” Simply because, I mean, I think part of the process they teach them is you need to go and you need to introduce with your first name. So she thought, “Oh, I forgot a piece of the process.” So she went back. She interrupted us to tell us that she was Julia.
Five minutes later, she comes to get the orders. I say “Okay, can I have the burger without the mustard?” Or the burger without the whatever.
“I’m sorry, it doesn’t come . . . they all come the same.” I don’t remember. Then she left. And Eric was talking to me about customer care.
I said “Did you see? So there’s the perfect example of someone using instructions that were given to her to support the customer. So going through the process, I need to introduce myself as Julia. But zero empowerment to really taking care of the customer.” Because she went fine until she was following a process. As soon as you get a move from the process, . . . can I talk to the kitchen and ask if they can do the pasta without the garlic? That was not part of the process. So the customer becomes totally unlistened to.
I said, “That’s the problem. The problem is not just following the instructions, but really finding a way to care.”
So I always try to think about the customer in the same way I feel when I deal with someone. And in most of the cases, you find all of the answers that you need. Now I’m preaching. Sorry.
I think we can all agree that we all know that you can have issues with a car as well as with other problems. The loyalty of your customer is not based on not having issues, or those that have repeated issues, but it’s based on how well you take care of the customer. It’s very simple. We do exactly the same. If you never experience a problem with your recorder, you will definitely consider to buy another one the day you need to replace.
That’s my second one. The first one fell apart the last time I interviewed you.
It was an Olympus, too? But I’m sure that you will consider another one based on the features, the price, and whatever. You’ll go, and probably the dealer is going to offer you Sony, Panasonic, etc. You will be probably inclined to buy another Olympus. But if you find another one that is similar, the brand is okay, and it’s a good . . . Sony, you know? Very good reputation, etc. You will consider the other one.
But if you have a problem with this one, and you call Olympus, which by the way there’s a big problem with all these devices that they don’t provide any longer direct service. But let’s assume that you call Olympus and they are incredibly good at sorting out your problem. The next time you go to buy a recorder, you will value that experience as an important reason to stay with Olympus. Even with maybe a slightly higher price.
I had an experience with this brand too. We were leaving for a short vacation with my wife and my wife bought a little bag, one of the messenger bags at the airport. And when we arrived to where we were going, she found out that the strap was twisted, right? So it started in one way and it was twisting, and it was impossible to turn it. We bought it at the airport, so it’s not a place that you normally go. So when we came back, we asked at the airport, and they said “You can call this number.” So I had this number forever in my wallet. Sooner or later I made the call.
Then one day we stepped into the Tumi store in the Somerset Mall in Detroit, where I bought the backpack. I had said, “Take your bag. We can ask at the store.” The guy [at the store] that didn’t sell us the bag looked at the bag and said “That’s weird. I’ve never seen a bag with a twisted strap.”
My point was, can you send the bag to the customer service center? “Oh, no problem.” He took the same bag from the rack and gave a brand new bag to my wife, saying “Take the new one. I’ll deal with it.”
I think we both already have no less than five different luggages, backpacks, and rollers in that store. I will keep on buying from Tumi forever. Although it is one of the most expensive brands for bags, they are very reliable, so very good quality. But not that you don’t find similar quality. I have another backpack that is an Oakley, so it’s a good brand. But I make a point to keep using also that one, so I switch from one to the other, for the brand and for the service.
Go to part 2...
Also see: 2012 Pietro Gorlier interview • 2013 Pietro Gorlier interview • Other interviews • Chicago Auto Show
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