Today's environment:

Sometimes when I look at an auto dealer website I sit back, scratch my head, and wonder if they have ever scheduled an appointment for dealer service on their website? Not to mention all the bots that pop, and all the flashing offers! It is the farthest from the basic tenets of what makes anything usable today on the internet: convenience and transparency.

For most auto dealer appointment schedulers, by design the dealer wants to collect as much information as they can get, while the customer wants to give as little information as possible but still make an appointment.

How do you bridge this gap?:

It is a very important gap because if you make it difficult, the customer goes elsewhere. Or, maybe they don't go elsewhere, but they pick up the phone and call your call center. Then you scratch your head and wonder why you are only getting between 10 and 15% of your appointments online, even in today's COVID-19 environment.

What should happen:

Ideally what should happen is the customer identifies themselves simply: by either typing their phone number or their email address. You ask them which car they are bringing in (if they have more than one) and present them with a bunch of time slots to make an appointment.

Don't ask them to pick a service advisor!:

You know how many appointments you can make! If you have only five service advisors that day and you can make six appointments per service advisor just put 30 slots up and when those slots are full, move the customer to the next day.

Put up a comment box that lets them just type why they are coming in and if they have any special requests like they want to see a specific service advisor.

Text them back a confirmation stating that you got their request and have their slot reserved. Now read their comments and see if you need to talk to them to confirm that the time allocated will be sufficient and if there is more repair needed. When you do contact them, if you realize that they need a lot more, then offer them a loaner or an Uber voucher.

Just make it easy and make it convenient.

Don't overcomplicate it!:

Their job is to come to your store and your job is to make it easy.

How my ISP does it:

I needed to upgrade my internet from 100Mbps to 500 Mbps. I chatted with my ISP online, and they confirmed the upgrade and said the new charge would hit my credit card once the tech had come in to change and test the new equipment.

The agent asked me to make an appointment for the tech to visit me.

I received a text asking, “do you want to make an appointment?”

I said, “Yes.” They offered me a bunch of slots, I picked one and they sent me a confirmation saying the slot was “reserved” and to send the word “Change” if I needed to change the appointment.

On the day of the appointment, my schedule had changed, and I could not see the technician that day. I sent the word “Change,” they offered me revised slots, I picked another day and the technician came and diagnosed that I needed some further equipment. They asked me to make another appointment via text, and he came that day and fixed my internet. And oh, by the way, on the day of the appointment when he was on the way to my home, I got a text and could track him coming to my house a-la Uber!

Imagine if this is how it worked with online schedulers for auto dealers.

Moral of the story: Take care of the customer!

I have been studying Amazon and unknown to me, they seem to follow the same principle that I promote to dealers. I call it the Circle of Convenience and Trust.   

Amazon obsesses about convenience. I am sure some of you suffer from the "brown box syndrome." A brown box arrives on your doorstep every day. Amazon makes it so easy that I sometimes order something in between two meetings -- in just 30 seconds. Amazon’s ease of use is working for them. Check out these numbers!

But all of this would mean nothing if Amazon didn't offer such a high level of transparency and did not push that in their marketing. They inform you when the package has shipped, you can track it to your house and, when it is within your vicinity, they even show you the delivery van a-la Uber!

Today's consumers are so used to this type of convenience they now expect it from every retailer including your dealership. The most forward-thinking dealers are responding with services such as pick-up and delivery for vehicle service. I have seen this done many times and it dramatically increases CSI and service department profitability. Today's customers prefer to do business with you from the convenience of their homes.

Every retailer is getting in on this game. Panera Bread recently rolled out its delivery program across the United States, and now delivery revenue is 30% of all digital sales. And that's for sandwiches and coffee! Domino’s Pizza even allows consumers to order their favorite pizza without doing anything! Just open the app and, via a countdown, you can place the same order, have it delivered to the same address and pay for it by the same credit card! Talk about 0-Click ordering!!

While getting a pizza, sandwich or burrito delivered may save you 10-30 minutes over going to the restaurant to pick it up, when it comes to vehicle service, pickup and delivery can save your customers considerably more time.

How long does it typically take your customers to drive to the dealership, wait in the service lane to get checked in, talk to a service advisor, get a loaner vehicle, and then drive back to their office or home? 1 hour? 1.5 hours? Then you have to add in the time it takes to return to the dealership, drop off the loaner, finish the paperwork, get in their vehicle and drive to their home or back to the office -- Another hour? Maybe 1.5 hours? And that's if there are no surprises, bad traffic, advisor at lunch, etc., etc.

If it is important to your customers to save 20 minutes in their day by getting food delivered, how can your dealership expect them to give up 2-3 hours to drop off and pick up their vehicles at your dealership? My best bet is that, in the case of regular maintenance, they will avoid your dealership altogether and take their car into the closest Jiffy Lube!

Think it’s too expensive to provide a pickup and delivery option? In some dealership’s pilot programs, I have seen a 57% lift in RO dollars per vehicle that is picked up, serviced, and then delivered back to the customer.

Pickup and delivery isn’t just for a dealership’s “elite” customer base. This service should be for all your customers. They all shop on Amazon and eat at Panera Bread and Dominos and so EXPECT this type of convenience. Customer convenience is a competitive advantage, whether you are selling burritos or servicing /selling automobiles.

Don’t let the cross-town competition steal your customers because they provide a more convenient service option. The longer your dealership waits to accommodate your customers, the harder it will be to catch up and get those customers back. 

Many businesses focus on improving customer convenience as a means to expand their reach and volume of commerce. It’s not just Internet companies such as Amazon, but some of the most substantial brick and mortar chains, including Wal-Mart, Costco, Best Buy, Office Depot and several major grocery store chains. Adding options that increase customer convenience & transparency produces substantial increases in revenue due to broader market size and radius, along with increased market share for local stores. Not to mention the fact that your recommendations are approved due to the higher level of trust from increased transparency.

A great case in point is Costco, the sixth most valuable retail brand in the WORLD. In 2018 it increased e-Commerce business by 32.2%; an additional $5.8 BILLION in revenue. Similarly, the electronics chain Best Buy (which many wrote off as doomed to fail because of Amazon), changed its strategy and embraced customer convenience. As a result, it saw a revenue increase of $1.21 BILLION in the 2nd quarter of 2018. It certainly sounds like customer convenience is working, right?

A 2018 Quest for Convenience Report by Nielsen studied the six factors driving consumers’ quest for convenience. It found that today’s consumers want convenience at every stage of shopping and brand engagement with products and services. According to the study, a primary factor which affects consumer choice is how you solve consumer needs through convenience. Do you make it easy, useful and straightforward? And in doing so do you help the consumer make better use of their time, or give them time back?

Another critical point found is that businesses should get ahead of the curve by thinking convenience in everything they do from home delivery to loyalty data to machine learning.

Consumers are busier than ever, and convenience is now the leading factor that affects who they chose to do business with – you or your competitor across town. Today, even local grocery stores offer online ordering where a customer can just drive up, and an employee loads their car up with groceries, or if they prefer, deliver it to their home. This is slowly transforming into the normal versus the “new thing.”

It’s time to think differently about how to make the customer experience more convenient for your service customers. Offering Pickup and Delivery is a natural extension that customers are familiar with and already appreciate. Who wouldn’t want to have a dealership pick up their vehicle from their home or office, service it and return it without them ever having to leave the premises?

The auto service, Fixed Operations, side of your business is the money maker. Adding online convenience-based service options for your customers will grow revenue, add more local customers, expand your PMA, drive new customer acquisition and increase your bottom line!

Not sure where to start? A good place is with online scheduling and Pickup and Delivery, as I mentioned earlier. One other thing that is easy to add is technology that ensures customers can communicate with you and you with them via their preferred method, be it text, email or phone.

The name of the game in this modern world is convenience and transparency. Failure to keep up, adapt, and provide what your customers want will merely mean you lose business to competitors that do.

While in this blog, the focus was on convenience, in my future blogs I will talk about transparency and the feedback loop.

Does your service department software remove friction for your customers but add friction for your staff? Perhaps that is why we see so many software companies come and go in this industry.

With today’s transformation from a dealership-centric focus to one that is more customer-centric, technology companies are rapidly developing solutions that create better customer experiences. This is indeed necessary for a society that is hyper-focused on convenience and even more focused on saving time.

Customer experience software solutions are definitely something your dealership should have, and if you don’t, you should be looking into them. But merely investing in a software solution that makes the experience better for the customer isn't enough. It is essential to understand that the "customer experience" part of the solution doesn't happen just because the vendor tells you that the software makes it so.

Dealership employees are a vital link in the chain that powers that software, creating the desired experience. As they say, a chain is only as strong as it's the weakest link. If the software your dealership adopts is designed to improve the customer experience but just ends up making things difficult for your staff, creating internal friction, you won’t see the desired outcome, and the solution will ultimately fail.

Service staff just won’t use a complicated system set up in a completely different way to their service workflow, creating friction. Who wants a software where you have to “do work to do work?”. Some systems are so hard to use that employees end up using a clipboard or a post-it to record their notes and then try and catch up later. An average advisor has as many as 15-20 different responsibilities, and so it is not surprising that these tools just don’t’ get used.

In addition to improving the customer experience, any service department software needs to make it easier for your staff to record their work, create reminders, etc. – removing friction on their end just as it does on the customer’s end. Only then will the links in the chain be strong and the technology solution operates smoothly. The ultimate benefits should not just include improving customer experience and retention, but also decreasing turnover, workload capacities, and throughput.

I have personally seen that the way most successful dealers run a frictionless service department is by ensuring that their service advisors do NOT have to focus on the inane and mundane, but instead on what is important to their customers.

By placing the customer front and center, this automatically brings about the desired results and increases acceptance of recommended work, because the customers get the attention they need and want. They feel that the service advisors are being transparent, and the service advisors can build the trust they need to achieve service recommendation success.

Take an inside out view of your technology and analyze all of your software from both aspects – customer and employee friction. If it doesn’t reduce both in this simple analysis, then it is likely to fail entirely at improving your service operation.

service@home™ extends service department access to meet the demands of today’s busy customers

LONG BEACH, Calif.,-- January 24, 2019 -- -- myKaarma, software that helps dealerships communicate better with their customers at every stage of the service process, right from check-in through to payment, today announced the launch of service@home™, which helps auto dealers deliver exceptional customer service to anyone unable to visit the dealership for their service needs. myKaarma’s service@home™ extends its products capabilities beyond a dealer’s service department doors.

According to myKaarma CEO Ujj Nath, dealerships need to adapt to consumer expectations which companies including Amazon, Uber, Google, and Costco have trained today’s customers to expect. “Using our service@home™ technology provides auto dealer customers with the simplicity of getting walkarounds with pickup and delivery features. service@home™ offers customers the option to have the service department pick up their vehicle and bring it back for service without disrupting their daily schedule. It’s a simple transparent process for the customer and the service department,” Nath stated.

The process is as follows: The customer makes an appointment. A driver is then dispatched to pick up the customer’s vehicle at the time and location they requested. The service@home™ platform live tracks the driver's route which can easily be viewed by both the dealership and the customer. Once the driver is at the pickup place, they conduct a video walkaround to confirm the condition of the vehicle.

The driver then returns the vehicle to the dealership (routing is live tracked again, reassuring the customer with transparency) where the RO is opened.

The service advisor is in constant contact with the customer through myKaarma’s communication features (text, voice, email) and can send pictures and technician videos about additional recommended vehicle repairs.

Customers receive a notification when their vehicle is completed, and an invoice is sent. Customers can pay online, or when the vehicle is delivered back to them.

“Today the vehicle drop off and pick up process at dealerships is very archaic. Customers want convenience and transparency based on their busy schedules and how they want to do business in the digital age. service@home™ from myKaarma solves these pain points while increasing customer satisfaction and revenues for your dealership,” Nath stated.

For more information, or to schedule a product demonstration, stop by booth # 6459W at the 2019 NADA Show in San Francisco, CA, Jan 25-27, 2019, or visit www.mykaarma.com .

About myKaarma:

myKaarma is a cloud-based software company that focuses on enhancing the retail experience of service customers and increasing franchised dealerships revenue. The myKaarma platform gives dealerships the ability to offer 21st-century technology for digital conversations (Text, Email, Voice, video, photos) and payments (Mobile, Point-of-Sale) with auto-reconciliation. The full platform, service@home, includes pickup and delivery, video walkarounds, driver tracking along with the communications and payments features all seamlessly integrated and synced with your DMS

myKaarma Media Contact:

Kent Mihlbauer

562-349-1356

Kent.Mihlbauer@myKaarma.com

Tesla CEO Elon Musk recently tweeted that he wanted to take Tesla private, which has garnered a lot of attention. Hey, I realize that Tesla as a company can be a polarizing issue in our automotive industry. But this is something you may want to pay attention to.

Here’s why:

Public company CEOs are notoriously beholden to quarterly projections. If you’re not familiar with the stock market, every quarter, the CEO and CFO of publicly-traded companies have a “earnings” call with an analyst to share financial performance, projections etc., and additionally they provide “guidance” for the upcoming quarter.

Truth be told, secretly most CEOs of public companies hate this practice because to compete they are often focused on research and development with an eye on long term viability, rather than the next quarter profit. Similar to meetings dealers have with their District Operations Managers (DOMs), except that these dealer calls happen every month with questions such as: “How many units will you sell next month (new and CPO?); and “How much revenue is expected in fixed ops?” etc.

The answers dealers give to their DOMs are very similar to the answers tech companies give to Wall Street… they are guesses. No dealership knows without a doubt exactly how many vehicles they will sell next month. They simply set goals by forecasting based on sales achieved at the same time the previous year, combined with inventory quantity, dealership traffic, promotions and staff talent. But, in the end, it’s all just a guess. Just like the answers these large tech companies are forced to give.

Take a look at Amazon. Jeff Bezos lost money daily. When investors asked “why?” he responded that if Amazon stopped R&D expenses they would be profitable the next day but it’s future would be more profitable by continuing to invest in R&D until they had a rock-solid base, then they could make money. And now they have topped almost a trillion-dollar valuation. In fact, according to TechCrunch, Amazon now accounts for an astounding 49% of e-commerce in the United States.

Tesla is following a very similar path. It is also mainly a R&D company, constantly innovating and coming up with new, crazy but viable ideas. It is also losing money on a daily basis. But it continues on the R&D path.

When market analysts and Wall Street come knocking on Elon Musk’s door, he’s barraged with the same questions thrown at Amazon. Perhaps his Twitter announcement about going private is his way of voicing frustration about having to answer these questions with guesses. By taking Tesla private (he has since backed away from this position as wall street also controls his capital raises), he can perhaps avoid answering these questions and simply continue to innovate.

Only time will tell. Business plans and net worth for R&D-based companies are always predictions and guesses, not precise. When you miss estimates, Wall Street will kill you, but it also has a short memory and, should Tesla succeed, it will be forgiven.

So, getting back to why dealers should care. Well, here’s the deal: As much as you may dislike the distribution model Tesla is trying to achieve, if Tesla and Elon succeed, dealers like you will have to live with it.

I believe Tesla only need achieve a 2% market share to make it a viable and authentic automotive manufacturer. As of July 2018, it has already achieved a 1.44% market share, exceeding sales of the BMW 2,3,4 and 5 series; Mercedes C, CLA, CLS and E-Class; Audi A3-A7; Lexus ES, GS, IS and RC; Cadillac ATS, CT6, CTS and XTS; Infiniti Q50 and Q60; Acura RLX and TLX; Volvo 60 and 90 series; and Jaguar XE and XF!

Love them or hate them, it certainly appears that Tesla is successfully gaining ground – and quickly.

While you may not be a fan of Tesla, you certainly should be planning for the day Tesla becomes a true automotive manufacturer (in terms of market share). I would advise you to start now and invest in making your dealership a convenient & transparent place to do business and invest in the long term!

Back in the early 1990s, the Internet was in its infancy. As a new phenomenon, not every business was sold on its benefits, or even why they should use it. This posed a problem for Cisco, a company whose main product at the time was routers. Cisco needed to prove that, not only would the Internet save companies money, but also Cisco products were the best choice to help them do so.

In the end Cisco created automation and technology which allowed it to manage the travel expenses of 22,000 employees with only 4 auditors, compared to the average 40 auditors at equivalent sized companies. Cisco saved $825 million with this technology. The following year savings grew even further to $1.35 billion and it achieved a market capitalization of $550 billion to become the world’s most valuable company.

The system, in part, relied upon honest employees in exchange for fast reimbursements (mostly next day). This gave employees an incentive to be honest with their expenses while also providing a cost advantage to Cisco by having just a few employees handle expenses for everyone in the organization.

Cisco’s routers became an industry standard and it has been shaping the future of the Internet for more than 30 years. In the end, Cisco was a catalyst for showing businesses the efficiency and cost advantage the Internet could offer -- and we all know the rest of the story as the Internet exploded and is now as integral to our lives as sliced bread.

What has this done for dealerships? Well, I am sure you all use the Internet for a myriad of operations – accessing your CRM, DMS, etc. You probably also have Wi-Fi in your customer waiting areas. And today Wi-Fi is even used to operate the coffee machine.

Wi-Fi is like water. You need plenty of it. Car shoppers these days demand speed and efficiency and that means using the latest technology in your dealership; including tablets and smartphones in the service drive and technician bays. A really good Wi-Fi connection is vital – throughout the dealership. But here’s the problem: dead zones are everywhere in the typical dealership. Because of this, vendors tend to get the brunt of the blame as dealers tell them their products don’t work – when really all that is needed is more bandwidth and a better network.

With the advent of Google Wi-Fi and new mesh networks, it is now a simple process to create a single network, or SSID, throughout the dealership. These type of networks reach all corners of the dealership. They operate in a similar fashion to cell towers; the software switches you to the next access point with the same SSID when the signal weakens. That translates into NO dead spots, anywhere. By the way, the access points are so cheap, that at $75 an access point, if you do find a dead spot, buy a new one and plug it in. When you add it to your mesh network the point “wakes up” flashes a blue light a few times and starts sharing the load. Simple!

The result: a well-connected network that adds efficiency and productivity to all your connected software, giving you happy customers AND employees.

The other advantage is that Google automatically patches the access points whenever there is any known security challenge, so you can rest assured that your network is always updated with the latest software and is safe and secure.

By adopting this inexpensive technology, you can provide the experience today’s customers demand in the service drive. All the providers in this space have very aesthetically pleasing access points (Eero, Samsung, Linksys, and NETGEAR).

Tablets and smartphones are now the order of the day. They speed up and simplify interactions with customers and make inter-dealership communications between service advisors, technicians and the parts department more efficient. Technicians and service advisors can quickly move onto the next customer’s vehicle, increasing shop capacity and service revenue. And -- just like Cisco proved almost 30 years ago when they kick started widespread use of the Internet as a business tool -- this provides a definite cost advantage.

I can’t think of any dealer that wouldn’t want to increase net profit every month while also keeping their customers happy. Can you?

When automobiles were first introduced into society, people didn’t know what to think. For the most part, early automobiles were reserved for the wealthy, while everyone else continued their transportation needs with the use of horse and carriage.

However, people were very curious about this strange new phenomenon of transportation. So curious, in fact, that cars were exhibited not at the car shows we know of today, but rather at circuses alongside elephants, the wolf boy and other curiosities of delight, according to the book, “The Evolution from Horse to Automobile.”

Change can certainly be hard to confront. The mass transition from horse-powered transportation to automobiles took about 50 years, according to the president and managing director of General Motors Canada. In a recent article he shared that horses, while loved by both consumers and industry, caused significant environmental and economic challenges. Their use grew to such an extent that they produced a huge volume of manure, creating flies and traffic congestion on unpaved roads. They also consumed massive quantities of natural resources; five acres each of hay and grain annually.

It was calculated that, if left untouched, horse droppings on the streets in North America alone would rise to the level of a third-story building in Manhattan; that’s about thirty feet! This perfectly illustrates the predicament, and catalyst, that led to the rush development of more gas-powered vehicles. This has continued today into electric, self-driving and autonomous vehicles. Consider the mass expulsion of emissions as the 1920 equivalent of horse-droppings. The only difference being that emissions aren’t right in front of you drawing flies. Emissions do, however, have a similar (or worse) impact on the environment and health in the form of smog.

Change is difficult. I get that. That’s why it took 50 years to migrate from horses to automobiles.

But, in these modern times, technologies develop much faster than in the past. I’d bet you anything that the majority of you have a computer that’s already outdated. Even if you bought it 6 months ago!

The point I am making here is that change is inevitable. It is far better to embrace it then to resist it. In the automotive industry, we do tend to be a bit behind the rest of retail as far as jumping on the technology bandwagon. While there will always be a population of people working to slow progress by making a case for how any new technology will not work, those dealers that embrace and use new technologies see huge benefits and tend to stay ahead of their competition.

One very simple example is texting. Just about everyone has a smartphone these days and that adoption started only eleven years ago with the iPhone launch. Voicemail is now considered very inefficient as it is so much easier to communicate with customers via methods they use frequently, such as text messages. Some dealers have seen dollars per RO increase substantially simply due to better interaction with their customers through the ability to text. It makes economic sense to simply adjust to how consumers prefer to communicate in today’s smartphone world. Remember what it was like when most people didn’t even own a cell phone, let alone a smartphone?

New and developing technologies and the evolution to autonomous vehicles will most certainly benefit society. But there is always someone that argues against any new technology, perhaps believing that SkyNet from the movie “The Terminator” is soon to follow.

 Auto manufacturers are shifting their focuses to low-emissions, electric and autonomous vehicles. Worldwide OEM investment in electric vehicles is expected to be around $90 billion through 2030 and another $61 billion will be spent through 2025, continuing the development of autonomous vehicles. Technology companies, such as Google’s Waymo, etc., are moving forward at a more rapid pace. And, regulators are throwing environmental rules, guidelines and – more telling – strict deadlines at dealers and OEMs.

The transportation industry as we know it is going through a huge evolution similar to that difficult migration from horses to automobiles. Except this time, it won’t take as long, or at least I don’t think it will. But perhaps I am wrong – what do you think and what challenges will this present?

Have any of you had success with QR Codes? By some reports they are making a comeback. But, on the other side of the coin, on an episode of Shark Tank late last year, renowned venture investor Chris Sacca commented that QR codes are “the herpes of mobile technology.”

Yes, pretty harsh, but his words, not mine!

Technology is sometimes a fickle thing. In 1994, a company named Denso Wave created QR codes. Marketers were excited as this was an interactive and easy way to pass information onto the consumer. An interesting aside is that, according to an article on Gizmodo, Denso Wave was owned by Toyota and this technology was initially used to “track vehicles as they were assembled and to scan components at high speed.”

Over the years auto dealers have wavered on the use of QR codes as most consumers disliked the difficult process of scanning them. According to ComScore, by December 2011, seventeen years after their introduction, only 20 percent of Americans, 16 percent of Canadians, and 12 percent of Spanish and UK smartphone owners used QR codes at all, as they were far from user friendly. Cell phones required a QR code reader application and those were also hard to use. To compound the inconvenience, the smartphone needed a data signal. And, it wasn’t that long ago that many cell phone plans limited data usage and consumers were careful with their data. As a result, the QR code promptly lost its popularity with consumers and, if consumers weren’t interested, marketers certainly were not!

But now, it appears, QR codes are making a comeback. The question is “why?”

As smartphone technology and software has evolved, cell phone manufacturers are again looking at the benefits of QR codes. Marketers always need simple and effective ways to quickly and easily convey a lot of information to consumers. As the smartphone is still the best venue for that, phone manufacturers responded.

Two operating systems; Apple’s iOS and Android, account for 99.9% of all cell phones sold last year – a whopping 1.5 billion. As of Apple’s current iOS 11, all iPhones have the capability to scan QR codes simply by pointing the phone’s camera – no app required. And, from the iPhone 5s on up, all iPhones can run iOS 11 and, well, Apple pretty much forces an upgrade.

Each Android phone running Marshmallow and above (which is most of them) has the same ability to simply scan QR codes. So, as of right now, pretty much every phone sold has the native ability to scan QR codes built right into it, making QR codes less of a hassle and easier for consumers to use. Add in the fact that most cell phone providers now offer unlimited data, and that marketers, including dealers and OEMs, still need a way to convey large sums of information in relatively little space, and there is certainly something here to support the possibility that QR codes could make a comeback.

But, as with most technology, all is not golden. Chris Sacca has made it very clear that he sees no future in QR Codes. Perhaps he was referring to them being visually ugly and confusing for most users. He went on to say that: “the user experience sucks … it should be as simple as: buy some stuff, get a ride … period. Please, light the QR codes on fire.” And this is the guy that invested in seed and early-stage technology companies such as Twitter, Uber, Instagram, Twilio, and Kickstarter, investments that resulted in his placement as No. 2 on Forbes' Midas List: Top Tech Investors for 2017, so he seems to be a skilled predictor of trends technology-wise.

This certainly presents an interesting situation. Apple and Android predict a comeback for QR codes as a low-cost way for merchants to interact with the consumer’s device. However, a key thought leader thinks otherwise.

I would be interested in hearing your thoughts on this. Will QR codes make a comeback as mobile providers have simplified the process? Are they now, in fact, an efficient way to provide customers with rich information about a vehicle – new or used – without having to stock hundreds of boxes of brochures? Or, is Sacca right, and consumers have lost interest due to past bad experiences and should the technology be set on fire? Or, lastly, is there perhaps some middle ground where QR code technology needs further improvement before it is truly a useful tool for both dealers and consumers?

The automotive industry is changing with self-driving cars, companies such as Uber entering the field and the decline of oil-dependent vehicles. 

To that point, I am sure many of you are familiar with the shocking stories and downfalls of three highly successful companies: Blockbuster, Kodak and Xerox.

So, what lessons can be learned from these failures that can be applied to dealerships? (my readers have written to me to say that my posts are too long and sometimes the summary may help to see if they want to read on, and hence the bottom line first.)

First, in the case of Blockbuster, you must constantly study and re-evaluate the market and your competition. I keep telling my employees that I wake up worrying more about two guys in a garage with a computer putting us out of business, rather than our current set of competitors!

The moral: Disrupt yourself!

Second, Kodak. Our industry is currently barraged with messages of disruption as new companies and technologies enter the market. Don't let others disrupt your business, do it to yourself. 

The moral: Cannibalize yourself.

And, lastly Xerox. While the company did invent the future, it failed to realize its full potential and produced technology that was ill suited for the needs of the audience it was serving. Their mouse had three buttons, broke every two weeks, the windowing system was far from simple and needed three clicks at times to do an action. Jobs went on to build a mouse for under 15 bucks, it did not break down in two years, his windowing system was simple and easy to use -- with just one click for most actions. 

The moral: It is all about reliability and customer convenience.

Let’s briefly examine – and expand upon – these three stories:

 1.  Blockbuster – In the year 2000, Reed Hastings, the founder of a new company called Netflix, proposed a partnership to Blockbuster CEO John Antioco and his team. Netflix’s idea was to run Blockbuster’s brand online and Blockbuster would promote Netflix in its stores. Hastings was pretty much laughed out of the room. Well, Blockbuster went bankrupt in 2010 and Netflix is now a $28 billion-dollar company, approximately ten times what Blockbuster was worth. Antico was not a bad CEO, yet for all his business expertise he failed to see the opportunity and what could happen in the future.

When Hastings made his original offer, Blockbuster was at the top of the video rental industry. It had literally thousands of retail locations, millions of customers, a massive marketing budget and dominated the competition. So, it would have been a natural reaction for Blockbuster to think that handing over the brand was a bad idea.

Here’s the catch, and something to learn from: Blockbuster’s model had a weakness that wasn’t immediately clear. It earned an enormous amount of money through charging late fees, and this became an important part of Blockbuster’s revenue model. The company’s weakness was that its profits were rather dependent on extracting penalties from its customers.

On the other side of the coin, Netflix had certain advantages. It decided not to have any retail locations and so lowered costs, enabling it to offer customers much better variety. Instead of charging to rent videos, it offered subscriptions, negating late fees. Customers could watch a video for as long as they desired or return it and get a new one. And they loved it and left Blockbuster in the dust.

2.   Kodak – Kodak didn’t ignore digital photography. It created a best-selling line of digital cameras as well as high-quality ways to print them. The problem was that Kodak made most of its money from developing film. This wasn’t an issue of stupidity, or ignoring technology, but rather a financial one. And, they failed to see how their product could be replaced.

3.   Xerox -- One of the most incredible stories in the history of technology is the story of the Xerox mouse and personal computer. In 1979, a very young Steve Jobs made a deal with Xerox. Apple was at that time one of hottest tech firms in the USA. Jobs proposed a deal: he would allow Xerox to buy a hundred thousand shares of his company for a million dollars in exchange for access into Xerox’s Palo Alto Research Center (PARC). An engineer at PARC conducted a demonstration for Jobs, moving the cursor across the screen with the aid of an early design computer mouse.

Job’s was very excited about the technology and how it could make computers much more user friendly. He could not believe that Xerox had no real plans to do much with the technology as he saw that it was revolutionary. One of the main problems was that the Xerox mouse cost three hundred dollars to build and was broken within a couple of weeks. Jobs directed his design team to build a mouse for less than fifteen bucks that could last for a couple of years.

Xerox did continue in the personal computer field and developed the Alto, which went on sale in 1981. However, it was slow and underpowered. So, shortly after that, Xerox withdrew from the personal computer market. Meanwhile, Jobs, who was working on the next generation of personal computers, developed the technology for menus, opening, closing and expanding “windows” to easily move from one task to another, and a better mouse. And the rest is history.

Xerox management failed to correctly provide what the market needed. They should have focused on ease of use and reliability. That is how Jobs and his team at Apple won the market.

From these stories, the takeaways and real lessons aren’t that these businesses were once leaders in their industries and failed. Rather, it is how to constantly innovate, even though in the short term it will cannibalize your business; but in the long term, you will enjoy the spoils when your competitors are out of business.

While we see these stories repeated often, for some unknown reason, we as humans tend to think “this is not going to happen me or my industry.”