One of the staples for service department is tires, including sales, mounting, balancing and alignments. Tires are a price leader for your dealership and a great way to get customers in, providing you the opportunity for additional service work revenue.

Well, what if your customers no longer need to buy tires from your dealership? What if they could simply go on Amazon and buy them cheaper – just like everything else on Amazon? Cheap doesn’t mean easy though. Who wants tires delivered to their home or office, where they must pack them into their vehicle and get them to a service station to be installed? 

Here’s the deal…Amazon has just solved the EASY part of this equation. Now they own a cheap and EASY way for customers to order tires and get them installed.

How can Amazon, an online retailer with no physical stores, compete with your service department?

Easy, they partnered with Sears Auto Centers! Amazon tested the partnership at 71 Sears Auto Centers this winter/spring and have already expanded it to well over 150 locations nationwide. Now, customers that order parts on Amazon, including tires, can have them shipped directly to their local Sears Auto Center for installation. Not only is it super convenient for customers to order parts, the clear majority of Sears Auto Centers are located right next to a mall. Customers can drop their vehicle off, go shopping at the mall, or have lunch, then pick up their vehicle as part of a convenient day of errands and activity. This is a very different experience to waiting at a dealership or having to get transportation to and from the dealership, which is usually on dealership row, away from easily accessible fun activities for customers.   

Naysayers may discount the importance of this development, but they shouldn’t. With the acquisition of Wholefoods, Amazon has proven it’s no longer happy staying purely in digital e-commerce. And, while Sears was a retail giant last century, they have closed hundreds of stores over the last decade. I read about their financial troubles all the time and Amazon could easily buy Sears, or even just Sears Auto Centers, and create a whole vehicle service network to compete with dealerships.

Amazon is pushing even further into the bricks and mortar retail world. In fact, it recently announced that Amazon Prime members (which account for a whopping one-third of United States citizens at 100 million members) can now enjoy a healthy 10 percent discount on Wholefoods’ purchases.

There’s a reason behind everything Amazon does. It’s calculated, and they don’t care whether they disrupt or destroy a whole industry. And, it appears, it isn’t slowing down on its entry into the automotive industry. From parts, to at-home repair services -- and now tire and parts sales installed at a Sears Auto Center retail location -- the path ahead can only lead to more disruption in the auto service industry.

How are you as a dealer supposed to counteract this? The only way is to ensure customers choose your dealership for service work and tires is by providing a superior customer experience. As dealers, you must start looking at all your services the same way Amazon looks at things - from the customers perspective! You must analyze every step in your service process, remove the friction points and be extremely CONVENIENT for your customers.

The times they are a changin. The time to get ahead of the competition is now – well actually it was yesterday. But, if you act now, you can create your own superior customer experience and avoid the fate so many other retailers have suffered thanks to Amazon’s disruption.

Sales alone will only get your dealership so far. You need to retain your other profit centers to remain viable, both financially as well as in the minds of your customers.

In this video blog, Ujj Nath shares why AI will never completely replace humans and why.

If you have been paying attention to industry trends I am sure you have noticed the ever-increasing gap between the size of smaller dealerships and large auto groups. Groups are swallowing up smaller dealers left and right as they continue to grow.

Of course, size matters when it comes to many things in the dealership world and the consolidation of the industry will end up primarily giving the large dealer groups cost advantages. They can acquire and maintain larger inventories and attract more consumers, decrease the costs of doing business by creating their own brand of bulk OEM parts straight from China and handle more service business simply because they have more bays and more technicians.

How then, are small dealerships supposed to compete?

Well, let’s talk about what can happen as these large groups continue to expand… they risk becoming mediocre. With the volume of vehicles they now need to sell, and the quantity of vehicles that must be serviced, the simple act of juggling this volume of work can quite easily turn them into more of an assembly line.

That’s where the smaller dealerships will find their edge. Smaller dealerships can have a more personal approach and provide more individual attention to their customers which can make them stand out. They can operate in a more agile manner, performing vehicle analysis for free and ranking them “Now” and “Later” so that the customer feels that you are truly looking out for them. The idea is to do something that large structured organizations typically don’t give the advisors or service managers the leeway to do.

I can personally relate to an incident where giving your service advisors more latitude, rather than less, (as large groups tend to do with their controls) would have helped. I had taken my Audi in for service, which was done on Friday, but I went to pick it up on Saturday. It was stored on the roof and, because of construction on a nearby building, there was a layer of sawdust on it. While they had washed the car, they did it right after service and so after the wash it got covered with sawdust. My bill was $3,500. I asked if they could wash it again, but they were thinly staffed, and the replacement advisor told me that it would take 45-minutes to get it done, at which point I left and went to a car wash and got it done myself. 

Wouldn’t it have been very powerful if the service advisor had said - “Sorry for the inconvenience, I am crediting you $25. Please take the car to a car wash as you are in a hurry!”  Simple things ... easy to do ... give every SA a $50 discretionary customer satisfaction discount.  Which is something luxury hotels routinely practice.

There are simple things that can be done in the service department such as improving communication with the customer with a better system of status updates and ETAs. Or offering multiple forms of communication including text messages, along with email and phone based on customer preference, would be a great start.

Smaller dealership can provide that personalized service that customers find satisfying and unexpected.  I have yet to see a dealer that does not discount their services to keep customers. How about offering a pickup and delivery service so that customers can get their cars repaired in the luxury of their home.

Now is the time to start thinking about what your dealership can do to differentiate itself if you want to compete in the future. The large auto groups will only continue to grow larger, so make sure that you don’t find yourself getting smaller at the same time.

In this video blog, Ujj Nath shares more uses for video walkarounds than just inventory merchandising.

Ujj Nath explains why old-school paper multi-point inspections are outdated and shares a better solution for dealers in this video blog.

For today’s consumers, time is the ultimate commodity. No matter how much money they have, consumers are always on the go with their busy lives. Whether that means shuttling the kids to soccer practice, or running a bunch of errands, when it comes to fitting vehicle service into their busy schedule it is often viewed as a large and inconvenient time sink.

To help improve the service experience and enable customers to better occupy their time, dealerships across the nation have installed amenities ranging from shuttle service, to in-dealership restaurants, to mani-pedi services -- even movie theaters.

A recent article in Automotive News shares an interesting story about an ultra-luxury dealership; Post Oak Motor Cars in Houston, Texas, that recognizes how customer retention is the MOST important goal for any business.

In fact, this dealership will do just about anything to satisfy a customer and overcome the time objection. Their customer amenities are all based around saving time – and they are quite something! Are you in need a helicopter to bring you to the dealership? Done. How about a chauffeured Rolls-Royce while your car is being serviced? Want pick-up and delivery service? They’ll pick up your vehicle in an enclosed trailer, service it and deliver it right back into your garage – even across state lines.

Yes, this is an ultra-luxury dealership which services brands such as Ferrari, Rolls-Royce and Bugatti (amongst others); and their competitive edge is that they are willing to go to any length to earn (and keep) service business. Of course, given the price of these vehicles, they deal with very wealthy clients. And one of their biggest challenges is communicating with them. A star football player can be very difficult to reach via phone. So, what do their customers prefer? Text messages and emails. And not only does the dealership provide these methods of communication, it also provides each service customer with video and photo documentation of services to ensure the ultimate in transparency, keeping their customers informed and engaged. And it works.

Don’t worry, I am certainly not suggesting that your dealership should run out and buy a helicopter, or drive to other states to service (and return) vehicles. The lesson here is that regardless of whether you’re a domestic or high-line franchise, customers of every income value time over just about everything else, (including service coupons). It’s no longer discounts that motivate customers, but rather time-saving amenities. It doesn’t matter whether the client is a pro-athlete, celebrity, or stay-at-home mom – or whether they own a Ford Focus or a Bugatti.

Next time you’re considering how to improve customer retention and build your client base, instead of looking at things that make the customer’s WAIT AT YOUR DEALERSHIP less boring, try thinking a little bigger. Think about how you can make their wait at your dealership non-existent (or as much as possible.) You might find that saving time is more important to them then providing a free lunch or a movie.

Ujj Nath sends a wake-up call to dealers as Amazon enters the automotive service business in his new video blog.

Most dealerships at the very least conduct some form of multi-point inspection and inform the customer about any needed repairs discovered during the inspection. But what happens if those recommendations aren’t properly documented?

Well, failing to document those recommendations can be an expensive mistake – and not just because you miss out on any future revenue as you cannot follow up on declined recommendations. There is a whole other side to the importance of documentation as relayed in a recent Automotive News’ Fixed Ops Journal article, which tells an interesting story about a very expensive lesson a California Ford dealer had to learn the hard way.

According to the article, the dealership purchased a Ford F-250 at auction then sold it to a customer who returned it complaining about “multiple steering problems.” The dealership then resold it and the new owner subsequently brought it into the service department with similar complaints.

The issues were never resolved and, sadly, while towing a van the truck had a blow-out and rolled over twice, resulting in permanent injury to the driver. And, of course, the driver took the dealer to court.

As the dealership could not provide documentation proving that it had, in fact, informed the owner of the worn ball joints, the jury awarded the driver a $7.5 million settlement against the dealership.

If you do not have a good system for documenting your service recommendations, it’s time to update your technology -- you are leaving future revenue on the table and are also at risk for similar litigation.

Many solutions now exist that could prevent this verdict from happening. I recommend having the tech do a video walk around on an iPhone, an iPad or Android Phone, then storing those video recommendations in the cloud.

First and foremost, I don’t believe that any dealer would intentionally withhold service recommendations – especially those that could endanger their customers. And, according to the dealer, they did inform the customer… but couldn’t prove it. That is why it is so important to make a record, AND have it stored in a way that is fast and easy to access. You can then follow up with the customer for future service revenue and protect your dealership from any liability issues.

No court could hold you liable if you recommended service, the customer declined it then unfortunately had an accident due to a part left unrepaired. But only if you have the evidence to prove it!

Amazon is leading the way in convenience. Do you agree? Ujj Nath shares his perspective in his latest video blog.

LONG BEACH, California –April 5, 2018-- --myKaarma, the leading communications and payments software provider for automotive dealer service departments, today announced it has received a $15 million investment led by Kayne Partners, the growth private equity group of Kayne Anderson Capital Advisors, L.P., an alternative investment firm managing $26 billion in assets. The investment will be used to accelerate product development and further myKaarma’s goal of improving the overall customer experience, efficiency, and profitability in automotive dealer service departments.  

“We are impressed with the company’s rapid growth and success within the automotive industry, which is clearly driven by its unique technology that solves major pain points in dealer service departments. This investment will allow myKaarma to bring its innovative and highly effective technology to market faster and further extend its position as a market leader,” said Nate Locke, a Partner at Kayne Partners. 

myKaarma’s software runs on mobile phones, desktop and tablet computers, offering two main features: end-to-end customer communication, and payments. The communications tools are designed to blend seamlessly into a service advisor’s daily workflow and can be used across various mediums of communication, including voice, text, and email. Service advisors gain new capabilities, such as sending photos and videos of vehicles to customers to contextualize new repair recommendations and receiving real-time authorization from customers for additional work. Once the service process is complete, customers have multiple options for paying their bill, including online, which allows them to avoid waiting in line at the dealership when they pick up their vehicle.  

After implementing myKaarma’s cloud-based software tools, service departments enjoy an average lift in dollars per repair order of 37 percent, a 50 percent reduction in voicemails left with advisors, a 100 percent reduction in authorization disputes, a 33 percent decrease in loaner car days, and a boost in CSI scores. Dealers also gain access to a comprehensive real-time record of communication with their customers and a bird’s eye view of the service department that allows them to more efficiently manage their operations. 

“We are excited to team with Kayne Partners,” said Ujj Nath, myKaarma Chairman and CEO. “Today’s consumers’ view of service has been dramatically transformed. They have come to expect and demand a high quality user experience because of market leaders such as Nordstrom, Amazon and Uber. One bad service experience can result in a customer being lost as a future sales prospect. This partnership allows us to accelerate market growth and speed up technology development, so our dealer customers can keep up with the current level of service and technology consumers demand. myKaarma will continue to lead the industry with our technology platform and laser focus on the success of auto dealer service departments.”  

For more information, or to schedule a product demonstration, visit www.mykaarma.com,     

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About myKaarma: 
myKaarma is the communication and payments platform of choice for the nation’s top automotive manufacturers and groups alike, enabling a consistent high-quality service experience for their brand’s customers. myKaarma's platform is backed by its “crazy good” customer service and gives dealers the ability to offer their customers 21st Century technology through digital conversations and smart payment systems. myKaarma was named as an official communications and payments partner for Mercedes-Benz USA. 

About Kayne Partners 
Kayne Partners is the growth private equity group of Kayne Anderson Capital Advisors, L.P. Kayne Partners is a leading provider of capital and connections to rapidly growing companies in North America. Since its inception more than a decade ago, it has invested over $600 million in platform investments and add-on acquisitions. Kayne Partners seeks to partner with driven entrepreneurs as a non-control minority investor and provide transformative capital to these high growth companies.   

For more information, visit www.kaynepartners.com 

About Kayne Anderson Capital Advisors, L.P.: 
Kayne Anderson Capital Advisors, L.P., founded in 1984, is a leading alternative investment management firm focused on niche investing in upstream oil and gas companies, energy and infrastructure, specialized real estate, growth equity and both private credit and diversified liquid credit. Kayne Anderson manages $26 billion in assets and employs over 300 professionals in eight offices across the U.S.  

Kayne Anderson is headquartered in Los Angeles with offices in Houston, New York City, Chicago, Denver, Dallas, Atlanta and Boca Raton. 

For more information, please visit www.kaynecapital.com