Adopting Web Technology Today.... To Run Your Shop TommorrowPosted 09/10/2004
By Colby Horton
It may be an understatement to say the Internet has revolutionized the way we do business. Its evolution has been quick, its adoption has been enormous, and its impact on the automotive repair business continues to be felt.
Five years ago, AutoInc. set out to show its readers the impact the "dot-com revolution" had on the industry. Since then, the decline of solely dot-com businesses, triggered by a falling stock market, at times caused a virtual panic in the technology sector of the industry.
Out of the original 25 dot-com companies AutoInc. highlighted in 2000, more than half are defunct or have been purchased by larger companies. But in 2004, as automotive companies are willing to combine traditional business practices with technology-driven practices, the Internet is again playing a vital role in the way our industry conducts business.
At the Automotive Aftermarket e-Forum held in Chicago last month, Dick Morgan, president and CEO of the Aftermarket Auto Parts Alliance, spoke about data warehouse consolidation, saying: "It's not the big gobbling up the small, but the quick gobbling up the slow."
This quote can be connoted in different ways for various sectors of the industry, including the adoption of technology in independent repair facilities. The Internet has already demonstrated a tremendous impact on the industry, and if you're not already using it in your shop, it's time you started.
The sophisticated simplicity of the Internet attributes to its success within any industry. With just a series of mouse clicks, business transactions take place, plane tickets are purchased, and popular music is downloaded. Mention the words Amazon.com, eBay and iPod and most people know what you're talking about. Those companies and products revolutionized the way the Internet is being used by millions of consumers worldwide.
With well over 4 billion Web sites indexed in the Google search engine, it can be assumed that the Internet is here to stay and should become part of your shop's operations. At this year's e-Forum, Floyd Beadle, vice president of business development for DST Inc., said, "Change shouldn't be traumatic if it is done correctly."
Connecting Your Shop
At the Aftermarket e-Forum, David McCann, president and CEO of CarParts Technologies, said, "Nothing significant will happen over dial-up." When AutoInc. first published this feature in 2000, a broadband Internet connection in a repair facility was sparse. Now, according to AutoInc.'s latest "How's Your Business?" survey, 59 percent of mechanical repair shops and 67 percent of collision repair shops report using a high-speed Internet connection in their shop, which includes digital subscriber lines (DSL), cable and integrated services digital network (ISDN) lines. And according to the Telecommunications Industry Association's 2004 Telecommunications Market Review and Forecast, high-speed subscribers in the United States will expand at double-digit rates, growing from an estimated 28.5 million in 2004 to more than 47 million in 2007.
"In my opinion, an automotive repair shop without high-speed Internet is limiting its ability to acquire valuable information needed to run today's shop," said Chuck Hartogh, vice president of C&M Auto Service Inc. in Glenview and Vernon Hills, Ill. "There is a huge amount of information that can be acquired from the automobile manufacturers, shop equipment manufacturers, repair information providers and government Web sites. Dial-up access is too slow for today's needs. C&M Auto Service has had high-speed Internet access for several years and I would find it a lot harder to do business without it."
If you already have high-speed Internet access on one of your shop's computers, you're heading in the right direction. But to make your shop fully utilize the Internet and its capabilities, you must be willing to wire all the computers within your shop to the Internet. In a Bosch/Volkswagen study, it was estimated that a technician spends an average of 27 minutes per hour physically repairing a vehicle. The other 33 minutes are spent, in part, researching the problem - walking back and forth from the vehicle to an Internet-connected computer, most commonly found in the front office. Ideally, the technician should be able to access the information as close to the vehicle as possible.
"Allowing technicians access to the Internet can greatly increase their repair efficiency. Information fixes cars," said Hartogh.
The technology is present to allow you to connect several of your computers to an Internet connection without the restrictions of wires. And the adoption of this technology is easier, and more cost-effective, than you might think. The technology is called Wi-Fi, or wireless fidelity, which operates very similarly to the way a cordless telephone works. If you've purchased a computer in the last year or so, it is probably already equipped with a special device that interprets Wi-Fi signals. If your computer is not already equipped with such a device, one can be purchased for anywhere between $50 and $300. Your shop must also have a wireless router installed, which distributes the high-speed connection to other computers within your shop. Most DSL and cable providers include a wireless router with their service and will even install the device for you. The result is quick information streamed to every computer within your shop, increasing efficiency and productivity.
Electronic Customer Relationship Management (e-CRM)
Think back about five years ago. Do you operate the same way now as you did then? Probably not. And thinking ahead, you probably won't operate your shop the same way in another five years either. But no matter what year you're talking about, you always want solid, positive relationships with your customers.
Customer relationship management (CRM) companies have been around since the inception of business. To drive more customers into your business, customer relations have to be regarded as a high priority. The Internet is definitely bridging the communication gap between you and your customers and is beginning to evolve CRMs into e-CRMs. In a few years, that term may be used as frequently as e-business or e-commerce.
Here's what automotive repair facilities are facing today. Consumers are quickly migrating into a paperless society. More and more are receiving their household bills via the Internet. Others are paying their bills online, eliminating the need for checks. Many even receive their airline miles statements via e-mail. So why shouldn't mechanical repair facilities utilize the same thought-process when distributing service reminders?
"Research shows that 80 percent of all business is return business," said Manish Rai, director of product marketing for OnStation, an Internet-based CRM company. "As shops continue to invest in reaching and retaining their customers, they're realizing the cost savings and value of Web-based CRM solutions, which have no software to install and leverage the computers that a shop already has in place."
OnStation (www.onstation.com) helps automotive repair facilities with e-CRM solutions, which include electronic service reminders, CSI surveys and e-mail thank you notes. Their product operates directly from any Web browser, thus eliminating the need for software to be installed on your shop's computers.
Mitch Schneider, an automotive management instructor, contends in his course, "At the Speed of Thought: Solutions in a Web-Enabled World" that e-mail service reminders result in a more than 8 percent response rate. This is compared to a 1 percent to 2 percent response rate for direct mail reminders.
Companies such as OnStation and Cartrak Online (www.car trak.com) can help your shop construct a database for your customers' e-mail addresses. Some companies can even help you find your customers' e-mail addresses or extract them from your current shop management software system. Plus, collecting this information will save on mailing cost, save you valuable time, and eliminate wasted printed service reminders when a customer moves.
An added incentive for any e-CRM program is the ability to schedule appointments online directly from the e-mail service reminder. Electronic appointment scheduling is becoming widely adopted in the industry and proves to increase business in automotive repair facilities. Most e-CRM companies offer advice on how to best utilize electronic appointment scheduling in your shop.
Electronic Parts Ordering and Inventory Control
The electronic parts ordering sector of the industry continues to grow. Remember the old "green screens" you used to locate parts from a supplier 10 years ago? The archaic way of locating parts for your customers' vehicles has been replaced with a robust electronic catalog, or e-cat, complete with photos, descriptions and even installation instructions. As Bob Moore, president of Bob Moore & Partners, puts it, the industry has created "an e-cat on steroids." And because of this attribute, a diminished rate of error occurs when ordering parts online.
In a recent study conducted by MotorAge, most repair shops buy 24 percent of their parts and services online. That number is only expected to skyrocket in the next couple of years. According to Tim Engvall, chief financial officer for Genuine Parts Distributor (GPD), 75 percent of his customers will be ordering parts online from GPD by year's end.
Some online parts ordering companies are offering incentives for ordering parts online. And why not? The costs of these incentives still outweigh the paper and administrative costs associated with traditional ways of ordering parts. Diesel Injection Service's "Get Wired" campaign offers free Starbucks coffee to its customers for ordering parts online from the company, according to Steve Bailey, president of the company. In addition, if customers maintain a high percentage of online parts ordering for a specific amount of time, the company will purchase a new computer for that customer.
Why such incentives? The online parts ordering sector of the industry is highly competitive. Search for "online parts ordering" in Google and you'll receive overwhelming results.
The Internet definitely provides an extensive electronic parts catalog solution. And as a younger generation of technicians, parts and counter people, and shop owners begin to impact the industry, it's only a matter of time before strictly paper catalogs give way to the Internet's capabilities. And e-cats provide more comprehensive, timely and accurate information for shops attempting to order late model parts.
For example, Mitchell 1's OnDemand5 Manager is now integrated with Internet AutoParts Inc. (IAP), allowing repair shops to order parts from their IAP supplier of choice using the IAP Web-based parts ordering and communications platform. Mitchell 1 is the first shop-management system provider to join forces with IAP to offer its customers Internet-based parts ordering. The relationship allows Mitchell 1's OnDemand Manager to allow users the ability to expedite parts ordering transactions through a large base of participating distributors.
The Internet is also revolutionizing the way excess parts inventory can be controlled in your shop. eBay Motors (www.motors.ebay.com) is giving shops a venue to get rid of extra parts inventory in their shop. Initially created for automotive enthusiasts, eBay Motors is evolving into a site where automotive repair facilities can find hard-to-find parts, as well as sell excess parts in their inventory. Over 600,000 parts are listed at any one time. According to Paul Nadjarian, senior manager of parts and accessories for eBay Motors, a part or accessory sells on the site every two seconds. Your extra part is someone else's necessity. Consider setting up an eBay account for your shop to manage your excess inventory.
The Internet has always been known for its vast amount of information. Although the automotive repair industry has been somewhat reluctant in adopting a full-fledged Web initiative in repair shops, it has always been willing to use the information provided on the Internet.
iATN (www.iatn.net) stands at the forefront of networking and exchange of technical knowledge. Operating more than 20 discussion forums and an abundance of technical resources, iATN is the place where seasoned technicians find answers to problems occurring within the shop. The network consists of over 49,000 professional automotive technicians from more than 140 countries.
"We probably log on to the iATN as much as 20 times a day," said Hartogh. "It has a huge amount of information in its database that has helped us diagnose a countless number of 'weird' automotive repair problems."
The Internet is also the key tool to access the vehicle manufacturers' technical information needed to repair today's complex vehicles. As of last year, all the original equipment manufacturers had launched their service information Web sites, per the 2002 agreement between the Automotive Service Association (ASA) and vehicle makers. Bill Haas, ASA's vice president of service repair markets, says he has visited every OEM Web site and says they're all easily accessible. Independent repairers now have the information needed to perform diagnosis and repairs that they did not have only 18 months ago.
Even the electronic diagnostic and repair information companies are jumping on the Internet bandwagon. Both Mitchell International and Alldata are offering Web-based versions of their diagnostic and estimating products to the industry.
"For any Web site to be successful, there is one key ingredient - activity to the site," said Dave Henderson, president of See Progress Inc. (www.autowatch.com). "You can spend tens of thousands of dollars on the most elaborate, eye-catching Web site design, but if you don't have something to draw people to your site, it will not be a success. Your site should become an extension of your shop, offering your customers access 24 hours a day."
Your shop's Web site should become the forefront of your marketing effort. According to AutoInc.'s 2003 "How's Your Business?" survey, 49 percent of mechanical shops have a Web site while 54 percent of collision facilities operate a Web site.
More and more motorists are turning to the Internet to find a shop in their area. Several Web development companies are now catering specifically to the automotive repair industry. Five years ago, that wasn't the case. Now, Web developers understand the need for a well-designed site in the automotive repair industry. Many of these companies take it one step further and help you market your shop to the motoring public.
"A common fallacy is that if you 'build it, they will come.' For effective Web sites with a lot of traffic, you must provide something that your customers and prospects want, beyond the basic contact information," said Henderson.
In the End...
You can only do what's best for your business. But the Internet is no longer new. Its credibility is growing and its security helps build the kind of business relationships once seen by person-to-person contact. The Web produces measurable benefits and shop owners are truly starting to embrace the technology.
If you think you know the Internet, you haven't seen anything yet. We don't know the full capabilities of the World Wide Web. But rest assured, you don't want to be left behind. Adopt the technology today, so you can efficiently operate your shop tomorrow.
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