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Dale Pollak’s highly regarded book Velocity encouraged dealers to rethink the fundamentals of the used car market. Traditional management practices for buying and selling used cars could no longer generate high investment returns, Pollak argued. In particular, he emphasized that ignoring price competition from the Internet was foolish.
Velocity was published in 2007. Many dealers resisted this new way of thinking. But, it’s now undeniably clear that Pollak was right.
A similar market revolution has been occurring in the service department. Just as with the used car market, this is not a choice. The automotive service process is changing, period. Consumers are one click away from every service competitor in the market, including independent shops and chains. In addition, consumers have access to numerous online reviews – many are simply horror stories – that cement a feeling of distrust toward the car repair process. The only question is which dealers and service managers will adjust to the “new normal.”
I recently went back and reviewed Velocity to see if Pollak’s insights about used cars could apply to service and repairs. The similarities are striking.
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