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Customised Services or Factory Flows?

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Lean thinking has never really taken hold in dealerships, as there are very few examples of application that have been effective and sustained. Does enthusiasm for process control and standardisation get in the way of good customer service? I recently had a discussion with someone who has been working with a dealer group that had applied lean analysis tools derived from manufacturing to create recommended new standardised sales and aftersales processes, and whilst the latter had generated short term anticipated improvements in efficiency, there was little to no enthusiasm for applying this to other sites within the group, partly due to a lack of evidence of growth of either customer retention or revenues.  

Part of the problem may be overreliance on hard measures of efficiency at the expense of longer term measures of effectiveness. In sales, the lean dealer spoke of creating a takt-time, or average process cycle time, for handling each customer with a standardised sales process. Our research has found that customers don’t like being forced through a fixed process with sales techniques based around a formula; fundamentally, this is because customers vary in how they value the advice and services that dealer staff can offer. Some customers are self-assured in their selection process, and seek detailed information on products and services from a variety of sources, including dealers on product availability and trade-in evaluation. Other customers who genuinely enjoy the sales negotiation process are looking for the salesperson that will make them a special deal and play a negotiation game. A third behavioural category is typically cautious, feeling ill-equipped to negotiate product, price and deal, and seeks assurance from friends and family, although this buyer type will shift source of assurance to the dealer if the dealer earns their trust. The same activity may have a different role; for example, after completing a test drive, some customers have confirmed their pre-test drive decision and are ready to buy, whilst those customers who like to compare many products will be a long way from that decision as they will take many test drives early on in their selection process. A standardised process cycle time takes no account of these differences and seems to ignore the value of meeting customer needs of the sales process itself.

In aftersales, the lean dealer insisted that customers bring their car to the workshop and go through the walk-around with a technician. Our research shows that some customers genuinely value courtesy cars, and pick up and collect services; many customers really do not want to spend time at the dealership, and some really dislike active selling in aftersales disguised as advice and consultation. Yet for this dealership, anything other than the walk-around when the customer brings the car into the workshop was considered ‘muda’, or waste, and a missed opportunity to both pre-diagnose faults and sell additional fixes. Again, our research has shown that customers define a good service in different ways, and some are willing to pay for the additional costs incurred by the specific services that they consume, including a courtesy car, which for some dealers is also an opportunity to provide a demonstrator to help the customer enjoy an extended test drive.

There are two gaps between a more flexible interpretation of lean and one with an excessive focus on process efficiency. The first gap is between appreciating the value of information and how that information is obtained. For example, in aftersales, better information and insight can help to create more predictable work, and so balance workshop flows; some of the information gaps can be resolved by technology rather than rigid processes that constrain how staff interact with customers. Telematics will begin to reduce the need of pre-diagnostic inspection in service and repair, and using tablets in workshops is today already allowing some technicians to communicate directly with customers in real time. Equally, bundled sales and aftersales packages, will further transform the role of new car sales staff from infrequent deal-maker to service provider for many customers, and increasingly ‘always-on’ communication and connectivity will allow a more tailored and customised provision of services and preferences. But the second gap is more fundamental and involves the thorny problem of trust. Customers want service providers to engage with their specific needs on their own terms and will pay for good provision of services that meet their specific needs. Our research has shown that in sales and aftersales alike, the service provider that listens and responds to the specific requirements of individuals will earn the trust of customers, whilst those that force customers down a certain route will frustrate and lose customers, regardless of whether that fixed process delivers efficiency gains that the customer might consider valuable.

 

Written by Ben Waller

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