Published in Automotive

Predictive Analytics, Dealer Service Centers, and the Promise of Forecasting Vehicle Breakdowns Before They Occur

So, you’re out for an evening at the mall and when you return to your vehicle, it won’t start. Or, like the woman above, your vehicle starts sputtering as you’re driving, the “check engine” light comes on and you’re fortunate enough to pull to the median inside emergency lane of a busy freeway where it dies. Then you begin that arduous process of calling the tow truck, riding with the wrecker to the service center, waiting for someone to diagnosis your problem (possibly with a diagnosis charge), and then comes that cumbersome repair scenario—experiencing the fear of the unknown throughout the entire process. If you’re lucky, you’ll get a loaner to drive for the repair period. As far as the CSI score for the service center goes, it’s a pretty big challenge for them to deliver a memorable customer experience, because solutions are fragmented and many times, handled inefficiently.  That process has been in place for decades.

What if I told you that dealers already have the available technology, via predictive analytics, to catch a “roadside breakdown” before it happens, what would you think? Maybe, “Why haven’t I seen that process yet?”  While mixed forecasts have made predicting the formal arrival of the completely autonomous car vague, many “predictive” applications are available today, thus saving time, guaranteeing personal security, saving money and delivering peace of mind. And this can all occur “prior to the breakdown”. But in the dealer world, most of the predictive analytic solutions are skewed towards the sales side. However, retailer sales efforts have much less effect on customer retention than does the customer’s service center experience. Retention, for the most part, begins and ends with the dealer’s service center because, while car buyers visit the sales “guys” once every several years, they usually visit the dealer service center every few months, especially during “free maintenance services” times offered by the OEM.

Predictive Analytics Arrives at the Automakers

The early arrival of proactive technology for auto service was telegraphed almost 2 years ago in an Automotive News piece titled General Motors innovation could rewrite service business. GM, via their 20-year-old OnStar unit, was the first to begin building the framework for an alert process that would warn the vehicle owner of a breakdown before it occurred, thus producing a just-in-time customer experience that would have the potential to not only create financial efficiency for the service center, but just as importantly, to capture the hearts and minds of vehicle owners.  However, this huge improvement for the car owner will prompt a big challenge for the service centers when they have to change their “reactive” process into a much tighter and well-oiled proactive process that will create a new order of things for an industry pretty set in their ways.  But it should also create an advantage over IRFs (Independent Repair Facilities), who are dealerships’ primary competitors. Sounds exciting, doesn’t it? But that article spoke of a process that is far from being realized in today’s dealer maintenance and repair world.

“Imagine a customer arriving at a dealership’s service drive with the diagnostic work completed, the faulty part identified, and the warranty repair approved before a service writer even greets the driver.”

Automotive News 2016-8-15

The Cultural Problem of Shifting from “Reactive” to “Proactive”

The problem is not with the predictive analytic technology, because that’s inevitable, it’s integrating that technology with the process changes and cultural shift required at the “customer delivery point”. Dealership service centers have enough challenges just operating with the current “reactive” nature of their business. The implementation of a “proactive process”, involving predictive analytics will also present a huge challenge on the part of a management group that, itself, is tightly tied to a culture of “reactivity”. Many may not choose to implement it until they are forced to by the OEM.  Changing behavior in humans is the hardest management feat of all. To be candid, research reveals that many service centers already have plenty of trouble simply following up effectively on “maintenance alerts”.

Dealers Absent from the “Predictive Analytic” Loop

In addition to the challenge of integrating the kind of proactive cultural change required in dealer service, there’s just as much challenge with the fact that dealers seem to have been left out of the loop when it comes to the predictive analytics process. Whether by their own fault or the lack of cooperation between OEMs and dealers, dealer service centers have been MIA from “predictive” discussions. While articles like the one above describe a world where 1) the “potential breakdown” alert is discovered 2) is transmitted to the vehicle owner (enhanced with a BDC phone call) and/or transmitted to the service center only 3) the customer makes an appointment 4) parts, service advisors, loaner department and even the appropriate techs are alerted. The reality of HOW this is all to take place at the customer facing level has been pretty well left to the imagination. Articles like this one from Automotive News explore those issues more in depth.

Entrepreneurial Parties are the Most Likely Partner to Make This Happen…TODAY!

If the OEMs and dealers can’t get it together to bring forth “predictive analytics” at the customer point, then fast moving, highly skilled and enthusiastically proactive digital players will make it happen. And unlike the OEMs and even dealers, these entities can turn on a dime! They can offer a product application today that can start the process of evolving the service center into a proactive role, thus eliminating the disruption, personal security threat and unpredictable expense outlay of an unexpected disruption.  And they can transform a very negative outcome, into a positive event that will build customer loyalty and trust. While the majority of other “predictive analytic” efforts are focused on direct to consumer applications, a very few have the dealer service center as their target.

There is no doubt that “predictive analytics” will be a large part of the car ownership in the future. The big question is how much longer consumers have to put up with the uncertainty, fear and inconvenience of a vehicle breakdown. Stay tuned for part 2 in my next post.