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Dealing with dealers: Mopar chief Pietro Gorlier, 2013

pietro gorlierIn August 2012, you announced that you were going to stop using incentives and rewards based on customer satisfaction surveys for the dealerships.

Yes, that was an announcement done to refocus the attention on customer service. It doesn’t mean that we don’t consider the customer’s satisfaction to be an important element, but we saw that the way in which we were running the customer standards, as they were called, was really not driving an improvement in the customer experience. There were improvements in the various items, but then we didn’t see exactly the type of work [we wanted].

So we moved, in agreement with the dealers, after having discussed it with them. We reviewed the process, and we still have standards, but we created a system where dealers can go and do a more deep analysis of the reason for dissatisfaction and correct the process.

I would say it’s a different approach, giving them more empowerment in fixing their processes. The incentives were done at the very beginning to give a boost, but then you can argue that you shouldn’t incentify a dealer to treat the customer well. So it was kind of an initial boost that was needed to grab attention, to get attention to the problem… but now it’s part of their major targets, to improve their customer satisfaction; it’s the only way that they have, to ensure that the customers will return in the future.

We move from being more prescriptive on the specific standards, to be more driven by the analysis of why the customer was dissatisfied and correcting the process. We don’t think it’s going to be completely different, but it’s empowering the dealer more.

dealership standards

The problem with the standards is, you set a standard, you say you need to answer the phone in less than three seconds. You need to have a receptionist. You need to have… you try to find a number of things that are going to give a good customer experience. Then you have cases where the dealer is meeting all these standards and the customer is still unhappy. And that may be because it’s more in the soft factors. It’s the way the people in the dealership are speaking or the way in which we take care of them.

So the risk when you have these standards is focusing too much on the prescription, but not fixing the root cause of the dissatisfaction. So we agreed with the dealers to go towards using customer feedback to go back and fix their processes.

What have the results been like so far?

gorlier and evansI think it’s relatively early to see a change. We have seen improvements when you look at some of the statistics in terms of customer satisfaction, I cannot say today that we have seen a trend that is where we would like to be. It’s probably a bit too early.

The process of changing the customer attitude is a long process. The customer experience is a long process. What we saw that is very encouraging, is that we get a lot more engagement from dealers. Dealers now, they own the comments, so they have the responsibility to fix the process.

How would you say that Chrysler dealers in the United States fare… how would they handle the customer experience compared to the rest of the markets?

There is no doubt, if you look at some of the surveys, J.D. Power, etc., we are below the average experience. ... [For a mainstream brand,] we are in the middle of the pack, and we need to be much better.

I don’t think we are significantly worse or significantly better than the competition, but we want to be better. We want to try to lead in the next three, four, five years to become really leaders for customers. I think our CEO has been outspoken about the fact that that is one of the areas in which we need to progress.

There is a distribution. We have excellent dealers that are doing a fantastic job and other dealers that are less so. I've been dealing with customer care for many years. The process of change – first of all, the dealer is not the only one responsible. We need to agree, it’s not just the dealer. It’s the complete chain from the manufacturer to the dealer. It would be wrong to say that we are perfect, the problem is the dealer. I mean you need to have good cars because if you don’t start from a good product, first of all, you don’t get a very happy customer, and I think that is an area where we have done lots of improvements. There is no doubt our cars are significantly better today.

Then you need to have good processes with the dealer so that you support the dealers, you give them all the tools, all the programs to make the customer – to take care of the customer. And then you need them to have the processing inside the dealers. So you need to work side-by-side with the dealers to improve this chain.

wiadvisorWe have done things, for instance, at MOPAR recently we have launched the wiADVISOR [née WiTech]. This is a public-based reception system that allows you to do the reception of the car in 15 seconds. You plug a little port into the car and you get all the downloadable information, etc. It’s unique. We are the first manufacturer to offer it. There are aftermarket products, but we are the first one to offer something like that as a factory deal. And that will allow a much better reception of the customer. It will allow the service advisor to have all the data on-hand. And these are the kind of things that we do also for the dealers, because at the end, we have to work with them. So while we think wiADVISOR is going to be important.

Do you find that there are some dealers who get it and really want to work with you and improve the process, while others basically say I'm making money, I've been making money, I've been successful this way, and I don’t need to do anything different?

I don’t think there is a dealer that is saying, “I don’t need to take care of the customer.” There are dealers who are more sophisticated in the way in which they approach customer satisfaction, and others that are less sophisticated. I have never found a dealer saying I don’t care about the customer. You are not in the retail business if you think something like that.

But there are dealers who are more sophisticated. There is also sometimes a problem of limitation and investments. We have very good dealers who are suffering, for instance, from not having enough space. They should expand because you get traffic in the service garage and you cannot really take care of everyone. Sometimes, it’s also a better investment.

Instance, in some of the surveys we found out the cashier is the problem. Because the cashier is normally the last chance. It’s the guy before leaving the dealer. There you say you really need to change, because he’s a nice guy, but he doesn’t have the attitude. They say oh yeah, but he’s my brother-in-law. He’s my brother. So you get some changes sometimes inside a dealership that are very hard to execute.

motor village dealership

Then you have some dealers that are more sophisticated and some that are more conservative in changing, not because they don’t care, it’s simply they don’t… it takes some time to understand that you’re doing something wrong. It’s something that we have also. ... It takes time to accept and say okay, I need to change. I think the problem we have today is allowing that to be more transparent. I mean, the customers are telling you, then you go into the root cause analysis and you say that’s the problem. The fact that they are making money, it may be a risk [of complacency] sometimes, but it is also an opportunity because they can invest. Hey, I still prefer a dealer making money than a dealer not making money.

It’s always that balance. When you’re making money, it’s hard to make change a priority.

There is no doubt, this is one of the discussion that there is always… dealers are making much money, they become lazy, etc. Dealers are entrepreneurs, so our responsibility is to help them to understand the reasons to make investments and to change, to preserve the viability of that business.

For instance, with better quality extended maintenance intervals, there is a significant trend in potential reduction of the service traffic, right? Because the warranty was, years ago, 50% of the business, but today it’s less than 15%. Maintenance intervals are almost double.

pietro gorlier and don garlits

If you want to preserve your service, you need to increase the retention of your customers. So if you were retaining four customers out of ten, now those four customers are coming back at a lower frequency, so it’s better for you to retain one more. It was not important before, but it becomes very important.

So you need to have these kind of conversations with them, with the dealers that say okay, I need to make an investment. This is the right moment, I have some money, I need to do that because you’re going to allow me to be sure that in the future I have a viable business. And usually, you have a distribution. You have some guys that are more difficult, some that are very advanced, then you have the middle.

Have you been getting fewer letters from angry customers?

mopar ceoAs a matter of fact, yes. This is a very good question, because I always try to monitor the number of complaints that we receive. We are also selling more cars, but there is a trend, although I also see that the more Chrysler becomes successful, the more demanding customers are becoming.

We have started seeing a declining trend [in complaints], and also see a significant improvement in the satisfaction of the customers that are calling us to sort out problems. The time to sort out problems, the response time, is becoming much better. So there is a positive trend.

The more the company’s exposed to the public, the more people are encouraged to send you a letter or ask you for something, but there is a positive trend. We see a decline in the ratio between the complaints that we receive and the cars that we have on the road. So this is a good starting point. It took a while to get to that point, but in the last 18 months finally the trend is going the better way. Although we know we are still dealing with some cars from the past that didn’t have a very good quality.

There’s also a counter trend that as you resolve problems, the word gets around that writing to you is effective, and you get more letters. We’ve been sending people to you and they’ve been posting your actions.

Also, our CEO is normally very vocal.

Obviously, you cannot sort out every problem. It’s always a very tough call. You get the customer that is calling you, he has a ten-year-old car, he doesn’t accept that the roads are a problem, right? This car should’ve lasted 200,000 miles and it’s not acceptable. The point is that I understand that, but there are limitations, right? It’s not always [possible to help]. We have become more sophisticated in the way in which we look at the problem. So we might say “Here is something that, although it is outside the warranty, outside the normal conditions, we should do something because there was really, for instance, a repetition of the problem, or something like that.”

five star dealer repair bay

What we are absolutely committed to is that everyone who is writing to us is going to be contacted, the case is going to be analyzed, and there are no automatic answers or no automatic ways of dealing with a problem. We may say no, but that is after a thorough analysis of the case. In most of the cases, we try to take care of the customer in some way. Sometimes it’s just closing the loop with the dealership.

We empowered our dealers to be more responsible in processing goodwills [out of warranty repairs that are covered by the factory for goodwill]. We gave them more power to take care of the customer and say, at the end, “I’d rather that you to be allowed to take the decision, we may be having a discussion afterwards, saying ‘why did you pay that?’” Even if in 10% of cases I wouldn’t agree, I wouldn’t have done that, I still prefer to be sure that we can take care of the customer.

gollingSo we gave more power to the dealers. The process that we had years ago was more cumbersome. They had to call us for the authorization. I don’t want a customer driving into a dealership, then having the dealer say “No, you have to call Chrysler.” No, the dealer is Chrysler, so he has to take the decision unless it’s something really weird.

I think that is another reason why you see also this increased positive feedback from customers for the way in which we have treated them, when they have called, is that we are more responsible and quicker to make a decision. There are still cases where we screw up, but that’s part of life. There’s always an opportunity to improve.

We close the loop with the dealers to understand what happened, because I don’t take for granted every time I get a complaint that the dealer really did something wrong. There are cases where you get the unreasonable customers. There are cases. But in most of the cases we get, we could’ve done something better. So if you make a mistake, you pay the bill.

So what do you think of Mopar?

I think that you are moving forward and doing things that I would argue should’ve been done a long time ago, but other companies aren’t doing them — you’re still doing them first. When I used to work in consulting, consultants who worked in automotive seemed disgruntled because it always seemed behind; it’s like we’re catching up with the 1960s now. With giving dealers the latitude to make decisions, I think of the work done in the late 60s and early 70s, and it worked beautifully.

Yeah, I think you touch an interesting point. That is something that I have been very vocal at many interviews and also speaking with dealers. For some reason, automotive – especially in the US, especially in the US – is a retail business that didn’t align the processes to the other retail businesses.

When I need to discuss with a dealer to be open on Saturday in the US, as we discussed in our last interview, why should we have that discussion? I mean in the US, it is the country where everything is open Sunday and Saturday. In the country where all the independents are open both Saturday and Sunday.

model dealershipIt’s like you open a restaurant that is closed Saturday night. You say all the other restaurants are open. It may be because customers are interested even more than the rest of the week about going out for dinner on Saturday. And I think, I think, it has been because the industry was flourishing so well that they were okay… [they may say] it doesn’t matter if they go for oil changes. There is not a lot of money to be made on oil changes if they go to the independents. Obviously missing the big picture, [because] if the guys start going for oil changes to the independent, then after two or three years they go for brakes, they may go there for transmission, they may go there… so you lost not just the oil changes, you lost everything.

After three or four years when the guy’s back into the market for a new car, it’s [inaudible], right? It’s “we’re going to buy, so let me go around,” rather than keeping the guy connected to your store, etc.

I'm not saying that all the dealers are like that, but when I came on board, less than 60% of the dealers were open on Saturday. Today we are at the moment 80%. Still, I don’t like it. I want 90%, I want 100%. But it means that four dealers out of ten, four out of ten

The crisis was a good wake-up call for most of the dealers. That has been probably changing.

Now, the blame is always 50/50, because it’s not just that they were not open, the company was not doing enough to push them to open, right? So then you start to sell so many hours, Express Line or... I don’t know, there was a guy eyeing over a car here. “Oh yeah, I need a new car. I need to trade in.” [I say,] “Okay, give me your business card. I'm going to give it to the business center; you'll get a car from a dealer.” If you are in the retail business, you sell 24/7.

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