(Below is the text of Brad Simmons' recent op-ed in Fixed Ops Magazine. To view the online version, go to this link and see pages 74-75.)
The Future of Service Inspections Began in 2012
Mobile, Transparent and Credible
Brad Simmons, CEO of ClearMechanic (www.clearmechanic.com)
We will look back at 2012 as the beginning of a transformation in service inspections. It may be difficult for individual service managers or technicians to observe the magnitude of this industry-wide transformation. But it is happening.
Google founder Larry Page recently remarked that, “we overstate how much change can take place in one year, but we understate how much change will occur in five years.” Consider this as proof: the iPhone did not exist in early 2007 and Android phones were not released until late 2008.
Similarly, I am convinced that, 4 to 5 years from now, we will look back at service inspections conducted in 2012 and cringe.
The early sign of a fundamental shift in the automotive service industry began this year – and it involves the rise of smartphones. Most service advisors and technicians now personally own tablets or smartphones, just as most consumers do. OEMs and large dealer groups are investing major dollars to incorporate mobile technology into retail processes. And, the most important trend, service personnel are incorporating smartphones into ordinary business processes without being told to. This includes simple tasks (searching the Internet for business information) and complex tasks (iPhone and Android applications for inspections).
The Shift to “Mobile-First” Solutions Took Our Company With It
There are no white papers supporting my view or industry organizations to corroborate this data. Rather, I know a special transformation is taking place because it is taking our company with it.
Four years ago, when ClearMechanic pioneered the concept of “visual selling” with real-time vehicle photos, we were greeted with skepticism. “The concept is great,” we heard time and again, “but how can we actually get vehicle photos in front of our customers during the repair process?”
The short answer is, we could not – at least not easily. We supplied our customers with expensive digital cameras, embedding WiFi chips and placing routers around the shop floor. We developed processes to tag photos and e-mail them to the correct customers. This all required substantial extra effort from service advisors. This was considered real innovation!
Any experienced service manager who reads the previous paragraph knows where that story ends. Complicated extra steps for service advisors usually die painful deaths.
ClearMechanic needed something different and, being headquartered in Silicon Valley, we instantly saw the potential for smartphone applications to address our technical hurdles. So, we built iPhone and Android applications to let service centers instantly share real-time photos and videos with customers.
We started growing and advancing our technology in important ways. But, in 2010 and even 2011, we still repeatedly heard the following from customers: “How many of my guys even have smartphones?”Now, at the end of 2012, I literally cannot remember the last time I heard this objection from a customer. It is now assumed that most techs own smartphones, know how to download apps and are comfortable using mobile solutions at work. When I saw customer conversations transition from doubt (“does anyone here use that?”) to assumption (“of course we use apps, don’t insult us”) in less than one year, I knew we were entering an era of rapid, fundamental change.
The Type of Inspection That Will Soon Die
I suspect many industry observers will concede mobile technology is changing the car repair process, but may not grasp the scale of its impact. To those skeptics, let me provide an example of a service process that will be extinct in several years.
In October 2011, NBC’s ‘Today’ Show sent an undercover reporter to investigate the practices of five Chrysler service departments. NBC hired an independent expert to manufacture a simple air conditioning problem (by inserting a defective relay) that he wanted the service department to locate. The question was, would the service personnel “discover” any other problems? Naturally, everything was captured on hidden camera.
One of the worst moments in the report was this exchange between a service advisor and customer:
Advisor: “So, the AC compressor, kind of, almost I wanna say, exploded.”
Customer: “My compressor exploded?”
Advisor: “Pretty much.”
Understandably, that flat lie received the most attention from NBC’s reporter. But another portion of the investigation is equally disturbing for our industry. Several dealers presented additional service recommendations, such as AC system charges, which were unnecessary. When confronted by NBC, these dealers justified the recommendation by saying the mileage of the car (40,000 miles) called for the additional service. But, NBC had real-time video of its independent expert conducting AC pressure tests before each inspection to prove definitively a system charge was unwarranted.
The NBC report was a reputational disaster for Chrysler and the five named dealerships. Like dozens of other hidden camera investigations of repair shops, it was also a black mark on the entire industry. Given the general public’s distrust of automotive repair facilities, it is not surprising that consumers reject 60-70% of all repair recommendations. Moreover, franchise dealers suffer from abysmal 20-30% retention rates, in part because consumers search for cheap options when they believe no service facility can be trusted.
A Peek at The Future of Inspections
Notice how dealers’ deceptive practices were documented by NBC? Mobile cameras and video recorders. That same technology, now embedded conveniently into smartphones, will also force our industry to change for better.
Taking videos and photos is now easy with the right hardware and mobile applications. Really easy. Sharing the resulting large media files instantly with customers and integrating with your DMS is difficult, but that’s what vendors are for. (In addition to ClearMechanic, check out MPI, Xtime, ASR Pro and MOC Solutions for different approaches. As you can imagine, the technology must make the process simple or it will never be used by techs and advisors.)
Indeed, it is already happening – and I can show you. Below are two recent service inspections conducted with real-time video from a technician’s smartphone and instantly e-mailed and text messaged to customers. Click on the links below and select “Your Video” to see what the customer viewed.
As you can see, the combination of video and audio offers unmistakable proof to customers that a service is needed. Would you be surprised to learn the recommendations of these service centers were approved by customers?
And that is the final reason mobile technology will quickly transform the industry: it makes financial sense. In the case of real-time photos and videos, there are numerous case studies showing higher approval rates and dollars per RO when a customer sees photographic or video evidence of a repair need. As a thought experiment to prove this, imagine buying other retail goods or services without seeing visual evidence. Would you purchase a used car without dozens of photos? Any item on eBay or Amazon?
Carolyn Coquillette, owner of Luscious Garage in San Francisco and creator of innovative shop management system Hyspace, recently told me: “I take as many photos as possible to share with customers during the repair process. It makes no business sense not to take photos.”
Yes, But…Aren’t Service Centers Different?
Dealers and service centers are late adopters of technology, so innovation in other industries takes more time to influence the automotive sector. We saw this with slow adoption of websites and e-commerce over the past two decades. But, once new technology proves its financial value to service managers and principals, the adoption rate is rapid.
The evidence on the ground is undeniable. The future of service inspections began in 2012.
Brad Simmons is the CEO of ClearMechanic, developer of “visual selling” technology and services to the automotive repair industry. Visit www.clearmechanic.com for more information.